The Journey Of The Dollar In Iraq To The Latest Reports And The Corridors Of Banks Increases Citizen Anxiety
January 12, 2024 Baghdad/Al-Masala Al-Hadath: The Iraqis expressed their deep concern about the turmoil in the US dollar exchange market, as the exchange rates witness continuous fluctuations around the clock, despite the attempts of the Central Bank of Iraq to control them and return to the approved official exchange rate of 132 thousand dinars for every 100 dollars.
Citizen Ali Al-Hassani said, “Exchange rate fluctuations have become a source of great concern for citizens, as they directly affect their purchasing power, especially in light of the continuous rise in the prices of goods and services.”
He added, “The government is required to take urgent measures to control the exchange rate and protect citizens from the consequences of turmoil in the financial markets.”
For his part, economic expert Yasser Al-Mutawali said, “The disturbances in the dollar exchange market are due to several reasons, most notably the continuation of the war in Ukraine, the rise in oil prices, and the decline in the value of the Iraqi dinar against the dollar.”
He added, "These factors directly affect the Iraqi economy, and lead to high inflation rates, and an increase in poverty and unemployment."
He pointed out that “the government is required to take effective economic measures to confront these challenges and protect the Iraqi economy from global turmoil.”
The economic expert stressed that “continued disturbances in the dollar exchange market will lead to destabilization of the country’s political and social stability, and will increase the already high rates of poverty, unemployment, and high prices.”
He called on the government to “take quick and urgent measures to control the exchange rate and protect citizens from the consequences of turmoil in the financial markets.”
On February 7, 2023, one hundred days after assuming the presidency of the government, Prime Minister Muhammad Shiaa Al-Sudani confirmed that “the currency window was a black spot in the banking system,” pointing to “the vote on the Central Bank’s request to adjust the exchange rate to 1,300 dinars for every one dollar.” .
The turmoil in the dollar exchange market is a worrying phenomenon that greatly affects the lives of Iraqi citizens. Constant fluctuations in prices make it difficult for citizens to determine the costs of their daily lives and plan their financial future.
Moreover, these disruptions severely undermine confidence in the financial system and pose a major challenge to the government's efforts to achieve economic stability.
The efforts of the Central Bank are evident in its attempts to address these fluctuations, as it seeks to return to the approved official exchange rate. However, it appears that these efforts still face major challenges, whether due to the effects of global economic conditions or internal challenges.
The state of instability in the dollar market is reflected in various aspects of Iraqi society’s life. Citizens live in a state of uncertainty about their financial future, and their concerns increase about the impact of these fluctuations on purchasing power and the extent of their impact on the standard of living. This concern is in addition to other economic and social challenges facing Iraqi society.
In light of this complex context, it appears that achieving stability in the dollar exchange market requires effective measures and international cooperation. This requires strengthening internal economic measures and adopting effective strategies to deal with international challenges.
The government must take the necessary measures to ensure market stability and reduce pressure on citizens, so that Iraq can achieve sustainable economic development and raise the standard of living for its citizens.
According to economists, the widening gap between the official and parallel rates of the dollar against the dinar weakens confidence in the local currency, reduces incentives to deposit money in Iraqi banks and prompts savers to exchange the dinar for the dollar, which leads to higher prices and a decrease in the real or purchasing value of the Iraqi currency.
On Tuesday, February 7, 2023, the Council of Ministers approved a decision to adjust the dollar exchange rate to 1,300 dinars. https://almasalah.com/archives/79126
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