CBI: Iraqi banking sector’s committed to international compliance rules

Baghdad - INA

Governor of the Central Bank, Ali Al-Alaq, confirmed today, Friday, the continuation of financing foreign trade in several foreign currencies in addition to the dollar. While he indicated that the banking sector’s application of compliance rules strengthens Iraq’s financial position globally, he pointed out that there is an international welcome from the Ministry of Finance. The US State Department and the International Monetary Fund, including the measures implemented by the bank that strengthened the banking sector’s commitment to these rules.

Al-Alaq told the Iraqi News Agency (INA): “The Central Bank followed a plan that included mobilizing all requests for the dollar within the proper and fundamental channels, while attracting all merchants, importers, and those in need of external transfers within these frameworks and channels.”.

He added, "The more the size of these channels and the number of participants expand in them, the more it affects two things positively. 
The first is the exchange rate and its stability, and the second is providing the correct compliance rules, which strengthens the reputation of the country and the banking sector externally and strengthens Iraq's financial position globally. This matter is currently being done with an exceptional and great effort, as for the first time it is witnessing Iraq is reorganizing the external transfer process through correspondent banks instead of the central bank or the Federal Bank being the executive interface for this process.

He continued, "In fact, this process is not the best practice in the world rather, it is better for all transfers to be through a relationship between the local Iraqi bank and the external correspondent bank, and the central bank carries out the process of monitoring, supervising, and enhancing foreign currency balances abroad to cover these needs.".

Al-Alaq stressed, “This matter was achieved by introducing a series of currencies into foreign trade, including the Chinese yuan, the Indian rupee, the euro, the Turkish lira, and the Emirati dirham, in addition to the dollar. Wherever there is a need that depends on the weight of trade between us and the country with which there is trade activity, we will use those currencies".

He pointed out that "the US Department of the Treasury and the Federal Bank very much welcomed the central bank's steps related to the use of correspondent banking channels, and also the application of compliance procedures and rules followed by the central bank. This also appeared in the recent International Monetary Fund report, which praised the central bank's efforts within the framework of the banking sector's compliance with anti-corruption rules, money laundering and terrorist financing.”.