Ramadan Revives The Iraqi Dinar And Official Expectations Are A Continuous Decrease In The Dollar
Economy |Baghdad today- Baghdad
The exchange rate of the US dollar in the parallel market in Iraq decreased significantly during the first and second weeks of Ramadan, registering 1480 dinars per dollar of the first lower, from the level of 1520 dinars before the beginning of the month.
The decrease is due to several factors, most notably the
strict measures taken by the Central Bank of Iraq to control the imports and electronic financial transfers, in addition to the
decrease in the economic activities of the Iraqi citizen during the month of Ramadan.
“Strict procedures“
Government adviser Alaa Al-Fahd says that the
decrease in the price of the dollar in the parallel market is due to the Central Bank’s application of strict procedures aimed at controlling the imports and electronic financial transfers. He adds, that
this measure reflects the success of the monetary policy of the central bank, as
Iraqi banks began carrying out correspondence with international banks with commercial relations. He added that the
diversification of the currency basket contributed greatly to reducing pressure on the dollar, and that
most imports of consumer and food commodities are funded through the official platform of the central bank at the official price, stressing that
any trading outside this framework is an informal treatment.
Al-Fahd praised the
Central Bank‘s announcement of the application of digital transactions and the
encouragement of tourism, stressing that
these steps contributed to reducing pressure on the parallel market for exchange rates.
Al-Fahd expected the continuation of stability in the market, especially with the
coverage of most of the needs of Ramadan and the Eid season through the official platform and at the official price, indicating that the
expectations indicate that the price of the dollar will continue to decrease in the coming period.
The dollar exchange rate against the dinar in the last week increased significantly before Ramadan, registering 1520 dinars per dollar for sale and 1510 dinars to buy in the main stock exchanges, but in the first week of Ramadan, the exchange rate recorded a significant decrease, as it reached 1465 dinars per dollar for sale and 1475 dinars per dollar for buying in the main stock exchanges in Baghdad, Erbil and Basra.
In the second week of Ramadan, the exchange rate increased slightly, and he recorded 1485 dinars per dollar for sale and 1480 dinars per dollar for purchase, with a variation of up or down, not exceeding two and a half dollars.
The Iraqi dinar exchange rates against the dollar are affected by several major factors, including:
Daily sales volume at a currency sale auction
–Central bank procedures related to external transfers
-Traders need to import goods, especially from countries that are subject to US sanctions,
which increases the demand for the dollar in the parallel market. The
Iraqi dinar smuggling to other countries to benefit from the price differences.
“Ramadan changes the rules of the game“
For his part, economic expert Ahmed Al-Ansari believes that the
decline in demand for the dollar during the month of Ramadan
is mainly due to the low economic activities of the Iraqi citizen, which is
evident in the decline in the movement of real estate, cars and basic services. Al-Ansari explained that the
weak purchasing power of citizens also contributed to reducing the volume of import,
which led to a reduction in demand for the dollar in the parallel market. He added that the
central bank’s procedures aimed at
reducing import through the black market and
encouraging merchants and importers to import through approved banks and
transfer the dollar at the official price,
was an additional reason for this temporary decline.
Al-Ansari expected a strong recovery for the markets after the month of Ramadan and by Eid Al -Fitr,
which may lead to a slight increase in the price of the dollar or its return to its previous level, stressing that the
price of the dollar is greatly affected by the strength of supply and demand in the market, as
it increases as the demand for it increases in the parallel market.
He pointed out that the
continued facilities provided by the central bank, such as
providing the dollar of travelers, will
encourage citizens to deal at the official price and
avoid exchange offices and banks that sell the dollar at higher prices.
On February 7, 2023, the Council of Ministers approved the decision of the Central Bank of Iraq’s board of directors to amend the dollar exchange rate against the dinar, equivalent to 1300 dinars per dollar, as it obligated banks to sell at a price of 1310 dinars per dollar and at a price of 1320 dinars per dollar for currency transfer operations if the electronic cards are used while traveling or via the Internet, with the ceiling of 3 thousand dollars at the official price granted to each traveler providing a visa and travel ticket with his official passport.
Source: Al-Jazeera Net
https://baghdadtoday.news/269711-رمضان-ينعش-الدينار-العراقي-وتوقعات-رسمية-بانخفاض-مستمر-للدولار.html
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