Government comment on the rise in the dollar exchange rate in Iraqi markets
Government comment on the rise in the dollar exchange rate in Iraqi markets
2025-12-25 02:34
Shafaq News – Baghdad
On Thursday, the Prime Minister’s financial and economic advisor, Mazhar Muhammad Salih, commented on the return of the rise in the exchange rate of the US dollar against the Iraqi dinar in local markets.
Saleh told Shafaq News Agency: “The fluctuations observed in the parallel exchange market are limited in impact and do not affect the stability of the general price range in our country, which has maintained a low inflation rate of around 2.5% annually. This is due to the combined effect of three effective economic policies.”
He explained that the first of these policies is: “The monetary policy that adopts a fixed official exchange rate for the Iraqi dinar against the dollar, at a level of 1320 dinars per dollar, which provides a stable nominal anchor for prices.”
He added: “Secondly, there is the fiscal policy that provides widespread support, as subsidies constitute nearly 13% of GDP, which mitigates the transmission of price shocks to living standards, particularly in basic goods and services.”
Saleh continued: “The third is the trade policy in price defense; in addition to the subsidized food basket, the modern market system (hypermarkets) has emerged as the ‘qualitative countermeasure’ to the effects of the exchange market, as it works to absorb what can be called the ‘colored noise’ resulting from confused information in the parallel exchange market, and transform it into white noise with stable content in terms of prices and consumption.”
He stressed: “Therefore, the parallel exchange market no longer has any significant impact on living standards, after it became practically detached from the level of income and consumption, and its impact shifted to the asset sector, which is not directly related to the stability of daily living.”
The Prime Minister’s financial and economic advisor concluded by saying that “the minor fluctuations witnessed in this market are merely temporary and ineffective reactions to the recently launched fiscal discipline package aimed at re-examining the cost-benefit trajectories of public spending and revenues, and these are natural movements that all markets experience when they receive new signals from public policy and adapt to them.”
The exchange rate of the US dollar has risen against the Iraqi dinar in local markets since the beginning of December.
Some economic analysts had also predicted this rise, with some attributing it to the government resorting to devaluing the Iraqi dinar against the dollar to compensate for the financial shortfall resulting from the decline in global oil prices, while others believed that the reason was due to the “fragility” of the Iraqi economy.
shafaq.com
