Economic expert Dirgham Al-Haidari said on Sunday that several factors are behind the recent rise in the US dollar exchange rate in Iraq’s local markets.
Al-Haidari explained that tighter US sanctions on Iran have increased demand for dollars to pay for trade. At the same time, the reduction in the travel currency allowance from $3,000 to $2,000 has pushed patients and tourists to buy dollars from the parallel market, adding more pressure to the available cash supply.
He also said the withdrawal of Al-Taif Bank has had a major impact on the market. The bank was an important channel for bringing dollars into Iraq through the Western Union network. Al-Haidari also raised concerns that some banks that have not been sanctioned could be deliberately manipulating exchange rates to make large profits.
Iraq’s currency markets continue to face ups and downs because of strict US Federal Reserve restrictions on international money transfers. There is also growing criticism from lawmakers and economic experts over the electronic currency platform. They argue that the system has failed to control the parallel market and has instead increased the gap between the official dollar rate and the price in local markets.