Ain’t Nothing Going On But The Rent: How ISIS Rigs Mosul’s Money Markets In Their Favour
In Mosul, there are no official banks anymore.So the Islamic State makes the rules: No high interest rates and exchange rates that work in their favour. The latter means that, ironically, the US dollar is king here.
There is one American who is particularly welcome on the streets of the extremist-run, northern Iraqi city of Mosul. And his name is Benjamin Franklin – the face of this particular founding father is on the US$100 bill. Because strangely enough for a group that declared itself an independent Islamic state in the middle of Iraq, US dollars play a vital role in the “state’s” funding and monetary policy, a policy they’ve invented that means they get to make more money from things like currency exchange.
What the extremists call Bayt Al Mal, or the House of Money in English, acts as a kind of ministry of finance for the territory that the Islamic State, or IS, group controls.
In Mosul, rules made up at the Bayt Al Mal govern the way that money traders and exchange merchants in the city can do business. These kinds of exchange shops were common before the Islamic State arrived here – they can be found in most other Iraqi cities too and make up a kind of informal banking network, combining currency exchange and money transfers. After state and private banks stopped operating in Mosul when the IS group took the city over almost two years ago, the exchange shops became the only form of banking available to locals.
The IS group has established its own exchange shops to compete with longer-established businesses in Mosul and locals say the extremists have also had private individuals open exchange shops, even though these are controlled by, and benefit, the IS group. It’s their way of controlling the money market. And even if the shops are not being run directly by the IS group, they must operate under strict regulations.