Dollar Prices in Baghdad and Erbil Decrease: An In-depth Analysis of the Iraqi Economy, 12 OCT

 Dollar Prices in Baghdad and Erbil Decrease: An In-depth Analysis of the Iraqi Economy, 12 OCT

In a wave of relief for the markets of Baghdad and Erbil, two major cities in Iraq, the US dollar has experienced a significant decrease in value. This development is set against a backdrop of recent fluctuations that have triggered concerns about the overall economy of Iraq.

Unraveling the Dollar’s Decline

The decline in the dollar’s value has been observed not only in the Al-Kifah and Al-Harithiya central stock exchanges in Baghdad but also in local markets. Exchange shops have followed suit, reflecting lower selling and purchase prices for the dollar. The exchange rate, which once reached a peak of 156,200 Iraqi dinars for every 100 dollars, has seen a noticeable drop compared to the previous day’s rate of 154,600 dinars for every 100 dollars.

Central Bank’s Role in Strengthening the Dinar

The Central Bank of Iraq has implemented a plan to strengthen the value of the Iraqi dinar against the US dollar. This includes measures such as reducing the exchange rate for travel or internet purchases from 1,470 dinars to 1,465 dinars. The bank is also striving to help private banks strengthen their foreign currency reserves by diversifying their holdings beyond the US dollar. It has specifically mentioned the Chinese yuan, the euro, the Emirati dirham, and the Jordanian dinar. Moreover, government banks will sell foreign currencies for purposes such as travel, medical treatment, and study.

Implications of the Rising Dollar Value

While Iraqis who are paid in dollars may have increased purchasing power due to the declining dollar value, those paid in dinars may experience a loss of purchasing power as imports and exports are paid for in dollars. The devaluation also means that imported goods become more expensive in the local currency. These factors are critical to consider given the economic challenges that Iraq has faced in recent years.

Potential Future Ramifications

The future implications of the dollar’s value in Iraq are complex and far-reaching. The country has encountered numerous economic challenges, including internal divisions, economic uncertainties, and external threats. The Kurdistan Regional Government (KRG) has also played a significant role in Iraq’s economy, experiencing its own economic boom and bust cycles. However, the KRG faces challenges such as internal divisions, weak institutions, and a lack of a clear vision for its future.

As Iraq navigates these economic changes, it is crucial to closely monitor the strategies used to strengthen the dinar and mitigate the impact of currency devaluation. The outcome of these efforts will shape Iraq’s economic future and impact the lives of its citizens. Moreover, adherence to decisions from the American Treasury is seen as necessary for Iraq’s best interest.

https://bnn.network/world/iraq/dollar-prices-in-baghdad-and-erbil-decrease-an-in-depth-analysis-of-the-iraqi-economy/