DINAR REVALUATION REPORT : ALL THE TRANSACTIONS BETWEEN IRAN & IRAQ HAS BEEN IN IRANIAN RIALS, 28 AUGUST

 Revealing the Main Currency Used in Iran's Trade With Iraq in 2024

The Bilateral Trade Landscape

In the dynamic landscape of bilateral trade between Iran and Iraq as of August 2024. 1 the currency in focus for transactions has been the Iranian Rial. Shaaban Forotan, a member of the Board of Directors of the Joint Iranian-Iraqi Chamber of Commerce, has revealed that the majority of trade activities between the two nations, particularly at the level of traders and exporters, are conducted using the Iranian Rial. 6

The Shift in Currency Preference

This significant shift towards the Iranian Rial in bilateral trade is indicative of a strategic move to bypass certain economic challenges. While the dollar has traditionally been a dominant currency in international trade, the current trend shows a notable departure from this norm. Financial transactions between Iraq and Iran have increasingly favored the Rial, with traders and exporters opting to conduct their business in this currency.  6

The Role of Sanctions

The preference for the Rial can be attributed, in part, to the sanctions imposed on Iranian banks, which have complicated transactions in other currencies. 6This has led to a practical adaptation by traders who have found alternative methods to settle their accounts through their networks in Iraq, Iran, or third countries such as the United Arab Emirates, without direct recourse to dollar transactions. 6

Challenges and Opportunities

Despite the challenges posed by fluctuating prices of Iranian goods in the Iraqi market.  6 the increasing reliance on the Rial within bilateral trade offers potential opportunities for both economies. The move not only reflects a strategic response to external pressures but also highlights the resilience and adaptability of the trading relationship between Iran and Iraq. 1

Conclusion

As of August 2024, the Iranian Rial has emerged as the main currency used in the trade between Iran and Iraq. This development underscores the evolving nature of bilateral trade dynamics and the strategic adaptations made by traders and exporters in response to prevailing economic conditions and sanctions. 1