Iraq trade in foreign currency to china in yuan.

 Iraq's first-time trade in foreign currency to china in yuan.

 

In an effort to increase access to foreign currency, the central bank of Iraq announced on Wednesday that it planned to permit commerce with China to be settled directly in yuan for the first time. The cabinet approved a currency revaluation earlier this month after the central bank took quick action to address a shortfall of dollars in the local markets.

 

Mudhir Salih, the government's economic adviser, told Reuters on Wednesday that this was the first time imports from China will be financed in yuan rather than simply (U.S.) dollars.

 

As China gradually opens up its financial markets and some nations try to diversify their currency exposures, the move is the most recent indication of the yuan's expanding influence on the global arena. According to a statement, the central bank may increase the balances in yuan in the accounts of Iraqi banks that have Chinese banks as part of its plan.

 

Another choice, it continued, would be to use the central bank's accounts with JP Morgan and the Development Bank of Singapore (DBS) to increase the balances of local banks.

 

The first option would rely on the yuan reserves of the central bank, whilst the second would utilize the bank's dollar holdings at JP Morgan and DBS. The eventual beneficiary would be paid by the two banks once they converted the dollars to yuan.

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