The sell currency window started as a timed measure

Thursday 01 April 2021 94

The sell currency window started as a timed measure
Baghdad: Mustafa Al-Hashemi

The Central Bank holds a daily auction (window) to sell foreign currency to banks, a measure it took after 2003 to raise the value of the dinar, which was collapsing during the 1990s, because this measure was proposed to be temporary until the currency stabilizes, according to the advisor to the Iraqi Institute for Economic Reform, It was decided not to continue with the currency selling window, so that the dinar was stabilized against the dollar in subsequent years, but it continued despite that.

Counselor Hussain Al-Khaqani told Al-Sabah that "one of the central bank's duties is to stabilize the exchange rate by receiving proceeds from selling oil in dollars, and pumping dinars to the Ministry of Finance in return, to support the approval of the budget, especially the operational ones."

Al-Khaqani added, "Before the year 2003, the central bank did not work with this procedure, but the circumstances that came after that year made it necessary for the central bank to take a temporary measure that would raise the value of the dinar, which was very low against the dollar, and this procedure represented the opening of a window to sell the currency, in which it participated." Banks until achieving a balance in the market and adjusting the exchange rate. "

He explained, "The central bank receives two reports per day (morning and evening) on ​​the prices of basic materials (food) within the daily market movement for the purpose of displaying or reducing the supply of dollars, in the window of currency sale, accordingly."

The advisor to the Iraqi Institute for Economic Reform confirmed, "What the central bank sells now of dollars has decreased a lot from about 200 million dollars per day to much less, especially after the recent exchange rate adjustment on the value of the dinar."

According to a statement by the Central Bank, its foreign currency sales amounted to 25 million, 905 thousand and 199 dollars yesterday, with the participation of 7 banks to meet the requests to enhance the assets abroad, and the Central Bank noted that the data on foreign currency sales are sent to the General Tax Authority at the end of the fiscal year The Central Bank pointed out that "the classification of banks and companies depends on the level of compliance with the rules and standards of compliance with the Anti-Money Laundering and Terrorism Financing Law No. 39 of 2015, and the Central Bank's instructions regarding the sale and purchase of currency, and the classification does not represent an evaluation of the performance of banks, which is subject to other international standards."

For his part, the specialist in banking affairs, Samir al-Nusiri, suggested that the Ministry of Finance implement the window of currency sale under its supervision and to clear the responsibility of the Central Bank from it.

Al-Nusairi explained to Al-Sabah that the proposal is to assume the Iraqi Trade Bank affiliated to it, and the role of the Central Bank in working in the window of currency sale, by transferring the revenues of the Ministry of Oil sales of crude in dollars to the Ministry of Finance in dinars, and releasing the Central Bank from it.




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