Dollar Prices Falter Against The Dinar, And Parliament Finance Describes The Decline As Temporary
Posted On 12-28-2023 By Sotaliraq Haider Hisham The prices of the US dollar fell against the Iraqi dinar, yesterday, Wednesday, in Baghdad and Erbil with the closure of the stock exchange, as the prices of the dollar recorded a decline with the closure of the two main Kifah and Harithiya stock exchanges in Baghdad, reaching 151,500 Iraqi dinars against 100 dollars, while the same morning it recorded 152,750 Iraqi dinars against 100 dollars.
While selling prices in banking shops in local markets in Baghdad decreased, the selling price reached 152,500 dinars for 100 dollars, while the purchase price reached 150,500 dinars for 100 dollars.
The new development that occurred in the series of exchange rates was represented by the decline of the dollar against the dinar, especially in the Baghdad stock exchanges, where it abandoned prices exceeding 155 thousand dinars for every 100 dollars, and returned to the threshold of 148 or less, amid many popular and political questions about the real reasons for this. The decline, and will it continue or will it rise again?
Member of the Parliamentary Finance Committee, Mudar Al-Karawi, identified the most important factors that pushed the “opposite trend” of the parallel market in Iraq, while he considered the recent decline in exchange rates “temporary.”
Etiology
Al-Karawi said in an interview with Al-Mada, “The exchange rate of the dollar in the parallel market decreased by approximately 6% in two weeks and approached 148 thousand dinars for every 100 dollars.”
He added, “The Central Bank’s measures to deal with the main pressure factors on the parallel market pushed merchants and companies to the electronic platform to reduce smuggling opportunities,” noting “an attempt to push 13 active sectors in the country to replace their transactions from the dollar to the dinar, including buying and selling cars, for example.” For example, which worked to reduce demand in the parallel market.”
A member of the Finance Committee explains, “The recent decline in exchange rates is temporary; Because it depends on other points, including that 90% of the markets’ needs are met through import, meaning exporting currency abroad to fulfill financial pledges, which puts greater pressure on the hard currency.”
Al-Karawi points out that “the nature of dealings with neighboring countries, some of which suffer from sanctions, directly affects the parallel market.”
American side
The recent decline in exchange rates is the first of its kind in many months, but the real reasons have not been revealed until this moment, especially since merchants and citizens do not trust the government’s measures and quickly forgot the words of the Prime Minister, Muhammad Shiaa Al-Sudani, when he said, “The dinar is stronger than the dollar.” In turn, the researcher in economic affairs, Nabil Al-Ali, explains the real reasons for the recent decline in the dollar exchange rates in local markets, in relation to the relationship between the blog of the American ambassador to Iraq and the decline of the green currency.
Several days ago, the US Ambassador to Iraq, Elena Romanowski, confirmed that the US Treasury Department would continue its cooperation with the Central Bank of Iraq, while indicating that America would continue to provide dollar services to Iraq.
Citizen confidence
Al-Ali mentioned in an interview with (Al-Mada), that “the Iraqi government has tried for a long time to persuade citizens to fix the official price at 132 thousand per 100 dollars, but citizens do not trust government decisions, at a time when Washington’s ambassador to Iraq, Elena Romanski, is speaking in a blog post.” Small said that her country supports the Iraqi efforts, and sees the clear decline in exchange rates.
He points out that “public opinion and merchants are shifting their confidence towards external positions, and they have no confidence in the government,” considering this matter a “dangerous indicator.”
The economic affairs researcher continues: “There are no new measures by the Central Bank of Iraq to see the recent decline in prices affecting local markets,” pointing out that “there are government plans and procedures, but their impact will not be reflected directly.”
Al-Ali explains, “There is another factor causing the recent decline, which is the end of the fiscal year, and the large number of holidays and events, which leads to a decrease in the volume of trade, and in turn leads to a decrease in demand for the dollar, which prompted citizens to sell the dollar.”
He confirms that “this recent decline is relative, and may witness an increase or fluctuation during the coming period,” indicating that “the fate of the exchange rate is to decline and get closer to the official rate set by the government.”
During yesterday's transactions, Wednesday, the dollar exchange rates rose again with the opening of stock exchanges in the capital, Baghdad, where the price of 100 dollars reached more than 153 thousand dinars.
Wiggle
The US dollar is putting pressure on the Iraqi economy and exhausting its sectors due to its superiority over the dinar, despite the Central Bank providing more than a billion dollars weekly to finance commercial activities through the foreign currency selling window for 1,305 dinars per dollar.
Although the average Iraqi per capita income increased to 7 million dinars last year, the rise in prices of goods and commodities, as well as the fluctuation of exchange rates, raise more negative indicators in terms of poverty, inflation, and the level of recession.
The crisis of the dinar's exchange rates against the dollar is still ongoing in Iraq, since late last year, witnessing fluctuations despite measures taken by the country's central bank with the aim of stabilizing currency prices, while dollar prices recorded fluctuations in the previous two days after a modest decline, which turned the currency crisis into a nightmare that haunts Iraqis. LINK
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