The dollar to 160 thousand?.. pessimistic expectations about the exchange rate in Iraq

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On Friday, experts in Iraqi economic affairs predicted that the gap between official and parallel prices will increase in the coming days or weeks. They also anticipate that the exchange rate of the dollar will rise to 160,000 dinars during this period.

According to economist Nabil Al-Marsoumi, the difference between the official and parallel prices is likely to grow in the upcoming days or weeks. This trend will be driven by the release of funds in the 2023 budget, as well as a rise in consumer and investment spending.

According to Al-Marsoumi, the existing conditions are unchanged. This means that the gap between the payment dues of Iranian trade and the actual payment will continue to be significant, and it will grow even more over time, as long as there are American sanctions in place that prevent official financial transfers through bank transactions.

He said that Iranian exports to Iraq exceed $10 billion annually and are currently financed from the parallel market by collecting travelers’ dollars and transferring them to Iran.

The economic expert stated that Iraqi travelers abroad spend $3.41 billion annually, but are unable to obtain dollars at the official rate, leading them to resort to the parallel market.

According to Al-Marsoumi, the current factors in Iraq suggest an inevitable increase in the gap, and the exchange rate of the dollar reaching 160,000 dinars in the upcoming weeks or months would not be a surprise.

He said that if the central bank can work with the US Federal Reserve on the electronic platform, then the scarcity of the dollar in the Iraqi market will increase and cause its price to rise.

Al-Marsoumi has highlighted that reducing the gap in Iraq’s economy is not easy to implement by relying solely on the actions of the Central Bank or the Iraqi government, as it pertains to capabilities that neither possess.

In his concluding statement, he emphasized that the only feasible way to narrow down the price gap is to either lift the US sanctions on Iran and resume official transfers, or to completely halt foreign trade and restrict Iraqi visitors from traveling to Iran. If not, the gap will persist and even widen in the near and medium term.

Yesterday, the Central Stock Exchange in Baghdad closed, causing the Iraqi dinar to drop to 156,000 per 100 US dollars.