Iraq, UAE agree to finance trade, imports in UAE dirham

United Arab Emirates dirham banknotes on April 15, 2019 [Jason Alden/Bloomberg via Getty Images]

Iraq and the United Arab Emirates have agreed to finance trade and imports in Emirati dirham, Iraq state news agency said today.

The two countries also agreed to launch financial transfer operations. The first phase of this agreement will include five Iraqi banks, the agency added.

The dirham has been pegged to the dollar since 1997, with a fixed exchange rate of 1 USD = 3.6725 AED. This peg provides stability, analysts say.

Last in October, Iraq announced that it will ban all transactions involving the US dollar as of 1 January 2024. The primary objective behind this decision is to wrest control over a fluctuating black market exchange rate and bolster the utilisation of the Iraqi dinar.

READ: Iraq, UAE top importers of Iran goods

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