Shafaq News- Baghdad/ Erbil

The US dollar climbed further against the Iraqi dinar on Thursday, nearing 160,000 dinars per $100 in Baghdad as an economist pointed to uncertainty, speculation and political rhetoric as factors driving demand in the parallel market.

According to a Shafaq News market survey, the dollar closed at 159,500 dinars per $100 at Baghdad’s Al-Kifah and Al-Harithiya exchanges, up from 158,800 dinars in morning trading.

In Baghdad’s exchange shops, the dollar was selling at 160,000 dinars per $100 and buying at 159,000.

In Erbil, the dollar also rose, with exchange shops selling $100 for 159,100 dinars and buying it for 159,050.

Economist Ali Daadoush told Shafaq News that “irresponsible” remarks by some politicians and non-specialists, combined with uncertainty and speculation, were increasing demand for dollars in the parallel market.

He said part of the market’s cash-dollar supply also comes from travelers, travel companies and exchange firms linked to citizens purchasing foreign currency at the official rate for travel, medical treatment, study and other purposes approved by the Central Bank of Iraq (CBI).

Daadoush said that supply had also declined because traders and importers held fewer dollars abroad amid delays in official transfers used to finance imports of goods and services.

The rising exchange rate, he said, could feed into domestic prices because Iraq relies heavily on imported goods, increasing the risk of imported inflation alongside higher customs duties and taxes.

Daadoush said he did not expect CBI to intervene directly in the parallel market, noting that official foreign transfers are conducted through the banking system.

He said the CBI could instead use forward guidance to reassure traders, importers and the wider market about the continued flow of cash dollars through regular shipments.