MON 20 - 11 - 2017
Date: Nov 10, 2017
Source: The Daily Star
Iraq central bank orders Kurdistan lenders to close
BAGHDAD/LONDON: Iraq’s central bank has ordered private banks to close branches in the Kurdistan region within a week to avoid a ban on dollar sales, Iraqi banking sources said Thursday.

Kurdistan has meanwhile made its full monthly payment of around $100 million to oil producers working on its territory, despite a big drop in oil exports amid a political crisis roiling the semiautonomous region.

The central bank’s deadline expires on Nov. 14 and all banks must report back with confirmation they have closed their branches to avoid penalties, the sources said.

The new measures are part of financial restrictions imposed by Baghdad in retaliation for a Kurdish referendum held on Sept. 25, in which the region voted overwhelmingly for independence.

Iraqi banking sources said the new measures are intended to control the flow of hard currency into the Kurdish region.

“The central bank seeks to reorganize relations with the Kurdistan regional banking industry,” said a government financial adviser who is close to central bank policy. Central bank sources said a decision in October to stop selling dollars to four leading Kurdish banks was still effective.

Separately, a source close to the Kurdistan Regional Government told Reuters that full monthly payments had been made to oil producers such as Genel, DNO, Gulf Keystone, Gazprom and Taqa. The news will be a relief to producers, who had been used to years of non-payments by Kurdistan until the region ramped up exports last year and promised to switch to timely payments on the back of large loans it obtained from oil buyers.

Kurdistan has presold a large part of its future oil output to trading houses such as Vitol, Glencore, Petraco and Trafigura as well as Russian state oil major Rosneft in exchange for $4 billion in loans guaranteed by exports. The export-backed loans allowed the region to cover some old debts and avoid a budget crisis.

Readers Comments (0)
Add your comment

Enter the security code below*

 Can't read this? Try Another.
Related News
Iraqi forces recapture last Daesh-held town
No Iraqi region can secede, top court rules
Iraq plans to cut Kurdistan share in 2018 federal budget
Clashes at Kurdish Parliament as Barzani steps down
UN pushes Iraq, Kurds to hold talks
Related Articles
Is Massoud Barzani stepping down or stepping up?
The dilemma of KRG trade routes
Unfortunate consequences for Kurdistan in Kirkuk
The who, where and when of secession
The troubling ethnic dimensions of the Kurdistan referendum
Editor In Chief & Webmaster : Nazih Darwish
Copyright 2017 . All rights reserved