Reuters disclosed on Thursday in a story about a US Treasury Department official that the latter threatened new Iraqi banks if they did not follow orders during the recent visit to Iraq.
According to the report, which was translated by the “Al-Ma’louma” agency, “the Central Bank of Iraq must address the ongoing risks resulting from the misuse of dollars in Iraqi commercial banks to avoid new punitive measures targeting the country’s financial sector,” adding, “There are still other Iraqi banks operating with risks that must be addressed.” According to his assertion.
“With the United States having reserves of more than $100 billion in revenues,” the paper noted, “Iraq remains largely under Washington’s control over the funds and ensuring that oil revenues and funds are not exposed to US sanctions.”
“The government has taken strict measures to ensure that Iraqi interests are protected while improving the banking sector and remittance market,” said Farhad Alaeddin, advisor to the Iraqi Prime Minister for Foreign Affairs, adding, “The Iraqi government is serious about continuing the path of reform and fighting corruption.”
“I chose to focus on banks that still have access to banks where I see ongoing risks,” the US official explained, “and it would be good if the central bank took the opportunity to address the matter directly, which could avoid the need for (the United States) to take any further measures.”
“The American measures focus on the so-called Iraqi dollar auction,” according to the report, “where the central bank requests dollars from the US Federal Reserve before selling them to commercial banks, which in turn sell to companies in the import-dependent economy, where between 200 million and 250 million are sold.” Every day, millions of dollars are auctioned off.
According to the report, “the measures resulted in a shortage of dollars, prompting the Iraqi dinar to change its price by more than 150,000 dinars per dollar in the unofficial market in recent months, that is, 15% weaker than the previous official price of 132,000 dinars.”
Ali Mohsen Al-Alaq, Governor of the Central Bank of Iraq, met with US Assistant Secretary of the Treasury Elizabeth Rosenberg and her accompanying group yesterday, Wednesday, to discuss the Central Bank of Iraq’s policies on bank currency transfers and other matters.