CBI, Federal Reserve sign deals to ease forex transfers from Iraq after intensive meetings in UAE: official source

Shafaq News/ The Central Bank of Iraq (CBI) and U.S. representatives have inked breakthrough deals to ease restrictions on foreign transfers from Iraqi banks, a government source revealed on Saturday.

Iraq's official news agency quoted an official source saying that a series of intensive meetings have been held over the past few days in Abu Dhabi to streamline procedures for foreign transfers via the foreign currency sales window at the Federal Reserve.

Key outcomes include agreements to streamline the USD balances of five Iraqi banks at Jordanian financial institutions, simplify transfers via JP Morgan, and provide robust justifications for rejected transfers, the source said.

The negotiations involving a prominent UAE bank, the Central Bank of Iraq, and U.S. delegates were convened to establish a UAE Dirham pilot at Iraqi banks.

"The process is poised to kick off in the coming days," the source added, "final-stage negotiations are also in progress to reinforce balances of select Iraqi banks in euros at the UBAF bank, facilitating trade with the European Union."

The official source revealed that many banks will be able to benefit from balances in Chinese yuan through the Singapore Development Bank.

"Six Iraqi banks have been included, with plans to incorporate seven more," the source continued. "This initiative is geared towards financing Iraqi imports from China, estimated at a substantial $12 billion annually."

Those deals, the source explained, will help fund Iraq's imports from India, specifically pharmaceuticals and food items, which are valued at nearly $3 billion annually.