A group of 14 private Iraqi banks sanctioned by the US Treasury Department warned of "negative consequences" by depriving them of dealing in dollars.
The 14 banks have been banned from undertaking dollar transactions but can continue to use Iraqi dinars and other foreign currencies.
The sanctioned banks said in a joint statement that they deal in dollars with the Central Bank, under the supervision of the US Federal Reserve, and will apply the best auditing standards and investigation of financial transactions.
They said they were ready to challenge the measures and face audits through the Central Bank or an international auditing firm, asserting they'd take full responsibility for any violations if committed.
The statement noted that depriving about a third of Iraqi private banks of dealing in dollars will have negative consequences, not only on the value of the Iraqi dinar against the US dollar, but it will have a significant impact on foreign investments.
They called on the Iraqi government to take all measures to solve this problem and bear the losses they incurred and the banking sector in general.
The United States uncovered information that the Iraqi banks engaged in money laundering and fraudulent transactions, some of which may have involved sanctioned individuals, and raised concerns that Iran could benefit.
An economics professor at al-Basra University, Nabil al-Marsoumi, issued Wednesday data on the number of private banks in Iraq, saying they exceed that of countries such as Britain which has 54 banks only.
Marsoumi reported that the total number of banks in Iraq is 81, including 74 private banks, saying the ratio of public to private banks is the highest in the Middle East, with 43 in Turkey, 41 in Egypt, 31 in Saudi Arabia, 30 in Iran, 26 in Jordan, and 20 in Algeria.
Iraq has 29 Islamic banks, constituting more than a third of the banks in the country, said the expert.
Marsoumi hinted that political groups and parties control most banks.
Meanwhile, dozens demonstrated in front of the Central Bank in Baghdad to protest the sharp decline in the exchange rates of the Iraqi dinar against foreign currencies and chanted against the governor and some political parties and figures, accusing them of manipulating the exchange rates.
The Iraqi dinar reached 1,600 per US dollar in the local markets, compared to an official exchange rate of 1,320 dinars.
Furthermore, independent MP Hadi al-Salami officially requested the dismissal of the governor of the Central Bank, Ali al-Alaq.
