EXCERPTS HIGHLIGHTS FROM NADER MID EAST : PROVIDING EXCHANGE RATE STABILITY

EXCERPTS HIGHLIGHTS FROM NADER MID EAST : PROVIDING EXCHANGE RATE STABILITY

Summary: Iraq’s Exchange Rate and IMF Update

The International Monetary Fund (IMF) recently reviewed Iraq’s exchange rate policies. The Iraqi Dinar (IQD) is pegged at 1,320 IQD per US dollar since February 2023, under a conventional peg system managed by the Central Bank of Iraq (CBI).

Key highlights:

• No currency restrictions: Iraq has removed transitional restrictions under Article 14 and doesn’t impose multiple currency practices or current account restrictions.

• Modernization of transactions: Starting January 2025, all international transactions will be processed through commercial banks using correspondent banking networks.

• AML/CFT compliance: The CBI supports this system with weekly foreign currency replenishment and compliance audits focused on anti-money laundering and counter-terrorism financing.

• Diversification efforts: The CBI encourages local banks to expand ties with non-US financial institutions to strengthen the foreign exchange system.

  Read also: The IMF mission commends the Central Bank of Iraq

Key Takeaways:

• The peg provides exchange rate stability, helping investor confidence.

• The CBI plays a central regulatory role, ensuring transparency and consistency.

• Removing restrictions and modernizing the system reflects Iraq’s push for economic reform and global integration.

Overall, these steps suggest Iraq is aiming for a more stable, transparent, and internationally compliant financial system, with long-term benefits for investment and economic growth.