Mаhmoud Daghеr, an adviѕor to the governer of the Cеntral Bank of Iraq and the bank's spokesman, confirmed today, Saturday, that increasing cash dollar shipments to Iraq will contribute to market stability and enhance the value of the Iraqi dinar. He pointed out that a single shipment is worth about half a billion dollars, with expectations for new shipments that could reach a value of one billion dollars.
Daghеr said in a press interview reported by "Video News Agency" that "Iraq funds its imports primarily through wire transfers and bank credits that are sent directly to exporters, away from the cash market, while cash transactions do not exceed 10%, and are allocated to meet the needs of travelers, students, and other purposes."
He added that "the Prime Minister's indication of increasing cash dollar shipments came from experience and knowledge of the nature of the Iraqi market, which is characterized by its high sensitivity to the supply of cash dollars," explaining that "increasing the amounts of cash dollars in the market pushes towards enhancing the value of the Iraqi currency and bringing it closer to its real value at a level of 152 thousand dinars per 100 dollars."
He clarified that "this sensitivity is linked to the nature of trade transactions with some countries, as well as the importance of providing cash dollars in reassuring market participants and holders of foreign currency," expressing hope that "the arrival of new shipments will contribute to achieving stability in the market."
He pointed out that "increasing the supply of cash dollars through various means adopted by the Central Bank enhances confidence in the market, as prices are not determined solely based on actual supply, but are mainly influenced by future expectations."
He continued that "the expectations of companies and individuals for the continued flow of cash dollars in larger quantities lead to a decrease in unofficial demand for dollars outside the licensed banks from the Central Bank, which positively reflects on the stability of the exchange rate."
Regarding the size of cash shipments, Daghеr noted that "the value of a single shipment arriving by air to Iraq is nearly half a billion dollars, and two shipments have arrived, while the transfer of cash dollars previously faced difficulties due to the lack of security and military operations in the region."
He emphasized that "the movements of the Prime Minister and the Central Bank of Iraq contributed to convincing the U.S. Federal Reserve of the importance of ensuring the smooth flow of cash dollar shipments to Iraq, which helps reassure the local market."
He confirmed that "there is a shipment expected to arrive in Iraq soon, in addition to the possibility of other shipments totaling a value that may reach one billion dollars, equivalent to the loads of two planes, to meet market demand," indicating that "the continuation of this process is also linked to calming the security and military situations in the region."
Regarding agreements on cash dollar supply, Daghеr explained that "the Central Bank of Iraq agrees at the beginning of each year with the U.S. Federal Reserve on the size of its annual cash dollar needs, which may reach, for example, 10 to 12 billion dollars, to be delivered through one or two shipments from time to time, with the necessary security conditions for their transport."
He added that "the Central Bank is also seeking to expand the use of banking cards in financial transactions, as Iraqis have started to rely more on them for shopping, paying fees, and meeting various needs in dollars, but the level of awareness in using cards is still below the required level, prompting some citizens to prefer cash transactions."
Daghеr pointed out in his remarks that "increasing cash dollar shipments at this stage represents a suitable step to enhance market stability, and the continued flow of them will help reassure traders and positively influence their expectations, which are a key factor in determining the exchange rate."