Iraqi economist says seven banks resuming external transactions could ease dollar pressure

BAGHDAD, Iraq — An Iraqi economist said the resumption of correspondent banking by seven Iraqi banks could shift a portion of demand for foreign currency into official channels, easing pressure on the exchange rate. Speaking to Shafaq News, economist Mohammed al-Hasani said traders and importers obtaining dollars through official channels would reduce demand on the black market, potentially leading to a gradual decline in the rate. The Central Bank of Iraq has set the official rate at 1,300 dinar per dollar, while the black-market rate has traded above 1,532 dinar. Al-Hasani said routing more transactions through banks would narrow that gap over time. The Central Bank said the lifting of restrictions on the banks' external transfers would facilitate the financing of foreign trade and strengthen confidence in the Iraqi dinar. It announced that the seven banks were preparing to resume operations through correspondent banking channels during a Washington visit by a delegation led by Central Bank Governor Ali al-Zeydi, held under an agreement with the U.S. Treasury Department. Prime Minister Mohammed Shia' al-Sudani described the development as an important step toward integrating Iraq's banking sector into the global financial system. Al-Zeydi said the Central Bank would continue to support financial reforms and transparency standards.