Bank owners and citizens protest deterioration of the Iraqi dinar following US ban on Iraqi banks

Over the past two days, the market rate of the dollar jumped from 1470 dinar per dollar to 1570 dinar per dollar.

AP 2023/07/26 19:11

Security forces stand guard during a demonstration in front of the Iraqi central bank as currency plummets against the U.S. dollar, in Baghdad, July 26, 2023. (Hadi Mizban/ AP)

Iraq Central Bank of Iraq Iraqi dinar US Treasury Department US dollar

IRBIL, Iraq (AP) — Dozens of people protested in front of the Central Bank of Iraq in Baghdad and bank owners called for official action to stem a sharp increase in the dollar exchange rate Wednesday, after the United States blacklisted 14 Iraqi banks.

Over the past two days, the market rate of the dollar jumped from 1470 dinar per dollar to 1570 dinar per dollar. The jump came after the United States listed 14 Iraqi private banks among the banks that are banned from dealing with U.S. dollar due to suspicions of money laundering and funneling funds to Iran.

The ban was imposed on July 19 by the U.S. Treasury Department and the Federal Reserve Bank of New York and was first reported by the Wall Street Journal.

“The listing of almost one third of the private banks as banned from dealing with the U.S. dollar will have negative consequences from many perspectives," Haidar al Shamaa, owner of a private bank in Baghdad said at a news conference Wednesday.

He called on "the brothers at the Iraqi government to work... to undo the damage which occurred to us specifically, and to the Iraqi banking section in general.”

Protesters organized by a group calling itself Thuwar Tishreen (October Revolutionaries), which is connected to a movement that started mass protests in Iraq 2021, also demanded that the government take action to halt inflation.

On Sunday, the Iraqi Prime Minister Mohammed Shia al Sudani met with Mahdi al Alaq, governor of the Central Bank of Iraq and discussed measures to stabilize the dinar price against the dollar.

A similar dive in the value of the dinar took place earlier this year after measures taken by the United States late last year to stamp out money laundering and the channeling of dollars to Iran and Syria from Iraq severely restricted Iraq’s access to hard currency.