Baghdad:An economist has raised concerns over the Central Bank of Iraq’s recent decision to increase the traveler’s dollar quota from two thousand to three thousand dollars, highlighting potential risks to the country’s cash reserves.

According to National Iraqi News Agency, economic expert Ziad Al-Hashemi criticized the move, suggesting it could lead to the depletion of monetary reserves without addressing the underlying causes of the high demand for foreign currency in the parallel market.

Al-Hashemi expressed his concerns on social media, noting that this decision reverses a previous reduction in the traveler’s dollar quota by the Central Bank. He indicated that the increase might be intended to inject more cash dollars into the parallel market to reduce the price gap between official and parallel exchange rates. However, he warned that this measure might only temporarily bridge the price difference and would not sufficiently meet the ongoing demand for dollars in the parallel market, potentially leading to higher exchange rates due to increased demand or geopolitical factors.

Furthermore, Al-Hashemi criticized the focus on mitigating the effects of the dollar crisis rather than addressing its fundamental causes. He advocated for expanding facilities for foreign transfers to traders to channel some demand for dollars through official routes, rather than relying on depleting cash reserves.

He predicted that the decision would result in a significant drain on dollar reserves, leading to only a short-lived reduction in the parallel exchange rate. Al-Hashemi underscored the need to address the root causes of the elevated demand for dollars outside official channels to rectify the imbalances in the currency market.