Protesters, banks call for motion after Iraqi dinar plunges post-US sanctions | Industry and Financial system Information

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Fourteen private banks have been banned from dealing with the US dollar for reportedly siphoning funds to Iran and money laundering.

Dozens of people protested outside the Central Bank of Iraq in Baghdad while bank owners urged action as the Iraqi dinar fell after the United States blacklisted 14 Iraqi banks.

The demonstrations took place on Wednesday as the 14 banks issued a joint statement calling on the Iraqi government to intervene.

The private banks are banned from dealing with US dollars for reportedly siphoning funds to Iran as well as on suspicion of money laundering.

The latest US sanctions are in addition to previous ones on eight banks, leaving almost a third of Iraq’s 72 banks blacklisted, two Iraqi central bank officials said.

The ban has pushed the market rate of the dollar from 1,470 dinars per dollar to 1,570 dinars per dollar in the last two days.

The protests outside the central banks were organised by the Thuwar Tishreen (October Revolutionaries), a group that started mass protests in 2021, calling on the government to take action to halt inflation.

Security forces stand guard during a demonstration in front of the Iraqi central bank as currency plummets against the U.S. dollar, in Baghdad, Iraq
Security forces stand guard during a demonstration in front of the Iraqi central bank [Hadi Mizban/AP]

Haidar al-Shamaa, owner of a private bank in Baghdad, told a news conference on Wednesday that the ban will not only affect the dollar price but also limit foreign investment.

“The listing of almost one-third of the private banks as banned from dealing with the US dollar will have negative consequences from many perspectives,” he said, calling on “the brothers at the Iraqi government to work … to undo the damage which occurred to us specifically, and to the Iraqi banking section in general”.

The banks said they are ready to face an audit, with al-Shamaa also saying that the banks “have nothing to do with political tensions, but are independent financial institutions”.

The central bank governor Ali al-Allaq said the dinar has taken a dip because some traders are sourcing hard currency in the black market instead of using the central bank’s official exchange platform.

Al-Allaq met Iraqi Prime Minister Mohammed Shia al-Sudani on Sunday to discuss measures to stabilise the dinar against the dollar.

Demonstrators protest in front of the Iraqi central bank as currency plummets against the U.S. dollar, in Baghdad, Iraq, Wednesday, July. 26, 2023. Over the past two days, the market rate of the dollar jumped from 1,470 dinar per dollar to 1,570 dinar per dollar.
Demonstrators protest in front of the Iraqi central bank with almost a third of Iraq’s 72 banks now blacklisted [Hadi Mizban/AP]

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