Why do employees get caught in a foreign currency?
2023-11-27 | 00:46
964
A senior official at the Central Bank of Iraq denied any trend to return the dollar exchange rate to its former state, and stressed that efforts are focused on reducing the gap between the dollar price in the parallel market, and its official price.
Mohammed Younis, who is the Assistant Director General of the Investments and Remittances Department at the Central Bank, said that there are many positives of the measures taken on the dollar, indicating that the problem of dollarization in Iraq began since 1990.
Except for window dollars – central bank allows banks and banks to sell at market rateExchange companies are back on and demand will be reduced – expert explains the decision to sell the dollar at the market price
Mohamed Younis – Assistant Director General of the Investments and Remittances Department in an interview with the media Karim Hammadi, followed by network 964:
The origin of the problem is the dollarization of the Iraqi economy after 1990 and its extension until the current period, there are foreign companies operating in Iraq that take their contracts with the state in US dollars and are supposed to receive their dues in dollars and transfer to their bank accounts abroad, and this is one of the concerns of the Iraqi economy (which connects the dinar to the dollar).
The intended companies are contracted with “Sep Contract” with Iraqi secondary companies and also their contracts in US dollars.
Today we meet with Korean and Japanese companies operating in Iraq and they raise their problems, that their contracts with Iraqi employees are all in dollars, and I ask them do you deal in dollars with employees in your countries!
As part of solving this problem, we agreed that banks would send US dollars to the balances of these companies and their accounts abroad, and then bring the amount into Iraq to distribute it to their employees in cash and bear the cost of transportation, shipping, insurance and others.
(About the dollar coming from abroad) We do not prevent workers from having workers and their remittances are declining in their accounts in dollars, and we do not prevent a transfer from coming to a company and staying in its account, and converting banks to the salary of the employee working in a foreign company to a dinar is never allowed, there is no problem in his balance remaining in the bank in dollars, our problem is in cash and withdrawing this balance.
If, for example, this person wants to spend it outside Iraq or buy an apartment with it, or to be a trader and buy goods, we have no problem.
We have exceptions, Chinese companies operating in the field of schools and companies operating in the port of Faw, we hand over their remittances in US dollars to fuel the demand for the dollar, the imported dollar is starting to increase supply, and we hope that the price will decrease in the near term.
Before 2022, the situation was different and everything is in our hands, but today it is out of our hands, we have international requirements if we do not meet them, the transfer will not pass, and the company if it does not have a “website” updated iq. The transfer will not pass.
Positive aspects of the measures on the dollar, our reserves are gradually rising, and our banks opened accounts in correspondent banks, Chinese channels published a while ago that Iraq began settlements in the Chinese yuan currency, and this is an achievement.
We have a delegation that went to Turkey to open channels with Turkish banks in Turkish lira and open accounts for Iraqi banks, and organize electronic payment with them, trade exchange with Turkey is great.
There is no tendency to re-exchange the exchange rate as before, and we have tended to reduce the gap in the exchange rate between the official and the parallel.
Companies that fund from the window and discover devices cooperating with us that use the black market price, these companies will be held accountable.
The most important point we are currently focusing on is the regulation of trade, especially with Iran, and we have hard work to solve this problem and we have started with steps for that.
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