Iraq is considering establishing a free trade zone for selling imported goods in local currency, the Iraqi Dinar. The move would benefit consumers from competitive prices and help the dinar grow stronger in the currency market. Iraq’s free trade zone is following in the footsteps of BRICS who want to reduce dependency on the US dollar. Iraqi consumers stand to gain from the development as procuring imported goods in local currency dinar would be cheaper.
The Iraqi government intends to streamline the import procedure while guaranteeing that the dinar is used for transactions. Iraq is looking to nip the buds of the US dollar and limit its usage for selling imported products.
The free trade zone would be a center for all the imported goods, commodities, and materials. It would then be sold in bulk to the private sector in local currency, reported the Iraqi News Agency (INA). The move would help to solidify Iraq’s native economy and keep the US dollar away from transactions in the free trade zone.
BRICS: Iraq Puts Local Currency First, US Dollar Second
This is not the first time that Iraq is taking on the US dollar this year. The country announced a ban on all US dollar cash withdrawals which will be in effect from January 1, 2024. The Central Bank wants to lessen the misuse of the current reserves and US sanction evasions. The country faces $10 billion misuse in federal reserve imports every year, said Mazen Ahmed, Iraq Central Bank’s director general.
Additionally, Iraq is also interested in joining BRICS and has formally applied to join the alliance. Iraq finds several ways to limit the usage of the US dollar and keep the local currency dinar for all transactions. Read here to know how many sectors in the US will be affected if BRICS stops using the dollar.