Iraq's Central Bank Suddenly Halts Dollar Cash Withdrawals

Owners of currency exchange companies demonstrated in front of the Central Bank of Iraq (Reuters)
Owners of currency exchange companies demonstrated in front of the Central Bank of Iraq (Reuters)
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Iraq's Central Bank Suddenly Halts Dollar Cash Withdrawals

Owners of currency exchange companies demonstrated in front of the Central Bank of Iraq (Reuters)
Owners of currency exchange companies demonstrated in front of the Central Bank of Iraq (Reuters)

The Central Bank of Iraq (CBI) said it will ban cash withdrawals and transactions in US dollars in a move that surprised markets.

The move aims to stamp out 50 percent of the use of $10 billion that Iraq imports in cash from the New York Federal Reserve each year.

The abrupt decision has sown confusion in the Iraqi financial markets. It is expected to lead to massive withdrawals, as predicted by several Iraqi bankers anticipating a significant wave next Sunday.

The CBI director-general of investment and remittances, Mazen Ahmed, told Reuters that Iraq will ban cash withdrawals and transactions in US dollars as of Jan. 1, 2024.

Ahmed indicated it is a push to curb the misuse of its hard currency reserves in financial crimes and the evasion of sanctions on Iran.

However, an hour after the report, a statement clarified that the ban on cash dollar withdrawals would only apply to accounts receiving transfers from abroad and under no circumstances affect the dollar balances of Iraqi citizens.

Ahmed explained that people who deposit dollars into banks before the end of 2023 will continue to be able to withdraw funds in dollars in 2024.

Refuting expectations that the exchange rate would skyrocket to 1,700, Ahmed emphasized that the CBI was taking steps to reduce the parallel market exchange rate, and there was no indication that the market rate would hit 1,700.

Some signs of frustration with dollar shortages have already begun to emerge.

According to an official statement, the CBI reforms aim to ensure the bank and the broader banking system's compliance with international standards, preventing the dollar from reaching entities prohibited from acquiring it or using it for speculative purposes.

Dozens of Iraqis have reportedly protested outside the CBI headquarters in Baghdad, calling for control over the dollar exchange rate.

Despite governmental measures believed to stabilize the exchange rate, stemming the deterioration in the dinar's value, which stood at 1,550 per dollar as of Thursday, seems challenging.

Demonstrators, including Baghdad-based currency exchange business owners, argue that the failure to stabilize the exchange rate has unsettled the markets and inflated the cost of essential goods.

For months, the CBI has been imposing restrictions on dollar exchanges, responding to the stipulations set by the US Federal Reserve, which observed suspicious activities related to dollar smuggling, according to official data.

Bank officials attribute the dinar's decline to the rising demand for dollars and the proliferation of speculators facing severe penalties.

The exchange rate continues to witness unprecedented surges, with the rate standing at 1,550 per dollar as of Thursday, accompanied by sharp increases in essential goods and services prices.

The crisis began months ago when the CBI announced controls on dollar exchange rates after the US Treasury Department imposed restrictions on 14 Iraqi banks suspected of smuggling dollars abroad.

Recently, the CBI stated that the sanctioned banks have begun adhering to required transparency guidelines, noting that Iraq is considering adopting other currencies to facilitate foreign transfers by opening direct channels.



Gulf States Expand Tourism Footprint as Emerging Markets Gain Momentum at Arabian Travel Market in Dubai

Saudi Arabia’s participation in the Arabian Travel Market (Asharq Al-Awsat) 
Saudi Arabia’s participation in the Arabian Travel Market (Asharq Al-Awsat) 
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Gulf States Expand Tourism Footprint as Emerging Markets Gain Momentum at Arabian Travel Market in Dubai

Saudi Arabia’s participation in the Arabian Travel Market (Asharq Al-Awsat) 
Saudi Arabia’s participation in the Arabian Travel Market (Asharq Al-Awsat) 

Emerging tourism markets are carving out space on the global travel map, drawing attention for their dynamic participation at the Arabian Travel Market (ATM) in Dubai, while Gulf nations—particularly Saudi Arabia and the United Arab Emirates—are accelerating their expansion in the tourism sector.

As global travel gathers momentum, Gulf-based airlines are eyeing new investment opportunities despite lingering global economic uncertainty, driven by shifting trade patterns and evolving consumer behavior in the international travel landscape.

The 32nd edition of ATM opened in Dubai with more than 2,800 exhibitors and nearly 55,000 industry professionals from 166 countries. Held under the theme “Empowering Innovation: Transforming Travel Through Entrepreneurship,” the event emphasized building a more sustainable and globally integrated travel industry.

The exhibition reflects the profound changes shaping global tourism, with cross-border and sustainable connectivity now central to the industry’s development. It also highlights the growing influence of emerging markets and the increasing role of Gulf investments in tourism and aviation.

During its participation in ATM, the Saudi Tourism Authority showcased the Kingdom’s accelerating tourism growth, revealing it had attracted approximately 116 million visitors in 2024—a 6.4% increase from the previous year. Fahd Hamidaddin, the authority’s CEO, said Saudi Arabia aims to strengthen its position as a unique summer destination through a robust calendar of events and strategic private-sector partnerships. The focus is on key source markets across the Middle East, Asia, and Africa.

UAE Tourism Supports Economic Diversification

UAE Minister of Economy and Chairman of the Emirates Tourism Council, Abdulla bin Touq Al Marri, emphasized the country’s growing stature as a global tourism hub. He pointed to the launch of major national initiatives that align with best international practices, support economic diversification, and attract investment in hospitality, aviation, and travel.

According to bin Touq, the UAE’s tourism sector continued to deliver strong performance in 2024. Hotel revenues rose to AED 45 billion (USD 12.2 billion), up 3% from 2023, while occupancy rates reached 78%, among the highest globally. The country added 16 new hotels last year, increasing the total to 1,251, with room capacity growing 3%. Hotel guests rose 9.5% year-on-year to 30.8 million, achieving 77% of the UAE’s 2031 national tourism target seven years ahead of schedule.

Gulf Airlines Gear Up for Growth

Etihad Airways CEO Antonoaldo Neves said the airline has yet to feel any major impact from global trade tensions, with seat occupancy remaining strong despite global uncertainty. Etihad plans to add 20 to 22 aircraft in 2025, with the goal of expanding its fleet to more than 170 aircraft by 2030. Neves also noted that the euro’s recent appreciation could boost European travel to the Gulf.

Etihad, which currently operates a fleet of around 100 aircraft, has significant financial flexibility, with 60% of its fleet debt-free. “If a crisis arises, we can ground planes and save up to 75% of operating costs,” he noted.

The airline plans to receive 10 Airbus A321XLR jets starting in August, in addition to 6 Airbus A350s and 4 Boeing 787s. Neves said while delays in aircraft delivery remain a challenge, they have not altered Etihad’s growth strategy. He also confirmed ongoing discussions with manufacturers and signaled interest in Boeing aircraft originally designated for China but now potentially available due to trade restrictions.

Riyadh Air Nears Major Aircraft Deal

Tony Douglas, CEO of Saudi Arabia’s Riyadh Air, said the new airline is open to acquiring Boeing jets initially built for the Chinese market if trade disputes disrupt those deliveries.

Douglas said global economic headwinds have not affected demand and announced plans to finalize a major widebody aircraft deal soon. The airline aims to expand its workforce to around 1,000 employees in the coming year, as it prepares to begin operations in the fourth quarter of 2025.

Commenting on broader regional developments, Douglas said the resumption of flights from the UAE to Syria and the use of Syrian airspace “may be an early sign that conditions are improving.”