Through the dollar and the yuan… the US Treasury continues to impose its guardianship over the Iraqi economy
The Parliamentary Finance Committee had previously threatened to demand that the Central Bank address the issue of the exchange rate and the fluidity of foreign trade by using the currency basket diversification system, so that the Central Bank and Iraqi traders have more options.
A currency basket system is a monetary system used by the central banks of countries to determine the exchange rate of their local currencies. The system is based on a group of currencies chosen by the central bank of each country. The basket consists of a group of the most powerful banknotes that influence the global economy.
In an “unsuccessful” move, as described by economic experts, the Central Bank of Iraq stopped dealing in the Chinese yuan after the US Federal Reserve accused Iraq of “inflating remittances.” While economic experts warned of the effects of this decision on the local market and its causing of a rise in the exchange rate of the US dollar and an increase in inflation rates, which has negative repercussions on the economic situation of the Iraqi family, they presented 3 solutions to the Central Bank of Iraq to continue the flow of remittances to China.
In the latest Iraqi government move to stop dealing in the Chinese yuan, informed sources revealed to Shafaq News Agency, yesterday, Saturday, that the Governor of the Central Bank of Iraq, Ali Al-Alaq, is making an unannounced visit to the United States of America to discuss with officials in Washington the decision of the US Federal Reserve to stop Baghdad from dealing in the Chinese yuan.
The Central Bank of Iraq had previously strengthened its assets denominated in yuan through the Singapore Development Bank to finance Iraqi trade and imports with China by about 12 billion dollars annually. However, the policy of the US Federal Reserve is still putting a stick in the wheel of the liberation of the Iraqi dinar and achieving gains at the expense of the dollar exchange rate. Therefore, when the US Federal Reserve saw the use of the Chinese yuan in foreign transfers, it quickly issued a decision to stop transfers under the pretext of suspicions in some transfers in Chinese yuan.
Member of the Parliamentary Finance Committee, MP Moeen Al-Kadhimi, described the US Federal Reserve’s decision to stop transfers in Chinese yuan as “arbitrary” against the Iraqi economy.
Al-Kadhimi said in a statement to Al-Maalouma Agency, “The decision to stop transfers in the Chinese yuan was issued by the US Federal Reserve, claiming that there were suspicions about some transfers in the Chinese yuan.”
He pointed out that “the Central Bank of Iraq has contracted with an international company to evaluate and monitor transfers, and this company is a source of acceptance and trust for the US Federal Reserve.”
He pointed out that “after a short period, the Central Bank of Iraq will resume transferring remittances in Chinese yuan to Iraqi traders in general,” indicating that “these measures of the US Federal Reserve are considered arbitrary against Iraq and its national economy.”
For his part, commenting on this decision, economic expert, Diaa Al-Mohsen, confirmed that “the suspension of dealing in the Chinese yuan by the Central Bank of Iraq is an unsuccessful step if we take into consideration that trade dealings with China exceed 65 billion dollars.”
Al-Mohsen said in a statement to Al-Maalouma Agency, “This decision will have a negative impact on the local market, and the demand for the dollar will increase, which means an increase in the exchange rate of the US dollar in the local market, which will increase inflation rates, which will have negative effects on the economic situation of the Iraqi family.”
The Central Bank of Iraq stopped dealing in the Chinese yuan after the US Federal Reserve accused Iraq of “inflating remittances.”
During the current period, America has worked to destroy the Iraqi currency by imposing sanctions on private banks and preventing the dollar under many pretexts, which in one way or another led to a severe financial crisis in local markets.
It is noteworthy that the Central Bank of Iraq also moved to strengthen its assets in the UAE dirham and negotiated to increase its assets denominated in euros to finance trade with the European Union. Iraq also began opening bank accounts in Indian rupees for a number of Iraqi banks.
Almaalomah.me