On Tuesday, the Iraqi dinar gained against the dollar at the currency exchange in Baghdad. This is because the Iraqi government and monetary authorities are taking measures to combat the parallel market and punish currency speculators.
Today, on Tuesday, the Al-Kifah and Al-Harithiya Stock Exchanges in Baghdad, along with the Erbil Stock Exchange, witnessed a rise in the value of the Iraqi dinar as compared to the dollar. The dinar’s value increased by 1,490 dinars to one dollar, which is the highest it has been in more than eight months. However, it still remains quite far from the official value set by the Central Bank of Iraq, which is 1,320 dinars per dollar.
According to experts, the dinar’s exchange rate is expected to increase against the dollar due to several reasons gradually. One of the main factors is the recent agreement between the Iraqi Central Bank and the US Federal Reserve. This agreement aims to transfer operations gradually to enhance the advance balance of the dollar in the accounts of a number of Iraqi banks.
In addition to imports from countries sanctioned by the US, such as Iran, Syria, and Lebanon, the Iraqi market now has standard financial systems that reduce demand for the dollar.
While some believe that trade exchange operations stagnate and deals temporarily cease at the end of each year due to the holiday season, others disagree.
The topic is “The recovery of the Iraqi dinar.”
Economic expert Abdul Rahman Al-Sheikhli has predicted that the exchange rate in Iraq may drop to 1,450 dinars per dollar in the near future due to current intervention methods.
During an interview with Al-Arabi Al-Jadeed, Al-Sheikhli explained that the value of the dollar may decrease if Iraq diversifies its sources of income. This could be achieved through the development of industry, agriculture, trade, and investment in other areas of wealth.
He emphasized that by investing in modern and advanced methods in management, work, industry, and agriculture, the rate of imports from abroad can be reduced. This will lead to the recovery of the national economy, which in turn will have a positive impact on the gross domestic product of Iraq.
Jamal Kujar, a member of the Finance Committee in the Iraqi Parliament, confirmed that the decrease in the dollar exchange rate is not inevitable.
During an interview with Al-Araby Al-Jadeed, Cougar clarified that the recent decline in the exchange rate is due to a decrease in demand for it in commercial and financial exchange operations. This is mainly because countries are celebrating the New Year.
According to him, the Iraqi financial market is dominated by a group of speculators who dictate prices based on the demands of their work in the market. He emphasized that the Iraqi government has no control over these speculators.
Koger noted that Iraq’s economic and financial structure is facing a fundamental issue, which is the imbalance resulting from its heavy reliance on oil exports. This has led to a dollar crisis, as the country needs dollars to cover its foreign expenses while remaining heavily dependent on imports due to the lack of effective national production.
Ali Jassim Al-Hayani, an economic researcher, predicts that although there may be an increase in demand for the US dollar by the end of 2023 due to a significant number of Iraqis traveling abroad for the end-of-year vacation and the halt of commercial activities, the exchange rate may still decrease significantly if the Iraqi government implements strict measures against speculators.
During an interview with Al-Arabi Al-Jadeed, he stated that the decline was due to the reduction in black transfers following Iraq’s recent agreement to finance foreign trade using non-dollar means, particularly with Turkey.
“He cautioned against using money laundering networks and influential parties to gain direct control of the dollar in the market after a decrease in prices. He called on the government to implement economic security measures and enforce them in the market to prevent fraud and price manipulation.”
Government actions
Hisham Al-Rikabi, the Media Advisor to the Presidency of the Government, has announced that the Iraqi government is taking serious measures to address the issue of the dollar shortage. The government is implementing several legal and administrative measures to combat currency smuggling operations and to prevent manipulation of the exchange rate.
According to a press statement by Al-Rikabi, the government’s battle with the dollar is almost over and its financial system reform measures have strengthened confidence between Baghdad and Washington.
“He mentioned that the Iraqi government’s efforts to reform financial institutions and improve monetary systems were crucial and effective in restoring balance and building trust between Iraq and the United States. These efforts have resulted in positive steps towards achieving success in the Iraqi banking sector.”
He mentioned that the currency market is expected to undergo a significant change in the upcoming days. This is due to the government’s actions and instructions to the Central Bank to take decisive measures to tackle the issues of manipulation and smuggling.
The US Ambassador to Iraq, Alina Romanowski, said last Sunday that her country continues to provide dollar services to Iraq in the interest of economic stability.
On her account on the “X” platform, she stated that many Iraqi banks have established relationships with international banks. She described this as a positive step towards reforming the Iraqi banking sector.
