Iraq trade with China: To increase access to foreign currency, Iraq’s central bank announced on Wednesday that it intended to permit commerce with China to be settled directly in yuan for the first time.
The cabinet approved a currency revaluation earlier this month after the central bank took quick action to address a shortfall of dollars in the local markets.
On Wednesday, Reuters reported that Mudhir Salih, the government’s economic adviser, announced that they will finance imports from China in yuan for the first time, instead of using (U.S.) dollars.
As China gradually opens up its financial markets and some nations try to diversify their currency exposures, the move is the most recent indication of the yuan’s expanding influence on the global arena.
According to a statement, the central bank may increase the balances in yuan in the accounts of Iraqi banks that have Chinese banks as part of its plan.
Another choice, it continued, would be to use the central bank’s accounts with JP Morgan and the Development Bank of Singapore (DBS) to increase the balances of local banks.
However, The first option would rely on the yuan reserves of the central bank, whilst the second would utilize the bank’s dollar holdings at JP Morgan and DBS. Salih stated that the two banks would exchange the dollars for yuan and pay the intended recipient in China.