While reassuring that there are no possible effects on the exchange rate and transfer operations after ceasing the work of the electronic platform, the Central Bank of Iraq announced on Wednesday the procedure for ending the activity of the platform for international transfers of hard cash.
According to a Central Bank of Iraq statement obtained by Shafaq News Agency, the electronic platform for foreign transfers under management started at the beginning of 2023 as a first phase to reorganise financial transfers in a way that guarantees proactive monitoring of them instead of later supervision by the Federal Reserve auditing daily transactions.
“An exceptional measure, as the Federal Reserve does not usually do this, and a gradual shift was planned towards building direct relationships between banks in Iraq and foreign correspondent and approved banks, mediated by an international auditing company to conduct pre-audit of transfers before they are executed by correspondent banks,” the statement added.
He said, “95% of the transfer process from the electronic platform to the correspondent banks mechanism directly between it and Iraqi banks has been achieved, which means that only about 5% of it remains within the platform, which will be transferred using the same mechanism before the end of this year and according to the plan.”
Except for the small percentage that will be accomplished in the next short period, the statement of the Central Bank of Iraq revealed that some expectations about possible effects on the exchange rate and transfer operations are baseless since the process will not be sudden or in one payment at the end of this year but rather it was achieved in the past period with effort and careful follow-up.
The Central Bank of Iraq found channels for transfer in euros, Chinese yuan, Indian rupees, and UAE dirhams by means of accredited correspondent banks in those nations after the bank confirmed that trade with the UAE, Turkey, India, and China accounts for roughly 70% of Iraq’s foreign trade as (imports).
“(13) Iraqi banks have actually started conducting transfer operations with the prior audit mechanism that has been agreed upon and approved in addition to transfers in dollars, with the provision of channels for personal transfers for legitimate purposes and external purchases through electronic payment channels and international money transfer companies and cash sales to travellers, and the payment of cash dollars for arriving transfers to the parties and purposes specified in the Central Bank’s published instructions.”) said he said in this regard.
The bank observed that it has followed sound approaches consistent with international practices and standards and the Anti-Money Laundering and Terrorist Financing Law while placing foreign transfer operations and satisfying dollar requests.
The Central Bank’s statement came to the conclusion that “offering the indicated channels for all purposes at the official dollar price makes this price the accurate indicator of economic practices, which is shown by the reality of price stability and control of inflation. Any other price traded outside of these channels is an aberrant price that those with unorthodox or illegal practices resort to, who avoid official channels in their dealings, and bear the additional costs alone by buying at a higher price than the official price to mislead others about the difference between the official price and the other.
