BRICS Setback: Iraq Halts Chinese Yuan Transactions, Sides with US
In a significant blow to BRICS member China\'s ambitions, Iraq has abruptly stopped all financial transactions in the Chinese yuan. This decision comes after a directive from the US Federal Reserve and raises questions about the future of yuan-based trade within the BRICS alliance. For months, BRICS member China was pushing the Chinese yuan for trade transfers with Iraq, but now the nation has received a significant setback.
The news, first reported by Cetoex News, indicates that Iraq\'s Interior Ministry has also placed a ban on U.S. dollar transactions across the country in a move to strengthen the Iraqi Dinar. This simultaneous shift away from both the USD in internal transactions and the Yuan in international transfers signifies a complex geopolitical strategy.
US Federal Reserve\'s Influence
The directive from the US Federal Reserve appears to be a key driver in Iraq\'s decision. The directive highlights concerns about potential manipulation and other problems with certain transfers. The decision to stop using the Chinese yuan in financial transactions stems from worries about possible manipulation and other problems with certain transfers. Sources suggest the Federal Reserve expressed reservations about the transparency and regulatory oversight of yuan transactions involving Iraq.
Iraq\'s Central Bank Governor in the US
Adding weight to this narrative, Central Bank Governor Ali Al-Alaq is currently on an unannounced visit to the US. He is expected to discuss the Federal Reserve\'s decision and explore alternative financial arrangements. This visit underscores the importance of the US-Iraq financial relationship in shaping Iraq\'s economic policies. The In a recent move by the Iraqi government, Central Bank Governor Ali Al-Alaq is on an unannounced visit to the US to discuss the Federal Reserve\'s decision to stop Iraq.
Implications for BRICS and the Yuan
Iraq\'s move is a significant blow to China\'s efforts to internationalize the yuan. While BRICS aims to reduce reliance on the US dollar, this decision demonstrates the challenges in overcoming existing financial dependencies and geopolitical pressures. The long-term consequences for the BRICS alliance and the yuan\'s global standing remain to be seen, but the immediate impact on China\'s trade ambitions with Iraq is undeniable.
Stay tuned for further updates on this developing story.