2023-07-20 12:15:00
Washington: The United States has blacklisted 14 Iraqi banks. The ban is intended to prevent corruption and the smuggling of dollars into Iraq. The U.S. Treasury Department and the New York Federal Reserve Bank imposed the ban on Wednesday, the Wall Street Journal reported.
According to the report, the ban has been imposed following the detection of money laundering and fake transactions. Washington’s ban is part of a crackdown on counterfeit US dollar transactions in Iraq.
The U.S. Federal Reserve has tightened checks on the source of foreign currency used to buy dollars at daily currency auctions in Iraq. The US dollar is Iraq’s second currency. The government keeps them at the Federal Reserve Bank of New York.
The Central Bank of Iraq requests dollars from the Fed to convert them into dinars. These are then sold through daily dollar auctions to private banks and financial institutions such as currency exchanges.
U.S. officials say Iraq is rigging the auction to get more currency. Officials also believe that dollars are bought at fixed rates and sold on the streets at higher rates.
Last year, an average of $200 million was sold through auctions to private banks and companies.
But they fell sharply in the last two months of last year as the US stepped up inspections. By the end of December, they had fallen to an average of 56 million.
The restrictions led to the depreciation of the dinar. This also led to an increase in the prices of imported goods. The currency crisis led to protests across the country.
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