Iraq's Central Bank Sees Surge in Foreign Exchange Auction Sales

Iraq's Central Bank sells $253 million in foreign exchange auction, a 92% increase, with most sales transferred abroad. The bank's daily average sales reach $279 million over five days, with 50 exchange companies participating.

author-image
Aqsa Younas Rana
New Update
Iraq's Central Bank Sees Surge in Foreign Exchange Auction Sales

Iraq's Central Bank Sees Surge in Foreign Exchange Auction Sales

The Central Bank of Iraq (CBI) witnessed a significant 92% increase in its million foreign exchange auction on Sunday, selling a total of $253 million. This surge in sales comes as part of a broader trend over the past week, with the CBI selling $1.395 billion in hard currency, primarily US dollars.

The CBI's currency auctions aim to finance foreign trade, with sales going towards cash transactions and transfers abroad. The exchange rate for documentary credits, international settlements of electronic cards, and foreign transfers was set at 1,310 Iraqi dinars per dollar, while the exchange rate for cash transactions was slightly lower at 1,305 dinars per dollar.

Why this matters: This significant increase in foreign exchange auction sales indicates a strong demand for US dollars in Iraq, which could have implications for the country's economic stability and its ability to manage its foreign currency reserves. Moreover, the efficiency of the CBI's foreign exchange market plays a crucial role in supporting Iraq's financial system and fostering economic growth.

Over the five-day auction period, the daily average sales reached $279,005,101, with the highest sales of $283,620,620 recorded on Monday and the lowest sales of $275,539,423 on Wednesday. Foreign exchange sales, which primarily consist of transfers abroad, amounted to $1,313,685,507, marking a substantial 94% increase compared to cash sales of $81,340,000.

The majority of the dollar sales, amounting to $253,903,802, went towards bolstering balances abroad in the form of remittances and credits. This represents a 92% increase from the cash sales, which totaled $20,376,996. Four banks purchased cash dollars, while 15 banks met requests to boost balances abroad. A total of 50 exchange and intermediary companies participated in the auction.

The significant increase in foreign exchange auction sales indicates a strong demand for US dollars in Iraq, with most of the sales being transferred abroad. This development highlights the importance of the CBI's role in managing the country's foreign currency reserves and facilitating international trade transactions. As Iraq continues to navigate its economic challenges, the stability and efficiency of its foreign exchange market remain crucial factors in supporting the nation's financial system and fostering economic growth.

Key Takeaways

  • CBI sells $253 million in foreign exchange auction, a 92% increase.
  • $1.395 billion in hard currency sold over the past week, primarily US dollars.
  • Exchange rate set at 1,310 Iraqi dinars per dollar for documentary credits.
  • Foreign exchange sales up 94% compared to cash sales.
  • $253.9 million in dollar sales went towards bolstering balances abroad.