Economists identify reasons for the rise of the dollar in Iraq and expect it to exceed 160 thousand
Economists identify reasons for the rise of the dollar in Iraq and expect it to exceed 160 thousand
2024-10-03 02:23
Shafaq News/ The “Iraq Al-Mustaqbal” Foundation for Economic Studies and Consultations attributed, on Thursday, the reasons for the rise in the price of the dollar against the dinar in Iraq to the decline in remittances of other currencies, and the inability to cover the demand for foreign currency for the purpose of import, expecting the rise to continue until the price of one dollar reaches 1600 dinars in the coming period.
The head of the institution, Manar Al-Obaidi, said in a statement received by Shafak News Agency, that the dollar prices against the dinar during the past days reached 1550 dinars for every US dollar.
Al-Obaidi attributed the increase to the decline in remittances of other currencies, specifically the UAE dirham and the Chinese yuan, as a result of the large restrictions imposed by correspondent banks that are carrying out the process of strengthening the balances of these currencies, in addition to the reluctance of banks included in the Citi-pilot project to open accounts for operating companies and limiting their work to companies with which they have previously dealt, to the exclusion of others.
Among the reasons mentioned by the head of the institution is “the inability of all transfer mechanisms to cover the demand for foreign currency for the purpose of importing some goods, specifically mobile phones and gold, which are considered the most valuable goods to import, which prompts importers to resort to the parallel market for the purpose of importing.”
He added, “It is expected that the dinar will continue to decline against the dollar and may reach 1,600 dinars per dollar in the coming months if the problems are not addressed with practical solutions.”
1- Increasing the network of correspondent banks around the world, especially in the UAE and China.
2- Controlling financial policy by limiting the entry of some types of goods in order to reduce demand for them compared to supply.
3- Pressuring banks under the Citi-Pilot project to be more open to accept a wider range of customers.
4- It may be necessary to temporarily ban the import of some goods to reduce the demand for foreign currencies until more organized and smooth solutions are found for the foreign transfer process.
Al-Abidi said, “Without adopting these solutions, the dinar will continue to decline against the dollar and may soon exceed the 1,600 barrier.”
In turn, the economic and financial expert, Abdul Rahman Al-Mashhadani, attributed the rise in the dollar exchange rate in Iraq to political reasons rather than economic ones.
Al-Mashhadani said in a statement to Shafaq News Agency, “The dollar has been stable for a long time in the past few days at 149 to 150 thousand Iraqi dinars for the 100 dollar bill, especially after the transfer of the real travelers’ dollar to the airport and the organization of the sale process in a smooth manner and resolving the bottleneck crisis at the exchange companies and the payment companies available inside the airport.”
He added, “There are no economic reasons or justifications behind the increase because the Central Bank is still financing large amounts of foreign trade, and this is the important element that covers the volume of requests for traders.”
The expert expected that “the rise in exchange rates is due to the unrest in the region and the fear that Iraq is one of the stations that could be targeted, which prompted traders to settle accounts of debtors and creditors, especially those who have obligations to traders abroad. The fear of instability may cause a rise, and thus the trader will be affected in paying what is due from him.”
He pointed out that the second matter is “the fear and panic that afflicts people in such crises, and they turn to converting dollars for fear that things will get worse and they will be forced to travel or emigrate, even if it is within Iraq,” adding that “the dollar is the safest means at hand because it is in demand in the markets.”
The price of the dollar rose in local markets to reach approximately 155 thousand dinars for every 100 dollars after the events witnessed in the region, including military operations in Lebanon and Iran on the one hand and Israel on the other.
shafaq.com
