Iraq cracks down on dollar market disparity
Shafaq News – Baghdad
Iraq is moving to eliminate the gap between the official and parallel market exchange rates of the US dollar, Economic Advisor to the Prime Minister, Mudher Muhammad Saleh, revealed on Tuesday.
The official rate set by the Central Bank of Iraq (CBI) is 132,000 dinars per $100, while the parallel market rate has hovered near 139,000 dinars in recent days—a difference the government seeks to erase.
Speaking with Shafaq News, Saleh outlined five key measures driving the ongoing convergence:
-Ban on internal dollar use: The prohibition of domestic dollar transactions, especially in real estate, has curbed the dollarization of the local economy.
-Shift to global correspondent banks: Foreign currency transfers now go through international banks, replacing the Central Bank’s former exchange window and reducing reliance on unofficial, high-cost funding.
-Inclusion of small importers in official channels: Around 60% of Iraq’s foreign trade is now financed through the formal banking system at the official rate, lowering demand in the black market.
-Expanded use of electronic payment cards: Travelers increasingly rely on foreign-currency payment cards, easing demand for cash dollars. Simplified airport procedures further support this shift.
-Price stabilization via government cooperatives: Key imports—such as consumer goods and construction materials—are distributed at the official rate through state-backed outlets, aligning monetary, fiscal, and trade policies.
Saleh concluded that with the exchange rate gap now below 4%, Iraq is entering a phase of "price convergence," where the remaining difference reflects only transaction costs.
