Iraq's Finance Ministry: devaluation had a little impact on commodity prices

Shafaq News/ Iraq's Ministry of Finance downplayed the impact of the national currency devaluation on the foodstuff and basic commodity prices in the Iraqi markets, hinting at a greater role for other factors that are often overlooked.

An infograph shared by the ministry said that logistic and transportation costs, in addition to the rise of metals and primary material prices, contributed to the prices surge.

The ministry said that the rise of foodstuff in the global market drove its prices in the domestic market up.

In December 2020, the Central Bank of Iraq set the new rate for the dinar, which is pegged to the U.S. dollar (USD), at 1,450 Iraqi dinars (IQD) when selling to the Iraqi Finance Ministry. The dinar will be sold to the public at 1,470 IQD and to other banks at 1,460 IQD.

The new rates represented a dramatic reduction from the previous official rate of 1,182 IQD. It is the first reduction in exchange rates that the Iraqi government has made in decades.

The exchange rate of the USD against the IQD has been nosediving over the past few days. The drop is fueled by the demands to reconsider the new rate amid the recovery of oil prices, which constitute the largest bulk of Iraq's income.