ERBIL, Kurdistan Region - An official from the Central Bank of Iraq (CBI) said on Wednesday that the bank is not responsible for the widening gap between the official dollar exchange rate and the market rate, attributing the discrepancy to new customs measures and demand for unofficial trade financing.
Alaa al-Fahd, the media official for the CBI, told Rudaw that the current discrepancy in exchange rates "is a result of new measures taken due to the implementation of the ASYCUDA [the Automatic System for Customs Data] system in customs tariffs," adding that most traders "have turned to the unofficial market to finance trade that is not official in order to evade taxes and customs.”
The electronic automation ASYCUDA system was developed by the United Nations Conference on Trade and Development (UNCTAD) in the early 1980s and now covers all 22 of Iraq’s federal border crossings, including key ports in southern Iraq.
The system, which is used to standardize and digitize customs processes, has been introduced in Iraq as part of broader reforms aimed at increasing transparency and improving revenue collection.
However, according to the CBI, the transition has also pushed some traders to seek foreign currency outside official banking channels.
“The Central Bank has attempted to bring all traders, even small-scale ones, into the official market and to conduct the financing of foreign trade through international banks,” Fahd said.
The Iraqi dinar has been under sustained pressure in recent months. As of Wednesday, the exchange rate in the parallel market stood at 1,530 dinars per US dollar, significantly weaker than the official rate of 1,320 dinars.
Fahd stressed that the Central Bank should not be held accountable for the higher market rate “because it is related to financing demands for trade that is not official.