Iraqi dinar faces volatility: expert predicts stabilization amidst political tensions
Iraq's currency market has been witnessing fluctuations recently, with the US dollar's exchange rate against the Iraqi dinar showing unpredictability. Amidst this backdrop, academic and economic expert Khaled Haider shared insights with Shafaq News Agency, shedding light on the factors contributing to the dollar's fluctuation and his expectations for future stability.
The global political landscape has a direct impact on the financial and economic stability of regions, and recent events, including the crisis in Gaza and accusations against Iran of supporting the Hamas movement, have added complexities to Iraq's economic scenario. Haider pointed out that these events, particularly concerns about Tehran's influence in Iraq, are key reasons behind the expectations of a dollar price rise. As a significant economic hub for its neighbor in the Eastern Province, Iraq has become a focal point in these financial developments.
Administrative and financial corruption within Iraq's system has exacerbated the exchange rate disparity. Haider highlighted how corruption has led to individuals benefiting from these differences, prompting the Central Bank of Iraq to inject substantial dollars into the currency auction. Despite the daily need for currency ranging from $190 to $200 million, the bank has been pumping more significant amounts to manage the exchange rate to reach $250 million daily.
Haider stated, "Near-term expectations may be inaccurate, but it is expected that the price of the dollar in the markets will approach the government pricing at the beginning of next year after the implementation of the Central Bank of Iraq's decision to ban financial transactions in anything other than the Iraqi dinar, and this will make the Iraqi dinar more powerful in local markets."
Regarding the impact of the fluctuating dollar exchange rate on citizens, Haider emphasized the negative consequences, especially in a country like Iraq, which is heavily reliant on imports. The widening gap between the official exchange rate and the black market rate, where the dollar reached above 160,000 dinars against 100 dollars, directly affects the prices of consumer goods, worsening the financial strain on Iraqi households.
Earlier reports from Shafaq News Agency revealed a slight decline in dollar prices, with rates dropping to 165,250 dinars against 100 dollars after the closure of Baghdad's central Al-Kifah and Al-Harithiya stock exchanges. The morning prices had stood at 166,000 dinars against 100 dollars.
