As the Iraqi dinar keeps losing ground against the U.S. dollar in the parallel market, people are getting worried. Prices feel unstable. Many fear their money is losing value fast.
Economic expert Manar Al-Obaidy has shared a detailed explanation of what’s really going on. And according to him, the problem is not a shortage of dollars.
He says the real issue is deeper. It’s about how some businesses are locked out of the official system that provides dollars at the government rate.
Who is causing the pressure?
The biggest demand in the parallel market comes from large trade sectors that can’t access official banking channels. These include:
- Retail goods like clothing, shoes, and furniture
- The used car market
- Small importers and shop owners who don’t have the legal structure banks require
Because these traders cannot buy dollars through official channels, they have no choice but to turn to the parallel market. And when demand rises there, the exchange rate climbs.
It becomes a cycle:
They need dollars → they go to the parallel market → demand increases → the dinar weakens.
What could happen next?
Al-Obaidy sees three possible paths for Iraq’s exchange rate in the coming months.
1. Continued pressure
Demand in the parallel market stays high. The exchange rate keeps rising.
However, he points out something important: this may not heavily affect food and medicine prices. About 95% of traders in those sectors already use the official rate of 1,320 IQD per dollar. So basic essentials may remain more stable than people fear.
2. A government solution
The government could step in and create a special platform for small traders. Institutions like the Central Bank or the Trade Bank of Iraq could handle payments directly with foreign suppliers.
This would allow small traders to access dollars officially, without needing to meet complex banking requirements on their own.
3. A shift in the market
Al-Obaidy believes this is the most realistic option.
Shipping and customs companies could expand their role. Instead of only handling logistics, they could become full import partners. They would manage the money transfers and imports themselves, then supply goods to small traders.
In simple terms, they would move from being just delivery companies to becoming official importers.
The hard truth
It’s unlikely that small traders will individually join the official banking platform anytime soon. Banks face high operating costs, and many small businesses are not legally prepared for the strict requirements.
That leaves the government with a clear choice.
Either it finds a structural solution to bring these commercial sectors into the formal system, or it accepts a volatile parallel market — along with public frustration and constant media pressure.
The problem is not about missing dollars.
