Economist: Solving the dollar exchange rate crisis requires restoring balance between supply and demand.
Economist: Solving the dollar exchange rate crisis requires restoring balance between supply and demand.
1-31-2026
Information/Baghdad…
Economic expert Manar al-Ubaidi confirmed on Saturday that the dollar exchange rate has become the most relied-upon economic indicator for Iraqis, given the weak confidence in official indicators such as inflation, unemployment, and GDP, due to a lack of transparency and unclear calculation mechanisms.
Al-Ubaidi stated in a Facebook post, reviewed by the Information Agency, that “changes in the dollar exchange rate do not necessarily reflect fundamental price movements,” noting that “the exchange rate is only one factor contributing to inflation, and not the decisive factor.”
He added that “the parallel market is governed by supply and demand and is affected by several factors, most notably the heavy reliance on imports, which exceed $70 billion annually, informal trade, the purchase of foreign services, and the continued dollarization of certain sectors such as automobiles and real estate.”
He pointed out that “the dollar crisis in Iraq is a ‘supply crisis’ before it is a price crisis, due to the limited sources of foreign currency, which are confined to the Central Bank, in contrast to the absence of investment, tourism, and remittances from expatriates.”
Al-Ubaidi concluded by emphasizing that “the solution to the exchange rate crisis lies not only in changing the official rate, but also in restoring balance between supply and demand through rationalizing imports, expanding trade finance channels, and encouraging investment and tourism, which will restore stability to the dinar without imposing additional burdens on citizens.”
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