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The Finance Committee comments on the central bank’s decision to stop the flow of the dollar

The Finance Committee commented, on Friday, on the Central Bank’s decision to stop the dollar from flowing into the market with the aim of floating the dinar and reducing its value, in order to fill part of the budget deficit and the needs of the government.

The committee’s rapporteur, Ahmed Al-Saffar, said in an interview with (Baghdad Today) that “reading the intention of the central bank to stop the flow of the dollar and floating the dinar to fill part of the state’s budget deficit is impossible, but it may be in harmony with the current situation to compensate for the shortfall in oil revenues” .

Al-Saffar added, “At the same time, the central bank may also be unintentional because of the curfew and the suspension of most life activities.”

And the rapporteur of the Finance Committee in Parliament, Ahmed Al-Saffar, spoke last Sunday about the authority of the Central Bank to issue a set of decisions on withdrawing the commission of the US dollar.

Ahmed Al-Saffar said, in an interview with (Baghdad Today), that “the decisions issued by the Central Bank regarding the commission of withdrawing the US dollar are considered within his powers and he is the one who sets the interest rate, whether by depositing or withdrawing.”

Al-Saffar added, “Iraq revenues from selling oil go to the Ministry of Finance account in the US Federal Reserve, which the Central Bank has a branch in,” explaining that “the process is that the revenues are transferred to the central bank account and the bank transfers it to the Iraqi dinar to the Ministry of Finance to pay salaries.” employees”.

He continued, “The process of withdrawing the dollar and depositing it relates to the policy of the central bank, which is monetary policy, and the central bank has the right to raise or reduce interest rates, and this is one of the methods of monetary policy that you use.”

On Sunday (March 29, 2020), the Central Bank of Iraq issued a set of decisions regarding the US dollar withdrawal commission.

And included a document issued by the bank and received (Baghdad today): “The commission for withdrawing cash for the US dollar, which comes from the incoming transfers to the bank to our accounts in the American Federal Bank, as well as the transfers received to banks from other banks by a rate of seven thousand.”

The bank added: “The amounts of the above remittances are transferred to banks by (75%) in cash in dollars according to the above commission, and (25%) pay Iraqi dinars at the official bank rate (1182) dinars to the dollar.”

He continued: “Banks must spend the (25%) above on their remittances customers at a price of (1200) dinars / dollars, and submit their requests at the end of each month to the accounting department at the central bank for the purpose of handling the two price differences in our accounts in Iraqi dinars.”

And he added: “The banks will spend the full amount of the transfer received in the Iraqi dinar if the customer desires to do so, and the two price difference will be processed by the same mentioned mechanism.”

He stressed, “The above mechanism does not include customer deposits in dollars in cash, where it is paid to the customer in full, but is restricted to customers who receive remittances received from outside Iraq of any kind, and internal dollar transfers between their banks in our accounts.” Source