Iraqi Residents Protest Surge in Dollar Exchange Rate Amidst Banking Concerns, 7 OCT
Residents of Erbil in Iraq have been gathering outside banking establishments, voicing their concerns over a sharp increase in the exchange rate of the US dollar. In an unprecedented surge, the exchange rate reached 158,750 dinars for 100 dollars in the selling market. However, the buying rate remained stable at 156,000 dinars.
Roots of the Issue
This surge in the exchange rate is attributed to the US blacklisting 14 Iraqi banks on suspicions of money laundering and funneling funds to Iran. The ban, imposed by the US Treasury Department and the Federal Reserve Bank of New York, has led to serious concerns about the Central Bank potentially reducing the cash sale of the dollar through currency auctions in Baghdad.
The Protesters and Their Demands
The protests have been organized by a group called Thuwar Tishreen (October Revolutionaries), which is connected to a movement that started mass protests in Iraq in 2019. Their demand is simple – the government must take action to halt inflation. The central bank chief, Ali al-Allaq, has stated that the rise in the street price of the dollar is due to the reluctance of certain merchants to use the official electronic platform for currency requests.
A Historical Perspective and Future Ramifications
This is not the first time the dinar has experienced a dive in value. Measures taken by the US in late 2022 to combat money laundering and the channeling of dollars to Iran and Syria severely restricted Iraq’s access to hard currency. The Iraqi Prime Minister, Mohammed Shia al Sudani, has met with al-Allaq to discuss measures to stabilize the dinar price against the dollar. If the current crisis isn’t deftly managed, experts fear it may bring about an economic downturn, further impacting the common citizens of Iraq. The ripple effects may be felt across the region, influencing economic and political dynamics.
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