Sources in the Central Bank of Iraq said, on Tuesday, that the continuous rise in the exchange rate is due to speculators in the currency market collecting large amounts of dollars, after they spread news related to the repercussions of the US Secretary of State’s visit to “scare people,” while they admitted that the bank’s measures did not prevent… These “sailors” who manipulate the market confirmed that a number of banks are trying to keep dollar transfers to exchange them after the end of the current year in dinars and at the official exchange rate.
The US dollar continues to rise against the Iraqi dinar, reaching unprecedented levels over the past two days, for a number of reasons.
The direct reasons for the increase are summarized, according to various sources, with new procedures related to stopping some electronic financial transactions under scrutiny, including the “Western Union” service through the “Zain Cash” application.
There are other reasons, related to what speculators did when they rumored that the visit of US Secretary of State Anthony Blinken to Iraq would raise prices to unprecedented levels, with the scarcity of the dollar in the local market, in addition to the approaching date of adopting the official price for incoming remittances in dollars at the beginning of next year.
The dollar rose rapidly over the past two days to reach the level of 168 thousand dinars per note, compared to 132 thousand as the official price approved by the Central Bank.
Speculators try to store foreign currency to sell it later at high prices.
This rise was also aided by a number of secondary reasons represented by the continued scarcity of the dollar in banks that refrain from disbursing customer transfers and deposits or even processing travellers’ transactions.
Banks continue to deliver to customers relatively small amounts of their dollar balances to encourage them to receive them next year in Iraqi dinars and at the official rate to benefit from them under the pretext that the banks do not obtain their balances from the Central Bank, which denies this matter.
A source at the Central Bank, to the 964 network:
During the past two days, the price of the dollar has risen, after we took new measures with financial transfer companies, such as “Western Union,” which stopped its transactions through the “Zain Cash” application for auditing.
The smuggling of electronic cards is increasingly continuing, as they are filled in local currency and at the official rate to withdraw money from them outside Iraq in dollars and return it here to sell it at the market price.
Most speculators are betting on an increase in the exchange rate during the coming period due to the approaching end of the fiscal year and the approaching date of approving the official rate in banks for incoming remittances in dollars, that is, paying them to those entitled to them in Iraqi dinars and at the official rate at the beginning of next year.
The issue is now outside the control of the Central Bank because it relates to two other direct parties, whose activities the new measures did not succeed in restricting. The first is represented by speculators who found a large trade in the dollar that provides them with huge sums of money through speculation and smuggling, and the second is the banks, which in turn are trying to exploit the crisis to their advantage at the expense of customers.
The speculators, who have come to be known locally as “sailors,” are making huge gains due to smuggling and speculating with the dollar. They want to exploit the crisis to the fullest extent to achieve greater gains.
Speculators smuggle the dollar by selling it and crediting its price to fill electronic cards at the official rate, then withdrawing this money outside Iraq and returning it in the form of “dollar” currency or goods to be disposed of at the parallel rate.
Banks also have a hand in the matter, by refraining from delivering deposits or transfers to customers in dollars and forcing them either to receive only a small portion of them or to wait until the beginning of next year to receive them in the local currency so that the bank keeps the dollar with it.
Some bank employees also try to exploit the dollar allocated to travelers in their banks by giving it to their acquaintances to benefit from it at the expense of other customers.
Hazem Hadi – economic expert, 964 Network:
The issue is primarily related to supply and demand, and with the smuggling operations continuing without control due to the need of countries neighboring Iraq for large amounts of Iraqi dollars, in addition to the US Federal Reserve transferring amounts less than Iraq’s actual need due to Iraq’s lack of commitment to import mechanisms and others, things are moving in this direction.
There are many speculators who try to exploit any opportunity to raise the exchange rate to benefit from it, and therefore the price rose after the visit of the US Secretary of State, considering that many commentators linked the visit of the US Secretary to the dollar crisis, even if there was no talk about this issue.
Speculation will keep the price of the dollar high if there are no real measures to solve the problem, including controlling electronic cards and providing the necessary liquidity of foreign currency in the market.
964media.com
