CBI ends electronic platform for foreign transfers, assures no exchange rate impact
Shafaq News/ The Central Bank of Iraq (CBI) announced, on Wednesday, the cessation of its electronic platform for foreign currency transfers, assuring that this move will not affect exchange rates or transfer operations.
Launched in early 2023 as a preliminary measure, the platform was designed to reorganize financial transfers with proactive oversight, rather than the subsequent review previously conducted by the Federal Reserve. The plan involved transitioning to direct banking relationships between Iraqi banks and correspondent banks abroad, with pre-execution audits performed by an international auditing firm.
As of 2024, 95% of the transition from the electronic platform to direct bank transfers has been completed, with the remaining 5% expected to be finalized by the end of the year. CBI emphasized that any anticipated impacts on exchange rates or transfer processes are unfounded, as the transition has been gradual and closely monitored.
The bank noted that 70% of Iraq's foreign trade, including imports from the UAE, Turkiye, India, and China, necessitates new channels for currency conversion, including the euro, Chinese yuan, Indian rupee, and UAE dirham. Currently, 13 Iraqi banks are implementing the new pre-audit process for currency transfers, including transactions in US dollars.
CBI affirmed that these changes align with international standards and anti-money laundering laws, maintaining that the official exchange rate is a true reflection of economic practices. Any discrepancies in exchange rates are attributed to unauthorized practices, which involve higher costs for non-official transactions.
