Shafaq News- Baghdad

Iraqi lawmakers on Wednesday urged the government to reverse the increase in the official US dollar exchange rate, arguing that the measure would raise living costs and place additional financial pressure on low- and middle-income households.

Hassan Al-Asadi, head of the parliamentary bloc of the Al-Nahj (Approach) National Alliance, cautioned during a news conference at parliament that higher prices would affect essential needs, particularly food, medicine and services, as well as construction materials and industrial inputs.

Recalling Iraq’s 2020 exchange-rate increase, Al-Asadi claimed that the gap between Central Bank and private-bank dollar sales generated substantial profits for private banks and currency speculators rather than the state treasury. As alternatives for boosting public revenue, he proposed strengthening non-oil collections, cutting unnecessary spending and reviewing the costs of oil and gas management contracts and mobile-phone licenses.

Saba Al-Saadi, an MP from the Reconstruction and Development Coalition (Al-Ima'ar wal-Tanmiya), led by former Prime Minister Mohammed Shia Al-Sudani, blamed the Finance Ministry and Central Bank for what she described as failures in fiscal and monetary policy, arguing that authorities had no effective plan to regulate the market or protect the dinar and that the parallel market was determining the cost of citizens’ basic needs.

“The citizen’s pocket cannot be the ready solution for every failure,” Al-Saadi said, rejecting the use of a higher exchange rate to address the budget deficit. She threatened parliamentary questioning and accountability and disclosed efforts by lawmakers to collect signatures for a session to discuss the decision.

Iraq’s Cabinet on Tuesday approved a new official exchange-rate structure following an emergency recommendation from the finance minister and Central Bank governor, setting the dollar at 1,500 dinars for purchases from the Finance Ministry, 1,510 for sales to banks and 1,520 for sales by banks and non-bank financial institutions to end users. The adjustment raised the official rate for the public by 20,000 dinars per $100 from the previous 132,000 dinars.

The Central Bank has characterized the move as a “strategic step” to strengthen financial stability, reassuring citizens and businesses about the adequacy and strength of its foreign reserves.

Before the decision, the parallel-market rate had climbed to around 165,000 dinars per $100 amid speculation and expectations surrounding the exchange-rate change. On Wednesday, after the new rate took effect, the parallel rate rose further to around 168,500 dinars per $100 in Baghdad and 168,200 in Erbil.

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