Central Bank of Iraq to Restrict Dollar Transactions for Selected Institutions
Overview of Restrictions
The Central Bank of Iraq has announced its decision to prohibit five local banks from engaging in transactions involving U.S. dollars. This action is in response to a directive from the U.S. Treasury, resulting from significant infractions related to cash regulations and concerns surrounding the smuggling of dollars outside of Iraq.
Impacted Entities
In conjunction with the restrictions on local banks, three payment companies will also face a ban on conducting dollar transactions. These measures highlight a proactive approach by Iraqi authorities to strengthen the integrity of its financial system amidst heightened scrutiny from international financial regulators.
Rationale for Actions
The U.S. government submitted this request due to alarming violations observed within the cash operations of these institutions. The aim is to curb the illicit flow of dollars, which poses a potential threat to the stability of both Iraq’s economy and international financial relations.
These restrictions reflect ongoing efforts to enhance transparency and compliance within Iraq’s banking sector, reinforcing the need for adherence to international financial regulations.
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