The Iraqi central bank plans to allow trade with China to be settled directly in yuan as opposed to the U.S. dollar for the first time, it announced on Feb. 22, as part of efforts to reduce pressure on the falling dinar.
In a statement on its website, the bank said the move will help to “stabilize exchange rates,” The National reported.
Under the plan, the central bank could boost the balances of Iraqi banks that have accounts with Chinese banks in the yuan.
However, this option would largely depend on the size of the central bank’s yuan reserves, Mudhir Salih, the Iraqi government’s economic adviser, told Reuters….
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