RIYADH: Consumers in Iraq are likely to benefit from competitive prices of goods as the Middle Eastern country mulls the establishment of a free zone.
This special economic entity will serve as a hub to import materials and goods, subsequently selling them to the private sector in the local currency, reported the National Iraqi News Agency.
This announcement came amid a package of measures to address the difference in the exchange rate.
The state-run news agency said Iraqi Prime Minister Mohammed Shia Al-Sudani has urged the Commerce Ministry to import essential materials and provide them in Iraqi dinars at stable prices.
Further measures discussed include the government exploring the possibility of a re-export project.
Additionally, Iraq intends to organize the import process while ensuring the entry of the largest number of merchants and importers to the foreign currency sales window.
The government plans to achieve this by facilitating account opening procedures, deposit operations and other processes related to issuing the importer’s identity.
Moreover, the government and the central bank are conducting ongoing negotiations with the Iranian side to regulate trade between the two countries and consider the best options for payment of dues and amounts.
The government has issued a series of measures to advance electronic payment systems and reduce dependence on cash.
Soon, it will also decide on pricing and incentive policies for services provided through electronic payments.
Iraq is also considering a series of measures to combat the exchange rate difference.
Last month, Iraq announced that it would ban cash withdrawals and transactions in US dollars as of Jan. 1, 2024, in the latest push to curb the misuse of its hard currency reserves in financial crimes and the evasion of US sanctions on Iran.
The move aims to stamp out the illicit use of some 50 percent of the $10 billion that Iraq imports in cash from the New York Federal Reserve each year, Mazen Ahmed, director general of investment and remittances at the Central Bank of Iraq, told Reuters at the time.
Ahmed added that it is also part of a broader push to de-dollarize an economy that has seen the greenback preferred over local notes by a population weary of recurring wars and crises following the 2003 US invasion.
