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Waylon Watson
Waylon Watson

Where Can I Buy Iraqi Dinar From A Bank

The value of the Iraqi dinar is fixed by the Iraqi government and does not change, unless the central bank changes the exchange rate. This means that the government decrees the price for sale and purchase of the currency.

where can i buy iraqi dinar from a bank


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Usually, brokers selling Iraqi dinar in cash charge a 25% to 30% premium over the official rate. Entities who buy the currency risk major losses immediately after buying it. Selling IQD is also challenging since there is practically no demand outside Iraq. Brokers usually bid 30% under the formal exchange rate if anyone wants to sell Iraqi dinars to them. The transaction costs could be decreased from 60% to 40% of the invested capital if there is no change in the exchange rate.

Legitimate forex exchange in the USD/IQD currency pair is practically non-existent. Major banks do not offer trade-in Iraqi dinars. IQD is only available for purchase or sale by selected brokers or money exchangers, who may or may not be legally authorized. As mentioned, the brokers or money exchangers typically charge a fee of 30% or more over and above the authorized exchange rate.

On Dec. 19, 2020, the Central Bank of Iraq devalued the dinar against the US dollar, which dropped from 1,182 dinars to 1,450 dinars per $1, due to the financial crisis that hit the country in the wake of the drop in oil prices in the global market to less than $30 a barrel, and the increase in Iraqi government spending on state employees' salaries. To secure these salaries Iraq had resorted to loans from banks and to the re-deduction of bonds to the Ministry of Finance, which amounted to more than 30 trillion dinars ($20.6 billion).

Ever since Sudani took office, the market has been witnessing a stagnation phase. Businessmen and citizens wary of the devaluation of the dinar cut their purchases of assets to avoid any future loss ensuing from the exchange rate difference.

Dagher urged the government to cut the state employees' salaries, which amount to more than 63 trillion dinars ($43 billion) and to allocate the savings made from this reduction for achieving economic development.

A.F. Alhajji, an associate professor of economics at Ohio Northern University who has studied the Iraqi economy for 15 years, received e-mail from Mideast currency speculators urging him to buy Iraqi dinars, similar to messages he got after the dinar was issued in 2004.

On Thursday, the last day of business in this largely Muslim country, the dinar was trading at 1,424 against the dollar, according to the central bank. That was its strongest price since March 2004, when it was 1,420.

In November, the Central Bank of Iraq added four new banks to the list of those banned from dealing in dollars. Two U.S. officials confirmed that the Fed requested the four banks be blocked because of suspected money laundering. They spoke on condition of anonymity because they were not authorized to comment on the case.

The currency exchange will last from October 15, 2003 to January 15, 2004. Currency can be exchanged at any time during this three-month period. Locations where money can be exchanged will include banks and other official locations.

Following demonstrations in Iraq over the recent slide of the Iraqi dinar against the dollar, a delegation of Iraqi officials will travel to Washington to resolve issues related to US banking restrictions.

As hundreds of people demonstrated near the central bank headquarters in Baghdad on Wednesday to protest the devaluation of the Iraqi dinar against the dollar, which has triggered a rise in prices of imported consumer goods, an informed source told Iran International that representatives from the Iraqi government are scheduled to go to US next month to investigate the smuggling of dollars from Iraq to Iran.

The dinar went into a tailspin against the dollar after the New York Federal Reserve imposed tighter controls on international dollar transactions by commercial Iraqi banks in November to halt the illegal siphoning of dollars to neighboring Iran, which is under tough US sanctions.

Late in December, an informed source in Baghdad told Iran International that Washington has received reports on Iraq conducting trade with Iran using US dollars despite US sanctions. This source added that the names and bank account numbers that have secretly interacted with Iran have not yet been revealed, but the Biden administration has found out that a large amount of US dollars has been transferred from Iraq to some countries, including Iran.

The Iraqi government depends on the auction to convert dollars, which it earns through oil revenues, into Iraqi dinars. Last year, about $200m per day on average was being sold through the auction to private banks and companies.

The price of consumer goods has increased. This week, the price of rice rose to 2,350 dinars per kilo (about $1.57), up from 1,850 dinars per kilo (about $1.25), while the cost of cooking oil has more than doubled, from 1,250 dinars per litre (about $0.85) to 3,000 dinars (about $2).

Four private Iraqi banks which had transferred the bulk of the money to the two Egyptian banks had been ordered by the Central Bank of Iraq to stop dealing with them in November, following a directive from the Federal Reserve, the leader said.

This shortfall is usually covered from currency stocks held by the Central Bank, through internal loans between the bank and the government, by printing more currency, or by other financial activities.

While the official exchange rate has been fixed at 1,470 Iraqi dinars against the dollar, the currency was trading at up to 1,600 to the greenback on local markets from mid-November, before settling at about 1,570 dinars, according to state media.

Iran has been getting the Iraqi government to liquidate its deposits and ship them in cash from New York to Iraq, where the Central Bank of Iraq would hold auctions to sell these cash dollars on the market for Iraqi dinars.

America's central bank asked Iraq to stop liquidating deposits in cash. In the absence of cash and with the continuous demand for US dollars, the Iraqi dinar kept falling on the black market until it hit an exchange rate of 1,700 to the dollar.

Neither does it mean that the ability of Iraqis to buy imports has shrunk, as the central price, determined by the Central Bank of Iraq, has not changed. And so, the government of Mohammed Shiaa Al-Sudani purposely raised the dinar's value to 1,300 against the dollar. The officially set central price means that any Iraqi importer can deposit Iraqi dinars in the Central Bank, which the bank can convert into dollars and transfer through New York and the global financial system to the supplier outside Iraq without using cash.

The bottom line is that any Iraqi who has a card issued by an Iraqi bank can use it at the official exchange rate without needing cash dollars. The high exchange rate of the dollar into the dinar, and the low conversion rate of the dinar to the dollar effectively means that cash-based financial transactions made outside the international Swift system are drying up.

Iraqis travelling abroad may need cash dollars for personal expenses. To address this issue, Iraqi authorities announced that passengers departing from Iraqi airports could convert Iraqi dinars to US dollars at 1,320 dinars per dollar, provided they carry a ticket and boarding pass and have passed through passport control. Immature banking sector Iraq does not suffer from a lack of liquidity nor a depreciation of its currency.

It is Iran's network in Iraq that suffers from a lack of liquidity, and the high price of the dinar in the alternative economy circles it operates comes as a way of compensating for the US sanctions imposed on it. The problem that Iraq still faces is that its banking sector is still immature and unable to meet the needs of the majority of Iraqis.

This prompted the Central Bank to carry out extensive import operations, pending the expansion of the Iraqi banking sector, as well as improving its ability to engage in the global financial system and transfer funds to and from Iraq. As for Iran, it is isolated from the global system due to the US sanctions imposed on it, so it resorts to cash liquidity as the only way to evade these sanctions. 041b061a72


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