Political and media affairs researcher
The Iraqi economy has received a new shock with a huge spike in the dollar exchange rate in local markets, with the parallel exchange rate recording 1,540 dinars to the dollar, while the official exchange rate is only 1,320 dinars.
The currency has risen after the US Treasury Department levied penalties on 14 institutions, as reported by the Wall Street Journal a few weeks ago. These restrictions came months after similar sanctions were placed on four other Iraqi banks for money laundering.
The American newspaper report added that the ban on these banks comes within the framework of a comprehensive campaign against the transfer of US currency to Iran, as the sanctions included the banks of Al-Mashshar, Al-Qartas, Al-Tif, Elaf, and Erbil, in addition to the International Islamic Bank, the Trans-Iraq Bank, Mosul, Al-Rajeh, Sumer, Al-Thiqah, and Or, as well as Al-Alam and Zain Iraq banks.
The US sanctions cause a new wave of concern among Iraqis, especially since all government measures implemented during Prime Minister Muhammad Shia al-Sudani’s administration failed to bring the parallel exchange rate closer to the official rate following the crises and setbacks to which the American economy has been subjected for several years.
It should be noted that the global economy tends to diversify with a number of foreign currencies, including the new Brexit currency, the euro, the Chinese yuan, the Russian ruble, and the Brexit currency, which is expected to be introduced in financial markets within the next year, according to global economic reports, as the major countries are members of this economic forum. It intends to provide the currency after completing the legal formalities, which are expected to be finished soon. This was proved during a summit conducted several weeks ago in South Africa, when the number of members climbed to more than 24 with potential future economies, including China, Russia, India, South Africa, Iran, and others.
A number of economic analysts stated that the Iraqi government may take efforts to avoid banks slipping into the trap of the US Treasury, particularly with regard to the sanctions imposed on select banks from time to time.
It should be emphasized that “Iraq possesses reserves of more than 100 billion dollars in the United States of America, and this matter necessitates the government to strengthen the country’s sovereignty over private banks, which number more than 70 private banks.”
“The government’s actions could make it difficult for America to impose new sanctions, after it previously imposed sanctions on 14 banks, causing a scarcity of dollar supply in the local market, which still deals with financial liquidity in antiquated ways.”
It is critical for the Central Bank to implement enforceable requirements for banking development in order to avoid any imposition of American guardianship based on money laundering allegations.