The decision to cancel the dollar movement monitoring platform reflects Iraq's effort to modernize its banking system and improve financial oversight.
The involvement of major international banks in the new transfer mechanism is expected to enhance the credibility and efficiency of Iraq's banking operations.
The transition period will likely see fluctuations in the dollar exchange rate, but with government support, banks are expected to adapt and stabilize.
The new system may initially cause disruptions in the market, but it is anticipated that stability will return as banks adapt to the changes.
The elimination of the parallel market could lead to a more transparent and regulated currency exchange environment in Iraq.
As banks improve their capabilities, Iraq may see an increase in foreign investment and trade opportunities.
The Central Bank of Iraq announced on September 4, 2024, that it will discontinue the electronic platform for monitoring dollar movements and transfers by early next year, marking a significant shift in Iraq's financial policies.
This decision is expected to fundamentally alter financial transfer mechanisms, impacting exchange rates and overall financial stability in Iraq. Experts indicate that while the transition may pose challenges, it also presents opportunities for legitimate trade financing.
Economic expert Safwan Qusay noted that the new transfer mechanism will involve the Central Bank of Iraq and the US Federal Reserve as monitoring bodies, which could enhance transfer operations and reduce data manipulation.
The shift aims to eliminate illegal trade practices associated with the parallel market, as banks improve their capabilities in international transactions. Qusay anticipates that many banks will resume international business after necessary adjustments.
However, economic expert Nabil Jabbar Al-Tamimi cautioned that the transition could temporarily increase the dollar exchange rate, although the government is working to support banks during this adjustment period.
