The US dollar is the first global currency for foreign trade transactions between countries of the world. It constitutes 80% of the volume of international financial transactions and represents about 60% of international reserve currencies. The dollar is the only currency that accommodates large financial transactions in the oil and energy sector and global oil trades amounting to 100 million barrels in addition to other commodities. Other currencies constitute about (20%-25%).
The dollar plays a fundamental role in the control of the American economy over the global economy in various fields, and many countries tried to get rid of the dominance of the US dollar in previous periods, but they could not. Therefore, the BRICS group was established, and its member states, namely China, Brazil, India and South Africa, are trying to limit the dominance of the dollar in international commercial and banking transactions, and the number of countries in it has now become about 9 countries.
After several countries joined, including Arab countries such as Egypt, the Kingdom of Saudi Arabia, and the United Arab Emirates, in addition to Ethiopia and Iran in 2024, and its main goals are to limit the dominance of the dollar in global trade, cooperation between the tax and customs authorities of the group’s countries, and to reach the creation of a new currency for use among the group’s countries.
Iraq, with the aim of reorganizing foreign trade financing, began concluding agreements with central banks with which Iraq has extensive trade exchange, in agreement with solid correspondent banks in China, India, the Emirates and Turkey, to deal in Chinese yuan, Indian rupee, Emirati dirham and Turkish lira, to achieve two goals:
1.the first is to enable our banks to agree with correspondent banks in these countries and other countries to deal directly with them after canceling the electronic platform,
2.and the second is to introduce new foreign currencies for commercial and banking transactions other than the US dollar, to enable banks that do not have US correspondent banks to continue their foreign transfers with those alternative countries according to special agreements with their central banks.
This can help control the reduction in the widespread local demand for the US dollar, create a state of balance in the money market, and maintain the purchasing power of the local currency, the Iraqi dinar. This method is now in effect, in addition to the existence of dealings in the US dollar as well.
