Transitioning to New Iraqi Dinar Financing

 

1.      From October 15, 2003 Ministry funding will be provided in new Iraqi dinar with the exception of settling dollar contracts entered into before October 15, 2003.

 

2.      Alternatively, if ministries or departments want to buy dollars because their current dollar balance is not enough to cover domestic contracts entered into before October 15, 2003, they can purchase these from the Central Bank at the previous day’s exchange rate

 

3.      Ministries will be expected to make domestic expenditures with new Iraqi dinar.

 

4.      Till December 31, 2003, when requesting transfers from the Treasury account to their own accounts, centrally financed departments should not request funds that will be used to finance large purchases of imports in dollars.  These should be left in the Treasury account and the Ministry of Finance will exchange them for dollars, which it will transfer to the Iraq DFI account at the Central Bank.  DFI New York will issue a dollar payment for the imports against receipt of these funds.  Departments must register this as expenditure in their records at the budget exchange rate of 1:1500

 

5.      Five private banks are now able to provide international banking service which will normalize transfers of money into and out of Iraq and make available standard Letters of Credit to finance imports into Iraq.

 

6.      Local Treasury Offices and other departments are to run down the remaining dollar balances in their accounts until December 31, 2003.  This dollar expenditure will be scored against departments’ allocations  at a rate of 1:1500, which was the rate used to convert the dollar budget to New Iraqi Dinars.  All positive balances remaining in department’s accounts, including any dollar amounts remaining at that time will be transferred back to the central Treasury Account at the end of the year

 

7.      After meeting existing dollar obligations, local Treasury offices and departments can sell dollars to the Treasury Account at the Central Bank at a rate of 1:1500.  This is the same the rate used to convert the dollar budget amounts to New Iraqi Dinars.  The MOF will credit the local Treasury or department’s account in Dinars for the amount exchanged

 

8.      Unless specifically authorized by the Ministry of Finance, all dollar accounts of Ministries will be closed on January 1, 2004