The currency auction in Iraq remains one of the most ambiguous economic files in the country, which is confirmed by many Iraqi politicians and economists who see it as a drain on hard currency and one of the doors for smuggling stolen or corrupt money.

Sales of the Central Bank of Iraq, or what is known locally as the currency sale auction, witnessed great turmoil in the past weeks, after the auction witnessed a decline in the sale of currency by between 40% and 50%, which economists see as linked to the rise in the exchange rate of the dollar in the parallel (black) markets. ) Which led to a rise in the exchange rate to more than 1,500 dinars per dollar, at a time when the central bank sells one dollar for 1,460 dinars.

The fluctuation of the exchange rate of the dollar on the black market led to the turmoil of the commercial movement in the country, which contributed to the rise in consumer prices, which raises many questions about the reasons for the high exchange rate, and its relationship to the procedures of the Central Bank of Iraq and the prevention of several banks from entering the currency sale auction after warnings from the Treasury Ministry. American.

Safwan Qusay: The banned banks were acquiring 40% of the currency auction in Iraq (Al-Jazeera Net)

Many reasons

In the past weeks, the Central Bank of Iraq had excluded 4 private Iraqi banks from the currency auction (namely: Al-Ansari, Al-Sharq Al-Awsat, Al-Qabid, and Asia) following directives and warnings from the US Treasury about these banks accused of smuggling currency.

For its part, the Central Bank of Iraq justified a few days ago the reasons for the decrease in the volume of sales of the foreign currency selling window by the bank’s shift to establishing a new electronic platform for selling dollars and foreign remittances, considering that some banks are not ready enough to enter into the automation that launched its experimental work.

The financial expert, Mahmoud Dagher, goes in this direction, who adds to Al-Jazeera Net that the reason is due to the suspension of 4 Iraqi banks from entering the currency sale auction as a result of international sanctions due to their accusation of corruption, in addition to the start of the Central Bank of Iraq a new audit method and a new Swift transfer system. In a manner similar to the global system, which requires accurate details of foreign transfers, which led to the return of many transfers, and local banks reduced the purchase of large quantities of dollars due to these severe measures.

For his part, the economist Safwan Qusai believes that it is clear that there is a great demand for the dollar in the parallel market away from the window for selling the currency, which confirms the entry of new procedures for selling the currency in the Central Bank of Iraq, which prevented the entry of those who own the money, which he described as "non- legitimacy" to the currency sale window, as he put it.

In an interview with Al-Jazeera Net, Qusai explained that the decline in the volume of the dollar sold in the currency sale auction indicates that these banned banks were acquiring nearly 40% of the central bank's sales of dollars, pointing out the need for private banks to investigate Iraqi money before purchasing the dollar until Be safe from new central bank procedures.

Mahmoud Dagher rules out the continued rise in the dollar exchange rate in the Iraqi markets (communication sites)

anti-Corruption

In the meantime, Amer Al-Jawahiri, an industrial development and investment consultant, believes that the Central Bank's sales are now equivalent to half of what they were a month ago, with the increasing demand for the dollar, which indicates a lack of confidence in the Iraqi economic reality, which he described as "poor", inferring that the president showed The minister, Muhammad Shia al-Sudani, and those around him, attended the press conference to reveal the details of the theft of tax money a few days ago, which made many Iraqis feel distrustful, which led to their tendency to buy dollars, according to him.

In his speech to Al-Jazeera Net, Al-Jawahiri indicated that there is another reason represented in the speculations launched by currency traders, from which they obtain huge amounts of money without the presence of any accountant or censor, pointing out that the government campaign against corruption made many owners of illegal funds rush to try to get their money out. From Iraq quickly to avoid anti-corruption measures, according to Al-Jawahiri.

As for a member of the Parliamentary Finance Committee, Jamal Cougar, he believes that the reasons for the decline in currency auction sales and the rise in the exchange rate locally are due to the new procedures, commenting, “There are American and European measures towards the movement of money inside and outside Iraq to limit smuggling and money laundering, and limit its access to terrorist groups and militias, and therefore there is a need Increasing amounts of money, which led to an increase in the demand for dollars on the black market.

Cougar, speaking to Al-Jazeera Net, added another reason related to the large reconstruction movement inside the country, indicating that the "corrupt" money, after it became difficult to smuggle it abroad, is now being invested at home through investment projects such as residential complexes, hospitals and commercial centers, as he put it.

Jamal Cougar: There are American and European measures to monitor the movement of money inside and outside Iraq (Al-Jazeera Net)

semantics

In the midst of this, and coinciding with the exclusion of 4 Iraqi banks from the currency sale auction, and the rise in the price of the dollar locally, the Governor of the Central Bank of Iraq, Mustafa Ghaleb, affirmed last Sunday his commitment to all international laws and instructions regarding the file of combating money laundering and terrorist financing.

The Central Bank of Iraq said, in a press statement, that the governor of the central bank received last Sunday Jesse Baker, Assistant Deputy Secretary of the US Treasury for Terrorism and Financial Crimes, and that the two sides discussed cooperation in applying international standards for combating money laundering and terrorist financing and the central bank’s commitment to them.

Commenting on what is happening and the implications of this, Safwan Qusay believes that the central bank should activate the control tools over the banking companies and the parallel market in order to find out who is working to buy the dollar from the unofficial outlets, pointing out that the new procedures of the Central Bank of Iraq mean that the US Treasury was able to Follow the banks involved in removing the dollar from Iraq without investing it in goods or services inside Iraq.

Qusai is not enslaved by the fact that countries neighboring Iraq such as Iran, Syria, Lebanon and Turkey, which suffer from difficulties in obtaining dollars, tended to buy some dollars from Iraq and smuggle them through the uncontrolled border crossings, especially since the central bank provides the possibility to buy cash dollars from the Iraqi central, And that cash sales of the dollar amounted to 17 million dollars per day from the total dollar sold to commercial companies and banks.

Observers considered that the appearance of al-Sudani, surrounded by accumulated funds, increased the Iraqis' lack of confidence in the economic system of their country (communication sites)

Exchange rate prospects

For more than 3 weeks, the black market in Iraq has witnessed an unprecedented rise in the exchange rate of the dollar, which raises many questions about the possibility of this rise continuing or declining, as Mahmoud Dagher believes that the country will witness during the next two weeks the return of exchange rates to normal.

Safwan Qusai agrees with this proposition, who believes that the rise will not last long, especially since those who were dealing with the four banned banks will go to other Iraqi banks, provided that the funds are legitimate, at a time when Jamal Cougar rules out the continued rise in the exchange rate for a long period, especially With the new organization that will reduce the chaos that was associated with the coin auction.

On the other hand, Amer Al-Jawahiry believes that it is very difficult to predict whether or not the rise will continue, especially if the increasing demand for the dollar continues on the black market with the decline in sales of the Iraqi Central Bank, which means the continued rise in consumer goods prices in the country, which directly affects the Iraqis. .