Iraq’s central bank has eased restrictions on the sale of dollars in a step likely to boost the dinar currency, officials said on Tuesday. The central bank tightened rules in April over who could participate in its daily dollar auctions and the amount they could buy, seeking to stabilise the dinar and stem the illicit transfer of US currency to neighboring countries under sanctions.
Reversing those moves on Tuesday, the central bank said it would double lenders’ weekly share of cash and allow them to determine the price, which was previously fixed at 1,189 dinars to the dollar. Iraq is recovering from decades of war and sanctions, and its economy is still very centralised. Oil accounts for 95 percent of government revenues.
The latest easing of restrictions also mean traders taking part in the central bank’s dollar auctions will no longer be subject to money transfer quotas. The steps were taken because the dinar-dollar exchange rate is now stable and better implementation of anti-money laundering regulations will prevent dollars being sold on to countries under sanctions, Deputy Central Bank Governor Mudher Kasim said.
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