Central Bank of Iraq greenlights private banks to import US dollars amid controversy
The Central Bank of Iraq (CBI) has granted official permission to three private banks in the country to import US dollars, as disclosed by a government official on Wednesday. The authorized amounts, reaching up to $100 million, have started arriving in Iraq, with one bank’s shipment already confirmed, according to the Iraqi News Agency (INA).
The CBI is actively reviewing additional requests from other Iraqi banks for importing US dollars. The Trade Bank of Iraq (TBI) is engaged in crucial discussions with international companies to transfer substantial amounts, totaling $120 million, expected to reach Iraq in the coming days, as reported by INA.
However, the CBI’s decision to allow private banks to import foreign currencies via commercial flights has triggered controversy. Iraqi lawmakers and legal experts have raised concerns, deeming it unconstitutional, according to The News Arab. Notably, CBI officials held extensive meetings with their US counterparts in Abu Dhabi recently to address external transfers aimed at covering imports.
A source within the Iraqi government revealed that Iraq has bolstered its balances in yuan through the Singapore Development Bank, allocating approximately $12 billion annually to finance trade with China. Furthermore, Baghdad has increased its assets in UAE dirham and is in negotiations to expand balances in euros to facilitate trade with the European Union.
During discussions with US officials, the CBI agreed to augment the balances of five Iraqi banks in Jordan through JP Morgan. Additionally, advanced negotiations are in their final stages to strengthen the balances of select Iraqi banks in euros through UBAF Bank for financing trade with the European Union, as stated by the source.
In a strategic move, bank accounts have been established for six Iraqi banks in the Singapore Development Bank, with plans to add seven more in the near future. This initiative aims to secure funding for Iraq’s imports from China, solidifying economic ties between the two nations.
