Posted on 18 October 2012.
Perhaps the biggest story of recent days was the shock dismissal of the Governor of the Central Bank of Iraq (CBI), Sinan al-Shabibi, and the issuing of arrest warrants for him and many of his staff.
The nature of the allegations against Mr Shabibi are not entirely clear, but appear to center around manipulation of the exchange rate between the Iraqi dinar (IQD) and the US dollar.
Considering the fact that the exchange rate has been managed within a relatively tight range for quite some time, this accusation looks a little strange.
But there has been tension between the Central Bank and the government for years. In January of last year, Nouri al-Maliki secured a court ruling placing the Central Bank under the control of the cabinet, rather than the parliament, much to the displeasure of al-Shabibi.
The latest charges have been brought by Iraq’s Commission on Integrity, whose former head resigned last year, alleging political interference in his inquiries.
Suspicions abound that the Central Bank affair is an attempt by al-Maliki to increase his control of the bank. While we wait for more details to emerge, the international business community will be watching developments closely.
Iraq is a complicated environment, and Upper Quartile and AAIB are the ideal partners to guide your business through the complexities of Iraqi life. For more information please contact Gavin Jones or Adrian Shaw.
Dr. Mark A. DeWeaver
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