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Iraq Decides to Stop Using US Dollar in Foreign Trade
In a bid to confront the United States domination in the world economy, the Iraqi government has made a major policy shift to replace the US dollar with the euro or any other currency in its business dealings.
The cabinet has decided to stop "trading, selling and purchasing with the dollar" and replace it with the euro or any other currency, Iraqi Finance Minister Hikmet Mizban Ibrahim said in a statement carried by the official Iraqi News Agency (INA) on Tuesday.
The decision was adopted at the 38th cabinet meeting, chaired by President Saddam Hussein, on Monday evening.
"The US dollar is one of the levers of our enemy's influence and power on both regional and international levels," the statement said.
It called upon world states to follow the suit, and accused the United States, in collaboration with the Zionist (Israel), of designing policies "to harm the world people and jeopardize their independence."
However, it remains to be seen how the policy will be put into practice, as the greenback is now the sole choice of foreign currency in the sanctions-hit country.
Ever since the Arab Baath Socialist Party came into power in Iraq in 1968, Iraq's foreign reserves and overseas transactions have all been done in US dollar.
As the Iraqi government has decided to dump the dollar, the most likely currency choice will be the euro, officially launched on January 1, 1999 by the European Union (EU) as a counter-balance to the dollar in the world financial market as well as in the world economy.
But is has been a clear fact that the euro has fallen steadily against the dollar since its inception.
The euro has been relatively weak in recent months, compared with the strong dollar behind the growingly strong US economy.
The latest exchange rate between the euro and dollar was 1:0.86, some 30 percent depreciation compared with the glorious figure of 1:1.18 when the European single currency was born.
An Iraqi cabinet meeting held on September 14 made the decision to appoint a group of financial experts to study the possibility of replacing the dollar with another "politically correct" currency as termed by Iraqi officials.
Ever since the announcement of the government decision, the weak Iraqi dinar has somewhat recovered its value, as the staggering exchange rate between the dollar and the Iraqi dinar has fallen from 1:2100 to 1:1900.
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