TEHRAN (Iran News) – Secretary of Iranian Oil, Gas and Petrochemical Products Exporters’ Union (OPEX) Hamid Hosseini says Iraq’s debt to Iran is more than $5b and Baghdad has to pay its debts if it wants to continue trade with Iran.
Speaking to ILNA, Hosseini reacted to recent actions of the U.S. Federal Reserve for monitoring the dollar-based international exchanges by Iraq’s commercial banks and its impact on trade exchange of this country with Iran and said that currently talking about the impacts and future of trade is too soon and one should wait and see whether the Federal Reserve wants to continue this policy or not.
He added that some $250m was per day transferred to Iraqi banks via the SWIFT system and the amount has currently fallen to some $40m and it has caused devaluation of Iraqi currency dinar as one dollar is traded for 1600 dinars while it was traded 1450dinars before the current Federal Reserve’s decision to monitor the dollar flow in Iraqi banks.
Hosseini said that Federal Reserves’ decision may lead to dissatisfaction and anger of Iraqi people and pressure to the Iraqi government as well as creating anti-Iran climate in Iraq because dollar was transferred to Iran and for this reason the U.S. took such an action.
He admitted so far there was no monitoring for forex exchange in Iraqi banks, adding that in the past Iraq’s daily oil revenues was $250m and the amount has considerably increased to $350m and in the past there was actually no supervision of the forex market.
Hosseini noted that Iraq’s Central Bank has decided to control the flow of the forex market to avoid corruption and money laundering in cooperation with the U.S. Federal Reserves. He said that so far the most important Iraqi bank, which is in charge of international exchanges and exports, is TBI (Trade Bank of Iraq) whose financial management is in the hands of an American who monitored all activities of TBI, adding that it seems the U.S. wants to control all dollar-based activities in Iraq.
He reiterated that the Federal Reserve action will have no impact on Iran-Iraq trade and said that the private sector in Iraq is keen to buy Iranian products and therefore it should resolve this problem and it can pay the money for their purchases in dinar, dirham, yuan, lira or euro and if Iraq cannot pay the money, it will be definitely unable to import goods from Iran and Iran should not involve itself in this issue. He admitted that although some problems will emerge for Iran’s exports to Iraq in short time, the weakening of Turkish lira can have negative impact on exports to Iraq not only from Iran but also from other countries.
Hosseini also said that payment for export of gas and electricity is based on a defined mechanism and Iraq has to supply Iran’s required goods in exchange for gas debts and it is Iraqis’ problem to sort out this problem because Iraq is eager to increase its gas and electricity from Iran and if Baghdad does not observe its obligations, then Iran will have proper reaction.
He urged Iranian traders to be flexible and even get their money in dinar because Iraq’s national currency dinar can be traded in the international markets and this can help Iran to get past this crisis in Iraq.
He then said that Iraq’s debts for gas and electricity exports are more than $5b that had been previously reported.
Hosseini said that currently the payment system in Iraq has faced problem and it is not Iraq only which is involved in this problem and other countries trading with Iraq also are facing this problem, adding that since the U.S. Federal Reserve has reduced transfer of dollar Iraq via SWIFT, Iraq’s dinar has lost its value and demands for dollar bank note have increased and this can create problem for trade exchange with Iraq and currently the U.S. is trying to control the flow of forex in Iraq and Iraqi government should not let the U.S. meddle in trade of Iraqis.