Saleh’s appearance: High oil prices may protect the currency despite geopolitical tensions
Saleh’s appearance: High oil prices may protect the currency despite geopolitical tensions
2026/01/12
The Prime Minister’s financial advisor, Mazhar Muhammad Saleh, said on Monday that the impact of geopolitical tensions on the exchange rate depends on several factors, and is not related to price increases alone.
In his interview with Al-Furat News Agency, Saleh pointed out that “if regional tensions lead to higher oil prices while the flow of oil resources continues uninterrupted, this may enhance monetary stability rather than threaten it. Higher oil prices increase foreign reserves, giving monetary policymakers more room to intervene in the exchange market, whether by managing the supply of foreign currency or controlling local liquidity and directing monetary demand in a way that preserves price stability and the exchange rate together.”
He explained that “political tension is not the only factor in putting pressure on the currency, but rather it becomes a conditional variable whose final effect depends on the continuity of oil exports in terms of quantity and regularity, the level of global oil prices and their medium-term trends, the efficiency of monetary policy tools in absorbing psychological shocks and speculations, in addition to the harmony of fiscal policy with monetary policy in managing surpluses or deficits.”
Saleh concluded by saying that “the situation does not allow for a definitive judgment or a mechanical prediction of a rise in the exchange rate simply because of escalating tensions, as the balance of influence remains dependent on the dynamic interaction between oil, reserves, market behavior, and the institutional capacity of the state to intervene rationally.”
alforatnews.iq
