Currency Crisis in Iraq: The Dismissal of the Central Bank Governor | WORLD

[AUDIO TRANSCRIPTION]

Welcome to Bryf, your go-to source for breaking news, analysis, and commentary from around the world. I'm your host Kyla. Today, we're discussing the recent dismissal of Iraq's central bank governor, Mustafa Ghaleb Mukheef, by Prime Minister Mohammed al-Sudani. This move comes amid growing anger over the weakening of the local currency, the dinar, in recent weeks. The dinar has dropped sharply against the U.S. dollar in unofficial currency markets, raising the cost of living for ordinary Iraqis in the country's dollar-dependent economy.

The dinar last traded at around 1,600 to the dollar on Monday, compared with the official exchange rate of 1,460. This has led to higher prices for imported goods, including staples such as eggs, flour, and cooking oil. Many Iraqis are blaming the U.S. for the dinar's weakness. The New York Fed and the Central Bank of Iraq began enforcing tighter controls on international dollar transactions by commercial Iraqi banks in November in a move to curtail money laundering and the illegal siphoning of dollars to Iran and other heavily sanctioned Middle East countries.

Since the procedures went into effect, 80% or more of Iraq's daily dollar wire transfers, which previously totaled over $250 million some days, have been blocked because of insufficient information about the funds' destinations or other errors, according to U.S. and Iraqi government.

Iraqi banks had operated under less stringent rules since shortly after the 2003 U.S. invasion that toppled Saddam Hussein. Years of weak governments and crises—from the insurgency during the U.S. occupation to Islamic State's takeover of large portions of the country—led successive administrations to put off bringing Iraq's banking system into compliance with global money-transfer practices until now, officials said.

Prime Minister Sudani, who took office just as the currency began to drop, said that he would send a delegation to Washington next month with a proposal to temporarily end the tighter scrutiny of Iraqi transactions. He also sought to reassure Iraqis, saying the currency fluctuation was temporary and the exchange rate should stabilize soon as the government takes steps to safeguard public money and prevent smuggling and money laundering.

In response to the dismissal of the central bank governor, Muhsen al-Allaq, who previously served in that role between 2014 and 2020, has been named as the new central bank governor.

And that's all for today's episode of Bryf. We hope you found this coverage of Iraq's Prime Minister dismissing the central bank governor and the weakening of the dinar informative and insightful. We'll be sure to keep you updated on any further developments in this story. As always, thank you for tuning in and stay with us for unbiased, up-to-the-minute coverage of the stories that matter most. This is Kyla, signing off.

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