Iraq’s central bank intends to end taking payments in dollars by January 1, 2024, according to a Reuters report from a top bank official on Thursday.

Iraq relies heavily on imports to meet its needs, increasing demand for the dollar.

In recent months, Iraq has stepped up procedures to support local currency transactions, including paying foreign workers’ wages and salaries in dinars, with the aim of supporting the dinar. Dinar should be used instead of dollars in transactions.

Anyone who deposits dollars in banks by the end of 2023 may receive the amount in dollars in 2024, but the deposited dollars will be withdrawn, Massen Ahmed, director general of Iraq’s central bank’s investment department, reported Reuters. 2024 will be withdrawn in local currency and official exchange rate. 1320 dinars to the dollar.

The move aims to stop the illegal use of about 50% of the $10 billion that Iraq imports in cash from the US Federal Reserve annually, Ahmed told Reuters.

Ali al-Allaq, governor of the Central Bank of Iraq, said on September 24 that internal business and other transactions would be restricted to the Iraqi dinar instead of the dollar.

After the US Federal Reserve imposed strict restrictions on dollar transactions at Iraqi banks to prevent the smuggling of dollars into Iran, Iraqi authorities tightened controls on traders and exchange-rate dealers to control the market.

(Prepared by: Jehan Lakhmari, Edited by: Reem Shams El-Din, Contact: [email protected])

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