Economic researcher Diaa Abdul Karim said the recent rise in the U.S. dollar exchange rate on Iraq’s parallel market is among the direct consequences of new government decisions related to customs tariffs and increased fees.
Abdul Karim told dinaropinions.com that many local merchants are turning to the parallel market to purchase dollars in order to pay importers, who require foreign currency to source goods from abroad.
“Merchants are buying dollars on the parallel market to purchase goods from importers, as imports are settled in foreign currency,” he said.
He added that domestic demand for foreign currency has risen sharply, particularly on the parallel market, at the same time the government has resorted to borrowing from several banks. According to Abdul Karim, this situation has prompted some banks and exchange companies to raise dollar interest rates in the informal market.
Abdul Karim stressed that the Central Bank of Iraq needs to provide clear explanations for the exchange rate increase and outline solutions to address the situation. He noted that public discussion has intensified around a shortage of dinar liquidity, alongside government borrowing to finance salary payments.
“These factors have contributed to liquidity stress at banks, affecting both local and foreign currency availability,” he said.
