Based on multiple media reports, on Wednesday (February 22) local time, the Central Bank of Iraq stated that it plans to allow trade with China to be settled directly in RMB. The bank also said in the statement that as part of the plan, it may increase the balance in its RMB account with the Bank of China in the future.
Mudhir Salih, an economic adviser to the Iraqi government, told the media that Iraq's imports from China have only been settled in US dollars. This is the first time that imports from China have been settled in RMB. According to the analysis, the Central Bank of Iraq has been taking emergency measures to deal with the shortage of US dollars in the domestic market.
The plan is expected to reduce the cost of US dollar financing needed for the country's foreign trade and stabilise the domestic currency.