Currency Auctions by Iraq Bank Called Into Question
The Central Bank of Iraq’s practice of auctioning US dollars has come under fire amid suspicion that the practice leads to money laundering and the channeling of dollars to Iran, reports Omar al-Shaher.
According to experts, the hard-currency auction governed by the Central Bank of Iraq (CBI) — the authority in charge of implementing monetary policy in the country — has ushered in the formation of financial groups, in which board members of Iraqi private banks are investing.
Every day since 2004, the CBI has held an auction through which hard currency is sold to banks, companies and traders in exchange for evidence of import and transaction receipts. The auctions aim to prevent market speculation and stabilize the exchange rate of Iraqi dinars to the US dollar. The CBI — which does not deal with individuals — sells $1 for 1,118 Iraqi dinars.
