Once again, the Central Bank grants Jordanian banks licenses to deal in dollars and restrict foreign transfers to them, which economists see as a “big mistake” that will contribute to losing control over the banking system, which will remain in the hands of the Americans and Jordanian banks, warning against exploiting this file politically in the future.
An informed source revealed, during an interview with Al Aalem Al Jadeed, that “the Central Bank of Iraq granted during the current period 4 new licenses to Jordanian banks, which are Al-Ittihad, Housing, Jordan, and Arab-Jordanian.”
He adds, “The Jordanian Capital Bank and the Cairo Amman Bank strengthened their control over the National Bank of Iraq, by acquiring 66 percent of the bank’s shares, and this is a very major violation of the Iraqi Investment Law, which limits foreign ownership to 49 percent of any Iraqi company,” revealing that “The Jordanian Housing Bank also recently began acquiring shares of the Iraqi Al-Mansour Bank, which is controlled by Qatar National Bank, by 54 percent.”
He points out that “Iraq has had a bad experience with entering foreign banks, as it previously entered Iranian banks, all of which were stopped due to sanctions, and also entered Lebanese banks that declared bankruptcy and seized Iraqi deposits estimated at 20 billion dollars.”
Since the US Treasury imposed sanctions on Iraqi banks, as a result of dollar smuggling to Iran, foreign banks have dominated the financial arena, as an Arab bank controlled a large percentage of dollar sales in Iraq.
Foreign parties hold 77% of the ownership of the National Bank of Iraq, which controlled a third of foreign currency sales, which is considered the main source of the Iraqi economy. This bank is owned by Arab parties, namely the Jordanian Capital Bank, the Cairo Amman Bank, and the Palestine Telecommunications Company.
For his part, the expert in banking affairs, Ahmed Al-Tamimi, believes, during an interview with Al Aalem Al Jadeed, that “the Central Bank of Iraq made a big mistake when it worked to hand over to Jordanian banks the dollars owned in Iraq, and restricted dealing with foreign transfers through those banks at the beginning of next year according to the directives of US Treasury.
Al-Tamimi explains that “dealings in dollars by Iraqi banks will be non-existent during the new year, and the matter will be limited to the Iraqi Trade Bank and Jordanian banks. This means that all Iraqi banks will be prohibited from any dealings in dollars, which gives Jordanian banks precedence at the expense of the Iraqi banking system.”
The expert in banking affairs continues, “The Central Bank of Iraq must negotiate urgently and before the end of the current year in order to reach an understanding with the US Treasury to grant exceptions to some Iraqi banks, and not limit dollar dealings to Jordanian banks, under the pretext that Iraqi banks do not have accounts in international correspondent banks.”
Al-Tamimi warns that “according to this American decision, the Central Bank of Iraq will lose control over the banking system, and the system will remain managed by the Americans and Jordanian banks, and this file may be exploited politically in the future by the Americans or even the Jordanians, because foreign transfers will be exclusively in their hands, and Iraq has no nothing to do with it, except for supervision and follow-up.”
The number of banks in Iraq reached 81, while the branches of foreign banks in Iraq reached 21, most of which are from Turkey, Jordan, Iran and the Emirates.
The Central Bank of Iraq pumps dollars to banks through the currency selling window, which it says has several functions, the first of which is achieving stability in the exchange rate and the second is meeting the requirements of foreign trade, because “the Iraqi commodity sector is unable to provide the requirements of the local market,” according to the bank, which indicated that “The window meets 87% of Iraq’s merchandise import requirements.”
For his part, the economic expert, Mustafa Akram Hantoush, stated during an interview with “Al Aalem Al Jadeed” that “the Central Bank of Iraq is required today to reveal the list of dollar sales on the platform that it supervises, so that the Iraqi people can be informed of the banks that hold the dollar.”
He points out that “the Central Bank of Iraq, instead of strengthening the work of Iraqi banks, went towards supporting foreign banks, namely the Jordanian ones, which swallowed up the Iraqi banks and confused the market,” pointing out that “Jordanian banks will control 95 percent of the market compared to 5 percent for the Iraqi banks, and this is an unfair competition.”
Hantoush concludes, “There is a major campaign undertaken by Jordanian banks to acquire human resources in Iraqi banks, and this is due to the policy of the Central Bank.”
The United States intervened in the movement of the dollar in Iraq to limit its smuggling, and more than once imposed sanctions on private Iraqi banks and removed them from the currency window, which led to a decline in the Central Bank’s sales. The Central Bank also took several measures and opened an electronic window for merchants.
In the middle of last month, the Governor of the Central Bank, Ali Al-Alaq, revealed meetings with the US Treasury to reconsider the sanctions on Iraqi banks, pointing out that these sanctions should not be issued in the future except after discussing and informing the Central Bank of Iraq, as it is concerned with monitoring their activity.
In this context, economic researcher Ahmed Abd Rabbo, during an interview with Al Aalem Al Jadeed, calls for “the resignation or dismissal of the governor of the Central Bank due to his inability to control the banking file and monetary policy. The gap between the official rate and the parallel rate of the dollar has reached 11%, which is “It is very large and has been going on for a year, in addition to the fact that Jordanian banks account for the largest proportion of foreign trade financing, and benefit from the difference in the price of the dollar in the parallel market.”
Abd Rabbo points out that “the Iraqi banking sector is facing collapse, and the Central Bank must stop this matter by achieving fair competition between Iraqi and foreign banks.”
The Parliamentary Finance Committee had previously confirmed that changing the current governor of the Central Bank, Ali Mohsen Al-Alaq, had become an urgent necessity due to his failure to manage the bank, the way he dealt with the dollar file and his failure to take any real reaction to the sanctions imposed on a large group of Iraqi banks which affected the dollar prices inside Iraq.
