Shafaq News- Baghdad
The Iraqi dinar's devaluation against the US dollar could threaten the livelihoods of millions of workers as rising prices weaken purchasing power, slow commercial activity, and reduce job opportunities, labor and business representatives told Shafaq News.
Rahim Al-Ghanimi, head of the Union of the Unemployed in Iraq (UUI), identified workers, particularly the self-employed, as particularly vulnerable, with their earnings remaining unchanged despite rising food prices and living costs. He estimated that around four million registered workers could be affected by declining economic activity, particularly if factories and projects suspend operations, leaving employees without income.
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Compounding these pressures, declining domestic production and growing reliance on imports could further weaken Iraqi industries and employment, according to Al-Ghanimi, who called for financial policies that account for market conditions and protect low-income households.
The effects extend beyond workers to businesses and consumers, according to Sarmad Al-Kawaz, a member of the Baghdad Chamber of Commerce. Higher trade and production costs are reflected in product prices, he explained, while rising prices have reduced purchases in markets and shopping centers.
A similar slowdown was evident in local markets surveyed by Shafaq News. In Baghdad, a clothing retailer reported declining sales, while another shop owner in Karbala noted that customers were increasingly restricting their purchases to essential goods.
For workers dependent on daily employment, the pressure is particularly acute. A construction worker in Karbala described fewer available jobs and rising household expenses, leaving daily earnings increasingly insufficient to cover basic needs.
Iraq's revised official exchange-rate structure took effect on October 7, raising the public dollar rate from 1,320 to 1,520 dinars. Under the new system, the Central Bank of Iraq (CBI) purchases dollars from the Finance Ministry at 1,500 dinars and sells them to banks at 1,510. The bank maintained that its foreign reserves could fully and immediately cover trade-related external transfers, bank-card settlements, and cash dollar sales to travelers without restrictions, while Parliament Speaker Haibet Al-Halbousi said the decision would not be reversed and had the backing of political bloc leaders.
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