Iraq Deplores ‘Currency Attack’ as Dollars Flow to Syria, Iran - Bloomberg
Iraq’s central bank said it’s under a “currency attack” as traders buy U.S. dollars in daily auctions and resell them on the black market in Syria and Iran, which face hard currency shortages due to sanctions.
Demand for the greenback at the central bank auctions has risen since November to about $200 million to $300 million a day, compared with about $160 million in the prior 12 months, the deputy central bank governor, Mudher Salih, said in an interview in Baghdad Jan. 10.
“Now we are checking the applications to buy dollars from the auctions more closely. We are afraid that some of it may be related to money laundering,” Salih said. “We are now under a currency attack because of the regional situation.”
Iranians are having trouble accessing foreign currencies due to the rial’s plunge, U.S. Treasury Undersecretary David Cohen said Dec. 1. The Iranian currency weakened this year after the U.S. and allies prepared for further sanctions that may include an oil embargo, the state-run Mehr news agency reported on Jan. 2. The allies accuse Iran of a covert plan to build nuclear weapons, a charge Iran’s government denies.
Syria, Iran’s regional ally, has also come under greater U.S., European and some Arab sanctions over a violent crackdown on pro-reform protests that began early last year. A European oil embargo is affecting Syria’s revenues and giving the state far less access to foreign exchange, David Butter, regional head for the Middle East at the Economist Intelligence Unit, said Dec. 14.