The Central Bank of Iraq revealed, on Wednesday, the mechanism for ending the work of the electronic platform for foreign transfers of hard currency, while reassuring that there are no potential impacts on the exchange rate and transfer operations after ending the work of the platform.
According to a statement by the Central Bank, received by Shafaq News Agency, the electronic platform for foreign transfers managed by the Central Bank of Iraq began at the beginning of 2023 as a first phase to reorganize financial transfers in a way that ensures proactive oversight of them instead of subsequent oversight by the Federal Reserve auditing daily transfers.
The statement added that this was “an exceptional measure, as the Federal Reserve does not usually do this, and a gradual shift was planned towards building direct relationships between banks in Iraq and foreign correspondent and approved banks, mediated by an international auditing company to conduct pre-audit of transfers before they are executed by correspondent banks.”
He continued: “During the year 2024 and until now, 95% of the transfer process from the electronic platform to the mechanism of correspondent banks directly between it and Iraqi banks has been achieved, which means that only about 5% of it remains within the platform, which will be transferred using the same mechanism before the end of this year and according to the plan.”
The statement of the Central Bank of Iraq indicated that some expectations about possible effects on the exchange rate and transfer operations are baseless, because the process will not be sudden or in one payment at the end of this year, but rather it was achieved in the past period with effort and careful follow-up, except for the remaining small percentage that will be accomplished in the coming short period.
The Central Bank of Iraq confirmed that trade with the UAE, Turkey, India and China represents about 70% of Iraq’s foreign trade as (imports), which prompted the Central Bank of Iraq to find channels for transfer in euros, Chinese yuan, Indian rupees and UAE dirhams, through accredited correspondent banks in those countries.
He added in this regard: “(13) Iraqi banks have actually begun conducting transfer operations with the prior audit mechanism that has been agreed upon and approved in addition to transfers in dollars, with the provision of channels for personal transfers for legitimate purposes and external purchases through electronic payment channels and international money transfer companies and cash sales to travelers, and the payment of cash dollars for incoming transfers to the parties and purposes specified in the Central Bank’s published instructions.”
The bank noted that it has placed foreign transfer operations and fulfilled dollar requests on sound paths consistent with international practices and standards and the Anti-Money Laundering and Terrorist Financing Law.
The Central Bank’s statement concluded that “providing the aforementioned channels for all purposes at the official dollar price makes this price the true indicator of economic practices, which is proven by the reality of price stability and control of inflation. Any other price traded outside of these channels is an abnormal price that those with unorthodox or illegal practices resort to, who avoid official channels in their dealings, and bear the additional costs alone by purchasing at a higher price than the official price to deceive others about the difference between the official price and the other.”
shafaq.com
