The Problem Of Fluctuation In The US Dollar Exchange Rate
Financial and Banking Advisor Samir Al-Nusairi Samir Al-Nusairi Once again, the fluctuation in the US dollar exchange rate has returned to the forefront, and this time it is due to speculators and traders of crises and wars, exploiting the war currently being waged by the Zionist entity against our Arab people in Palestine and Lebanon and the confusing security situation resulting from that.
The current level is above 1,500 dinars on the black market, and the continuation of this problem from time to time can be attributed to several reasons, including before 2023 the lack of control over the organization of trade financing and the lack of a clear trade policy, the entanglement of policies and the lack of an annual import program for the private sector in terms of quantities and amounts, but imports are open and without controls on external transfers.
In addition to “the lack of control over illegal imports and unofficial border crossings, as well as the presence of about 1,200 exchange offices spread across all governorates that are not licensed by the Central Bank and deal in cash dollars and about 12,000 outlets for disbursing pensioners’ salaries and social care that deal with its trading at the exchange rate on the black market.”
And that “most traders who obtain the US dollar at the official price from the Central Bank, but they sell their goods in the local market at the black market price, as well as the lack of global correspondent banks previously dealing with our banks and accounts were not opened for them in the currencies of countries with which we have extensive trade exchange such as China, India, Turkey and the Emirates.” Also,
“the failure of traders and some Banks comply with international banking standards that guarantee that the dollar reaches the final beneficiary, so dollar transfers are manipulated and reach countries that are sanctioned by the US or are internationally besieged.
Therefore, the efforts of the Central Bank and the government in 2023 focused on drawing up a strategy for financial and banking reform in order to control the stability of the exchange rate.
“Among these strategies are organizing foreign trade financing, building new international understandings with global banks, and opening accounts for our banks in correspondent banks, as more than 30 accounts have been opened with American, Chinese, Emirati, Turkish, and Indian banks.
We expect that during the next two months the number of Iraqi banks that have accounts in correspondent banks will increase due to the efforts made by the Central Bank to provide aid and assistance to them and coordinate with the targeted correspondent banks.
“Opening dealings with local currencies such as the Chinese yuan, the European euro, the Emirati dirham, the Turkish lira, and the Indian rupee in foreign transfers with the aim of reducing the demand for the US dollar, in addition to taking measures in cooperation between the Central Bank and the government to expand the comprehensive digital transformation from the cash economy to the digital economy and stimulate the use of electronic payment tools.
This strategy aims to “put pressure on speculators dealing in cash dollars in the black market and limit their activities that harm the national economy, which was discussed in last week’s meeting of the Prime Minister in the presence of the Minister of Finance, the Governor of the Central Bank, advisors, and directors of government banks.”
It should be noted here that “the availability of foreign exchange reserves for the Central Bank exceeding 100 billion dollars and a gold reserve exceeding 143 tons confirms that the Iraqi dinar will recover and is strong, as the local currency in circulation is covered by the foreign exchange reserve, in addition to the other executive measures to support and stimulate the local product and control the monetary market and the commercial market, which will control the exchange rate, as I expect, in the near future.”
