On Wednesday, July 26, scores of Iraqis protested in front of the country’s central bank in the capital Baghdad following a massive fall in the value of the Iraqi dinar that is attributed to the recent US ban on 14 private banks. The market rate of the Iraqi dinar in exchange for one US dollar has climbed up to 1,570 from 1,470 in the last two days.
The US Treasury Department and the Federal Reserve imposed the bans this month, accusing the banks of money laundering and transferring funds to Iran. The banks insist that they “have nothing to do with political tensions and are independent financial institutions” willing to face an audit to dispel any notion of wrongdoing or criminal activity.
Reports noted that the protests were organized by the Thuwar Tishreen (October Revolutionaries) group, which had launched massive nationwide protests in 2021 against the dire economic situation in the country that later resulted in the downfall of the government.
The fall in currency value has worsened the chronic economic problems faced by the Iraqis who are seeing high inflation and a decline in the value of their savings.
The 14 private banks which have been banned issued a joint statement urging the government to take steps to resolve the issue. As per their statement, if the government fails to find a solution, one-third of Iraqi private banks would be prevented from trading in the US dollar, which in the long term would also adversely affect foreign investment in the country. Eight other private Iraqi banks had previously been banned by the US, taking the total number to 22, out of a total of 72 private banks operating in Iraq.
