A senior official from the Central Bank of Iraq has announced a significant policy change set to take effect on January 1st, 2024. Iraq will implement a ban on cash withdrawals and transactions in US dollars. This decision aims to curtail the illicit use of approximately 50 percent of the $10 billion in cash that Iraq imports annually from the Federal Reserve.
Dr. Ali Kanaan, a Professor at the Faculty of Economics at Damascus University, has weighed in on the implications of this decision. He asserts that the private sector will now be required to conduct transactions in Iraqi dinars, equivalent to the amount in US dollars, for non-Iraqi foreign workers. This shift is expected to decrease the presence of foreign labour in Iraq and adversely impact workers, particularly Syrians in Iraq, who may encounter difficulties with currency exchange and remittances.
Regarding the effect of this decision on foreign remittances from Iraq to Syria, Dr. Kanaan predicts a potential decrease of up to 40 percent. He anticipates that this policy may prompt Syrian labourers to seek better opportunities elsewhere, leading to displacement. Dr. Kanaan emphasizes that while the decision has monetary implications, it also carries a political dimension. It appears to be a measure aimed at reducing the number of foreign workers in Iraq, seemingly unrelated to combatting inflation. This decision is seen as unjust to Syrians and contradictory to international agreements between the two countries that seek to protect the rights of Syrian workers.
Dr. Kanaan calls upon the Syrian Foreign Ministry to formally request a reversal of this decision. He argues that it violates various agreements signed between Iraq and Syria, including those related to tax payments, profit transfers, investment protection, job security for Syrian workers, and overall stability in their working conditions.
It’s worth noting that in July, the United States imposed restrictions on 14 Iraqi banks, preventing them from conducting dollar transactions, as part of a broader effort to combat the illicit use of the dollar.
This article was translated and edited by The Syrian Observer. The Syrian Observer has not verified the content of this story. Responsibility for the information and views set out in this article lies entirely with the author.