Central Bank of Iraq and leading currencies
Central Bank of Iraq and leading currencies
7-15-2025
The Central Bank’s sales of “leading” foreign currency declined for the third consecutive month, reaching $5.7 billion in June of this year, a 15.5% decline compared to May, when sales reached $6.5 billion. Thus, the Central Bank’s foreign currency sales in the first six months of the year reached $37.2 billion, a 2.2% decline compared to the same period last year, when they recorded $38.1 billion.
Cash sales of foreign currency also fell to their lowest level, reaching only $99 million in June, the lowest monthly sales value since the introduction of cash sales. Thus, the Central Bank’s total foreign currency sales through cash sales in the first six months of the year amounted to $1.4 billion, a 21% decline compared to the same period last year, when they reached $1.76 billion.
Foreign currency sales through the balance enhancement mechanism reached $5.6 billion in June of this year, a 35% increase compared to June of last year. Thus, foreign currency sales through the balance enhancement mechanism in the first six months of the year reached $35.8 billion, a 37% increase compared to the same period last year, which amounted to $26 billion.
The international settlement mechanism through the Central Bank and the transfer mechanism through the Central Bank were also completely halted, limiting foreign currency sales to balance-building mechanisms and cash sales to travelers. Despite the decline in cash sales and the suspension of international settlements, the dollar exchange rate remained stable and unaffected by this decline.
The central bank’s sales this year are expected to reach around $70 billion, down from last year’s sales of more than $80 billion.
The decline in foreign currency sales, coupled with the stability of the dollar exchange rate on the parallel market and the decline in inflation levels, calls for a careful review to determine the reasons behind this decline. This could be related to the access of most traders to the official market, reducing the need for hard currency on the parallel market, or to a decline in demand for goods, which may reflect the economic stagnation currently plaguing the Iraqi market.
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