TNT
Tishwash:
An expert explains to “Sputnik” the economic impact of preventing local dealing in dollars in Iraq
The Iraqi economic expert, Omar Al-Halbousi, confirmed that the Sudanese government’s decision to end dollarization conflicts with its permission for banks to import dollars for the benefit of companies and organizations operating in the local market, and may exacerbate the gap between the official exchange rate and the parallel market price.
Speaking to Sputnik , today, Wednesday, he said that preventing dollarization in the local market and allowing the import of the dollar for the benefit of parties and companies operating in the local market will undoubtedly move the direction of this dollar to the parallel market, which has been officially recognized by the Central Bank of Iraq.
He added that this matter will exacerbate the exchange rate problem and further widen the gap between the official exchange rate and the exchange rate in the parallel market due to the increased demand for the dollar by smugglers.
Al-Halbousi added that these measures allow the entry of new speculators into the parallel market, in addition to the fact that the process of ending dollarization takes place selectively, that is, it is applied to those who do not have influence in the government, while those who do have influence are turned a blind eye to, which is another reason that hinders the successful process of ending… Dollarization.
The economic expert pointed out that ending dollarization prompted merchants to raise the prices of items sold in Iraqi dinars at the equivalent price of the dollar in the parallel market, which led to an increase in price inflation, which is trending upward over time.
Al-Halbousi stressed that the process of ending dollarization will lead to an increase in the exchange rate in the Iraqi market, which will lead to a decline in the value of the Iraqi dinar, an increase in the prices of materials, and a decline in the purchasing power of the citizen, thus exacerbating economic problems.
Last March, the Central Bank of Iraq banned the use of the dollar in ATMs, and stressed that electronic financial services provided inside Iraq through ATMs, point-of-sale devices, and the electronic payment gateway must be in Iraqi dinars.
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During the past hours, the Central Bank took a number of measures that would restore dealing with the Iraqi dinar and prevent the dollar at home.
In turn, in late 2022, the United States tightened procedures regarding Iraq’s access to its foreign reserves held at the Federal Reserve, after suspicion of transferring funds to Iran, Syria, and other entities subject to sanctions. This step led to a decline in the value of the Iraqi dinar and an escalation of popular anger in Iraq. link
Source: Dinar Recaps
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