What behind dollar surge against Iraqi dinar, official explains

Shafaq News/ The rise in the US dollar exchange rate against the Iraqi dinar in the parallel market is attributed to certain financial measures taken by the Central Bank of Iraq (CBI), said Jabbar Koran, the official spokesperson for the currency market in Al-Sulaimaniyah, on Tuesday.

"The surge in the dollar's exchange rate against the dinar is linked to the CBI's financial measures," Koran explained to Shafaq News Agency, "The Central Bank had previously taken some effective measures, but the current increase is due to other steps that have not yet been implemented. Among them is the decision by the bank to expand foreign transactions beyond the US dollar, which has not yet been enacted."

Koran also pointed out that the Central Bank has not integrated all banks into the electronic platform, limiting operations to only seven banks. These seven banks, he said, are insufficient to handle Iraq's annual foreign trade volume of approximately $50 billion. "I do not expect these banks to accommodate this volume of trade," he noted.

Another factor contributing to the dollar's rise is the reduction in cash injection by the Central Bank, with the exception of today, Tuesday. "The current demand for dollars is abnormal. I do not believe that opening a dollar exchange window for travelers at airports is the reason for the increase, even though it is travel season," Koran added.

Koran also highlighted the large number of exchange offices and companies in Iraq and the Kurdistan Region, that the Central Bank cannot meet the demand for dollars. "There are about 1,200 exchange companies in Iraq and around 2,500 in Kurdistan. These companies have not yet merged to form about 400 operational companies. All these companies and offices need more than $50 million daily," he said.

Koran excluded the scenario of the recent increase linked to a political or economic crisis or external factors. He believes that the Central Bank can control this rise, predicting that the exchange rate could climb to over 150,000 dinars per 100 dollars. However, he ruled out the possibility of the rate reaching the extreme levels seen in previous periods.