Banking Regulation Update: Iraqi Bank for Trade Suspends Cash Withdrawals Outside Iraq
In a significant move to address currency control, Ahmed Abd Rabu, a specialist in banking and financial affairs, discussed the cessation of cash withdrawals from ATMs abroad by the Iraqi Bank for Trade. This decision, communicated on February 28, 2025, has raised pertinent questions regarding its underlying motives.
Currency Smuggling Concerns
Abd Rabu indicated that this policy change is likely linked to the Iraqi government’s ongoing efforts to combat currency smuggling. The Central Bank of Iraq and other financial authorities have already implemented measures to restrict the exit of US dollars via informal channels. He elaborated that certain entities had been utilizing electronic payment cards to withdraw cash internationally using funds acquired at the official exchange rates within Iraq, subsequently selling these amounts at inflated prices in the parallel market. This practice constitutes a form of currency smuggling.
Implications of U.S. Pressure
Furthermore, Abd Rabu expressed concern that this decision might have stemmed from increased American pressure aimed at monitoring dollar flows and containing potential smuggling operations into countries subject to U.S. sanctions, such as Iran. The U.S. has historically imposed stringent restrictions on Iraqi banks and urged the Central Bank to implement rigorous measures to regulate financial transfers. This recent attention arose following documented incidents of currency smuggling facilitated through electronic payment cards.
Strategy for Banking Control
Abd Rabu posited that the suspension of cash withdrawals represents part of a broader strategy to regulate the banking sector effectively and curtail the misuse of US dollars. This initiative appears to be an extension of pre-existing measures by the Central Bank, aimed either at countering U.S. pressure or strengthening efforts to prevent financial corruption and smuggling.
Announcement Details
On Wednesday, the Iraqi Bank for Trade officially announced the halt of cash withdrawal services through ATM systems outside Iraq. This decision stems from concerns regarding the misuse of electronic cards, specifically Visa and MasterCard. According to bank representatives, the aim is to mitigate these risks while allowing for card usage in point-of-sale (POS) and online transactions.
In summary, the Iraqi Bank for Trade’s decision to suspend cash withdrawals abroad signifies a critical step in addressing ongoing challenges related to currency management and aligns with broader regulatory goals aimed at strengthening the integrity of Iraq’s financial systems.