While Iraq has seen a daily rise in the exchange rate of the dollar against the local currency for some time, despite the containment measures that the government is trying to take, smuggling and money laundering operations in favor of Iran are exacerbating the situation. to what Iraqi officials confirmed. They made it clear that “money laundering is rampant.” Favor Iran and Syria,” prompting the United States to restrict Iraq’s access to its “dollar reserves” for months in an attempt to stop those operations, according to the Associated Press.
Iraq is considered one of the main oil exporting countries in the world, and these oil revenues are the main source of income for the government, which has been headed by Muhammad Shia al-Sudani for 4 months now.
However, the government’s access to this money is “another matter.”
Since Saddam Hussein’s regime was overthrown 20 years ago, the country’s foreign exchange reserves were held by the US central bank, which gave the Americans more power to control the supply of Iraqi dollars.
To draw from these reserves, the Central Bank of Iraq solicits dollars from the US Central Bank and then sells the dollars at the official rate to commercial banks and money changers through a mechanism called a “dollar auction”.
However, the vast majority of the dollars sold at the auction are for the purchase of imported goods by Iraqi companies, but this system has been easily abused for a long time,” according to what Iraqi banking officials and politicians confirmed.
In turn, US officials indicated that they suspect that this system is used for money laundering, but declined to comment on the details.
Similarly, an unnamed financial adviser to the Iraqi Prime Minister confirmed that over the years, large sums of dollars have been sent out of Iraq through “grey market trading using fake invoices for expensive goods” to Turkey, Jordan, Lebanon and other countries.
