In a rather surprising development, Iraq has officially announced its intention to ban all cash withdrawals and transactions in US dollars. The country’s Central Bank official has announced the ban, as it hopes to lessen misuse of the current reserve and US sanction evasion.
Reuters reported the proposed ban, detailing the reasoning behind its imposition. Moreover, Mazen Ahmed, the Iraq Central Bank’s director general of investment and remittances, discussed the decision’s motivations. Specifically, he pointed to the misuse of $10 billion that the New York Federal Reserve imports to the country every year.
Iran to Ban US Dollar Withdrawal and Transactions in 2024
Following a greater international push for de-dollarization, Iraq has announced that it will ban all cash transactions and withdrawals in US dollars starting in 2024. Moreover, they state that the decision is rooted in misuse of the currency, as discussed by Iran’s Central Bank officials.
Ahmed noted that around 50% of US cash imports are used illicitly, which has driven the decision. Additionally, Ahmed noted that any dollars that are deposited before the end of 2023 are still able to be withdrawn in 2024. However, he noted that after 2024, they are only going to be withdrawn in local currency. Specifically, at the official rate, which is 1,320, per the report.
“You want to transfer? Transfer. You want a card in dollars? Here you go; you can use the card inside Iraq at the official rate, or if you want to withdraw cash, you can at the official rate in dinars,” Ahmed said. “But don’t talk to me about cash dollars anymore.”
Ultimately, Ahmed noted that cash withdrawals have continued to be misused. Subsequently, the country has regulated wire transfers, which were heavily used in efforts to conduct fraudulent transactions. Now, the withdrawal ban is set to continue the efforts to diminish misuse.