This study aims to measure the impact of the electronic platform on the parallel exchange rate in Iraq during the period 2023–2024. The external financial constraint imposed by the electronic platform has led to a new international policy that can be described as a quasi transformation or a de facto appropriation of the foreign currency sales window. Consequently, exchange rate movements have become directly tied to the foreign currency holdings of intermediary banks, particularly those that are logistically accepted within the U.S. financial system—meaning they facilitate transactions through the Office of Foreign Assets Control (OFAC) under the U.S. Department of the Treasury. The study finds that liquidity intervention operates through two primary channels. The first is domestic: the Central Bank of Iraq (CBI) purchases U.S. dollars from the government in exchange for issuing Iraqi dinars, based on oil revenues. The second is external: foreign currency is utilized to settle credit line obligations extended to local banks. The time lag between these two processes—whether delays or accelerated execution—affects the exchange rate of the Iraqi dinar. Despite measures undertaken by the Iraqi government and the CBI, as well as negotiations with the U.S. authorities, the gap between the official exchange rate and the parallel market rate has persisted throughout the study period.
