The blacklisting of 14 Iraqi banks by the United States has triggered protests outside the Central Bank of Iraq on July 26 in Baghdad and raised concerns among bank owners and citizens. The private banks are accused of allegedly syphoning funds to Iran and engaging in money laundering, leading to sanctions that prohibit them from dealing with US dollars. This ban has had significant repercussions, causing the value of the Iraqi dinar to fall drastically against the dollar in just two days, reports Al Jazeera on July 27.
The protests organised by the Thuwar Tishreen group reflect the frustration and demands of the Iraqi people, who have already been facing economic challenges, particularly inflation. The ban not only affects the currency exchange rate but also poses potential risks to foreign investment and the overall stability of the Iraqi banking sector. Bank owners are urging the government to intervene and undo the damage caused by the ban.
The central bank governor's explanation that the dinar's decline is partly due to traders resorting to the black market for hard currency further highlights the complexity of the situation and the need for effective measures to stabilise the currency.
Earlier Daryo mentioned that on July 19, the Wall Street Journal reported that the United States has implemented a ban on 14 Iraqi banks from conducting dollar transactions as a measure to prevent the illegal transfer of U.S. currency to Iran. This action was taken jointly by the Treasury Department and the Federal Reserve Bank of New York and is part of a larger effort to crack down on financial activities that may support Iran and infringe upon U.S. sanctions.
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