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馃毃馃嚠馃嚩 IRAQI DINAR UNDER PRESSURE — BUT THE CBI HAS A STRATEGY! 馃挼馃搲馃彟
馃摙 LATEST NEWS: The Iraqi dinar has weakened further against the US dollar in the parallel market, with the rate reportedly reaching 154,000 IQD per $100, or approximately 1,540 IQD per $1.
Meanwhile, the Central Bank of Iraq’s official rate remains significantly stronger, around 1,310 IQD per $1.
⚠️ This creates a substantial gap between the official exchange rate and the parallel-market rate—and this is exactly why the CBI has been working to reduce that gap.
馃攷 HERE’S THE BIGGER PICTURE:
The CBI’s strategy is focused on reducing the difference between the official and parallel-market rates, strengthening the banking sector, expanding digital payments, improving access to foreign currency through the formal system, and moving more financial activity into regulated channels. 馃彟馃挸馃嚠馃嚩
The objective is clear: strengthen the formal financial system and reduce Iraq’s dependence on the parallel market.
馃搲 REDUCE THE GAP
➡️ Strengthen the banking system
➡️ Increase formal financial transactions
➡️ Reduce dependence on the parallel market
➡️ Improve monetary stability
➡️ Build a stronger foundation for future monetary reform
馃挕 NOW IMAGINE THIS:
What if Iraq revalued the dinar RIGHT NOW, while this parallel market still existed?
Look at what just happened! 馃憖
The parallel market reduced the dinar’s market value almost overnight—literally in the blink of an eye.
Now imagine Iraq announcing a major revaluation while a large parallel market is still operating. Even if the dinar initially received a much higher official value, there would be a risk that market forces and a persistent parallel market could create significant pressure on that new rate.
馃敟 DO YOU SEE NOW WHY CLOSING THE GAP AND REDUCING THE PARALLEL MARKET MATTERS?
Iraq does not want to establish a new, stronger value for the dinar only to see that value come under pressure because a parallel market continues operating outside the formal financial system.
This is why the banking reforms, digitalization, foreign-exchange reforms, and efforts to bring currency transactions into the formal system are so important. 馃彟馃嚠馃嚩
馃挵 MY VIEW: The current weakness in the parallel market may actually demonstrate why these reforms are necessary.
Before any major currency reform could realistically succeed, Iraq needs greater monetary stability and a much smaller gap between the official and market rates.
馃嚠馃嚩馃敟 THE GOAL IS NOT JUST TO CHANGE THE NUMBER ON THE EXCHANGE RATE—IT IS TO BUILD A FINANCIAL SYSTEM CAPABLE OF SUPPORTING AND MAINTAINING THAT VALUE.
One step at a time. The reforms matter.
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