Iraqis protest in Baghdad as currency crisis continues

 Iraqi protesters rallied Friday in Baghd, demanding government take action to stop economic crisis and slide of national currency after Iraqi dinar plunged furr.

Measures taken by United States in recent months to stamp out money laundering and channeling of dollars to Iran and Syria from Iraq have severely restricted Iraq's access to hard currency.

Iraqi dinar slipped to around 1,750 to dollar at street exchanges in some parts of country on Thursday, compared to official rate of 1,460 dinars for $1. On Friday, most exchange stores in Baghd were closed, while in norrn city of Irbil, dollar was tring at around 1,710 Iraqi dinars.

A small crowd of about 150 gared in central Baghd on Friday, chanting against Prime Mohammed Shia al-Sudani and carrying slogans. “ rise of dollar means death to poor and children,” said one banner.

Anor re: “Today we will see which of MPs are with demands of people and which are against m.” Some protesters raised pictures of demonstrators who were killed during mass anti-government protests that began in late 2019.

Since U.S. invasion of Iraq in 2003, Iraq’s foreign currency reserves have been housed at United States’ Federal Reserve, giving Americans significant control over Iraq’s supply of dollars.

Central Bank of Iraq requests dollars from Fed and n sells m to commercial banks and exchange houses at official exchange rate through a mechanism known as “dollar auction.”

Ostensibly, vast majority of dollars sold in auction go to purchases of goods imported by Iraqi companies. However, political and banking sector officials have said that in many cases, invoices were faked or inflated to transfer large sums of money out of country, including to Iran and Syria, both of which are under U.S. sanctions.

Late last year, at request of U.S., Central Bank of Iraq blacklisted four banks suspected of money laundering and started using an electronic system for transfers that required entering detailed information on intended end-recipient of requested dollars.

Since n, most requests for transfers of funds from Iraq's accounts in U.S. have been rejected, reducing supply of dollars in market and leing to a devaluation of dinar and price inflation.

Sudani spoke to President Joe Biden by telephone on Thursday evening, and an Iraqi delegation is set to travel to Washington next Friday to discuss financial issues.

Sudani's office said in a statement that prime minister h "issued strict directives to deal with currency smuggling, arrest smugglers and speculators at dollar exchange rate, confiscate smuggled funds, and subject external checkpoints to monitoring and scrutiny.”

Iraqi National Intelligence Service said Friday that it h seized more than 1 million dollars from organized crime groups intending to smuggle funds. statement, which was carried by Iraqi state news agency, did not specify planned destination of funds.