Iraq's Interior Ministry confirms Shafaq News Agency's news: the arrest of forex traders in Baghdad

Shafaq News/ The Iraqi ministry of Interior announced the arrest of a group of forex traders on Saturday.

The ministry stressed that apprehending the traders did not "target companies who deal legally."

Earlier today, Shafaq News Agency exclusively revealed the operation.

A source told our Agency that the security forces were tracing a "gang of forex traders" involved in "manipulating the market and tampering with the US dollar's exchange rate against the Iraqi dinar."

The force chased some traders who tried to evade the arrest but refuted the media reports claiming that armed altercations occurred during those manhunts.

It is still unclear how many traders have been arrested, and there is no official statement yet from the government on the move.

Financial expert Nabil Jabbar al-Tamimi said that the arrestees are purportedly involved in "black transactions" that continue to exacerbate the depreciation of the national currency, prompting the authorities to deploy "police tactics" to handle the matter.

"Suppressing black transactions contributes to reversing the dinar's depreciation and restoring the regular exchange rate," he explained.

Al-Tamimi highlighted a certain "interference" in the Iraqi banking system that allows a leak of hard currency to "neighboring countries."

Since 2004, the Central Bank of Iraq has sold US dollars at a foreign currency auction as one of its policy tools to maintain monetary stability.

However, the process has been mired with accusations of corruption, money laundering, and the channeling of dollars to Iraq's neighbors, including Iran, Syria, and Lebanon. Iran and Syria are under punishing US sanctions.

As of late 2020, the official rate set by the Central Bank of Iraq for banks and exchange companies was 1,182 dinars to the greenback, while the rate on the street was around 1,200 dinars.

Since then, the government has devalued the local currency to 1,460 dinars to the dollar for banks and 1,470 dinars for individuals due to a liquidity crisis caused by a drop in oil prices on the international market.

But since last month, the Iraqi dinar has wavered against the dollar as the Federal Reserve Bank of New York introduced new measures to stop the flow of dollars to sanctioned countries.

It has blacklisted several Iraqi banks for their suspicious foreign transactions. In contrast, new scrutiny measures have been brought to scrutinize releasing money from the US to cover imports and other needs.

That has pushed the dinar exchange rate in the black market to more than 1,500 to the dollar, fuelling public anger over soaring goods prices.

On Saturday, the exchange rate on the street hovered around 1,650 dinars to the dollar.

The Iraqi government has been trying to control the exchange rate to no avail, blaming the US and saying traders were manipulating the exchange rate.