BASRA, Dec 17 (AFP): In Iraq's southern city of Basra, Al-Harith Hassan has been struggling to withdraw his salary in dollars for months as the government tries to curb the country's addiction to US currency.
"When we go to withdraw our salary, they only give us a fraction of it, in instalments," said Hassan, who is paid in dollars for his oil field logistics job.
Oil-rich Iraq is hardly short of dollars-it has foreign currency reserves of more than $100 billion (93 billion euros). But in its fight against a booming currency black market, Baghdad has imposed ever-tighter restrictions on the use of American bucks. For people like Hassan, this can mean a severe cut in his earnings.
He used to withdraw his money and change it at semi-tolerated exchange shops for rates up to 1,600 dinars per dollar.
But increasingly, he says he can only withdraw his cash in dinars at the official rate of 1,320 dinars per dollar. The banks and central bank have traded blame for who is imposing the new restrictions.
"This is a problem. It means that our salary is losing 20 per cent of its value," said Hassan.
More restrictions are coming as the government tries to stop dollars dominating the economy.
From January, Iraq's central bank will require every commercial transaction to be made in dinars. Existing US currency deposits will still be accessible in dollars, but new money wired from abroad will only be available in dinars, at the official rate.
One of the main factors feeding the demand for foreign currencies in Iraq is "the smuggling of US dollars to countries and entities facing US sanctions.
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