The impact of the elevated exchange rates of the US dollar in the Iraqi markets against the dinar, and its implications on the Iraqi economy, remain a topic of concern for economists and politicians. These rates are causing increased hardships for citizens.
Although the current government has implemented numerous measures through the Central Bank of Iraq, it may not be enough to combat the increasing value of the dollar and prevent the continued weakening of the local currency.
Recently, the Iraqi markets experienced an increase in value due to newly imposed US sanctions on 14 Iraqi banks. This led to a significant rise in the exchange rate of the dollar, as it became more in demand in local markets over the past week.
In Baghdad, the current purchase price for one hundred dollars is 157,500 dinars, which is an increase of 3000 dinars from yesterday. Additionally, the selling price for one hundred dollars is currently at 155,500 dinars.
Economists and government advisors have suggested various solutions, but none have fully addressed the recurring threat to the Iraqi economy. Yet, Nabil Al-Marsoumi’s proposal may be considered unconventional.
According to economist Nabil Al-Marsoumi, the most viable solution to resolve the current exchange rate crisis is to restore the dollar exchange rate back to its pre-pandemic level, which was at 1180 dinars per dollar.
He believes that the proposed solution is financially unwise and costly. He argues that it is only a temporary fix that won’t solve the underlying problem. However, it may stop the Iraqi dinar from losing value and give authorities time to find a more permanent solution. He suggests focusing on genuine solutions rather than making empty promises.
The economist believes that this proposal will face strong opposition from economists, but politicians may still choose to implement it eventually. This is because the current conflict goes beyond currency exchange and may result in physical harm.