Iranian exports surge 30% in Iraq amid currency challenges

Shafaq News: On Wednesday, the Secretary-General of the Joint Iraqi-Iranian Chamber of Commerce, Jahanbakhsh Sanjabi, confirmed that Iranian exports to Iraq rose by 30% in the first nine months of this year (Iranian year starts on March 21), highlighting Tehran's significant role in the Iraqi market.

According to a report from an Iranian website, sanctions impose significant costs on Iranian businessmen.

Sanjabi stated that Iran loses 180 dinars per dollar because the CBI does not deliver the official currency to Iran and the money changers provide it at market rates.

“Iran's exports to Iraq in 2023 exceeded $10 billion, and the trade balance with Iraq was 95% positive in favor of Iran,” he pointed out, noting that “this highlights a significant yet potentially less competitive market that requires sustainable solutions to address potential challenges and conflicts. ”

Regarding the resources stored by Iran in Iraq, he said, "I'm not discussing specific numbers, but there are significant resources stored. It pertains to Iran's dinar reserves. There's no restriction on its use within Iran or other countries, but complexities arise when converting dinar to other currencies."

He noted that Iranian money remains in Iraq largely because the dinar isn't widely accepted by businessmen. He questioned, "Where can we exchange dinar? Which country accepts dinar in exchange for goods?" affirming that “this difficulty contributes to the challenge of returning Iranian currencies.”

In this context, he explained, "To transfer money from an Iraqi bank or ATM to a beneficiary outside the five banned countries, the Central Bank of Iraq will provide currency at a rate of 1,320 dinars per dollar. However, transfers to any of the sanctioned countries require obtaining currency from the stock exchange at a rate of 1,500 dinars per dollar."

Moreover, "The exchange rate difference costs us 180 dinars per dollar. This cost can be borne by either the Iranian exporter or the Iraqi importer, depending on the contract type. If we opt to purchase a currency other than the dinar, we incur a loss of 180 dinars per dollar," he stated. 

Sanjabi emphasized, "This is our top challenge in the Iraqi market today. Despite this, Iran's exports to Iraq have grown by 30% in the past nine months, showing our stability in this market. This means we can maintain our presence here despite additional costs."