The dinar is recovering. The dollar’s value in Iraq has fallen due to local measures.
The dinar is recovering. The dollar’s value in Iraq has fallen due to local measures.
5-7-2025
Information/Report…
Over the past few days, Iraqi markets have witnessed a significant decline in the dollar exchange rate against the dinar, following months of fluctuations and price increases that sparked public concerns and market turmoil.
Exchange offices and the local stock exchange in most Iraqi governorates recorded a decline in the dollar exchange rate against the Iraqi dinar on Tuesday, part of a slight and gradual decline that has been ongoing for days. In the final hours of the closing hours, the exchange rate for $100 reached 143,000 dinars, a difference of 11,000 dinars from the official exchange rate adopted by the Central Bank of Iraq, which is 1,320 dinars to the dollar.
The sudden decline has raised questions about its true causes and whether it represents the beginning of monetary stability or merely a temporary decline. Experts believe the reasons are primarily local, not the result of regional or global developments.
In this context, economic expert Abdul Rahman Al-Mashhadani told Al-Maalouma, “Geopolitical conditions, such as tensions between India and Pakistan, typically increase demand for the dollar, but what happened in Iraq clearly indicates that internal factors are the primary driver of the price decline.”
Al-Mashhadani explained that one of the most prominent of these factors was the Central Bank’s previous decision to regulate the sale and purchase of real estate, which reduced the use of the dollar in real estate transactions, thus easing pressure on foreign currency.
He also pointed out that the expansion of banks authorized to process foreign transfers and the adoption of a balance-enhancing mechanism led to significant dollar sales exceeding $300 million per day in previous periods. However, much of this money was not used to import goods, but rather remained in external accounts, known as “return,” which does not reflect real demand within the market.
Al-Mashhadani pointed out that the new Central Bank administration has adopted a more open policy to regulate the market and tightened controls on transfers and currency smuggling, which has contributed to strengthening confidence and raising the level of foreign exchange reserves.
Despite this improvement, observers caution against considering the dollar’s decline as an indicator of permanent stability, especially given the ongoing political and economic challenges and the market’s reliance on imports. Any decline in oil revenues or foreign currency inflows is a source of concern.
Experts emphasize that sustaining the dollar’s decline requires continuing economic and monetary reforms, strengthening the role of the banking sector, regulating the parallel market, and supporting local production to reduce reliance on the dollar.
almaalomah.me
