Economic expert Ziad Al-Hashimi cautioned today, Saturday, about the implications of statements regarding the increase of cash dollar shipments to Iraq, emphasizing that these shipments do not necessarily mean pumping dollars into the local market or automatically reducing the parallel exchange rate.
Al-Hashimi stated in a clarification followed by "Video News Agency" that the Prime Minister's statement about the government's success in increasing cash dollar shipments via the U.S. Federal Reserve to $500 million monthly, with plans to raise it to $1 billion, could send inaccurate messages regarding the nature of the dollar's movement in the Iraqi economy and the mechanisms for securing it.
He explained that the Central Bank of Iraq does not release cash dollars for free sale in the local market to increase supply among money exchange companies; instead, it provides them through specific banking channels for purposes including travel, medical treatment, education, and some remittances, while the dollars allocated for external transfers are used to finance trade and imports.
He added that reducing the allocation of cash dollars designated for travelers and specifying time periods for receiving them might limit the impact of increasing shipments, noting that the Central Bank previously confirmed that cash dollars are not allocated to finance purchases within Iraq, but are restricted to permitted purposes.
Al-Hashimi pointed out that increasing cash dollar shipments could help reduce travelers' demand for dollars from the parallel market when provided through official channels, but it does not automatically lead to an increase in supply in the local market or a decrease in the parallel exchange rate.
He affirmed that achieving a real and sustainable decrease in the parallel exchange rate requires addressing the reasons for the demand for dollars outside the official banking system, facilitating importers' access to approved funding channels, as well as limiting speculation and informal cross-border trade.