Iraq’s Central Bank, US Federal Bank Address Electronic Platform Challenges

Officials from the Central Bank of Iraq, the US Federal Reserve Bank and the US Treasury have met in wake of the drop in the Iraqi dinar’s value against the US dollar, creating severe fluctuations in the prices of most commodities and foodstuffs.

Economic sources said Washington gave Iraq an additional three months, provided that it adheres to the standards for moving funds and preventing smuggling.

A Central Bank of Iraq delegation met for several hours with the US Federal Reserve and US Treasury delegations in Washington.

The Iraqi Central Bank said in a statement that the two sides expressed their willingness to work jointly to face the challenges of working with the electronic platform for transfers and cash, which allows the US federal bank to monitor foreign transfers from Iraq to other countries.

The statement cited the measures recently imposed by the Treasury Department on Iraq’s central bank to adopt an electronic platform for money transfers.

It added that the US delegation discussed several support and attribution mechanisms for the Central Bank of Iraq in a way that boosts its capabilities to deal flexibly with crises during this stage.

Iraqi Central Bank Governor Ali Mohsen al-Alaq confirmed the bank’s intention to launch the second package of facilities to support the stability of the exchange rate.

The Fed said the Iraqi central bank’s measures are “in the right direction for building a sober banking sector,” according to the statement.

It added that a Treasury official set forth ways to “fully support” Prime Minister Mohammed Shia al-Sudani’s government on economic reform and expressed the department’s readiness to provide the required support.

Despite the Central Bank’s decision to adjust the exchange rate to 1,300 dinars to the dollar from 1,470 dinars, confusion still prevails in the Iraqi markets. The exchange rates remain high despite the relative stability in the local stock exchange.