Iraqi PM's Visit to the US coincides with Dollar exchange rate crisis, 20 SEPT
Shafaq News/ Iraqi Prime Minister Muhammad Shia al-Sudani's visit to the United States to participate in the 78th UN General Assembly session is of significant timing. The visit coincides with a crisis in the country due to the rising exchange rate of the US dollar, with hopes that solutions may be found during his trip.
On the sidelines of the Assembly, PM Al-Sudani met the US Secretary of State Anthony Blinken, who extended an official invitation from President Joe Biden to visit the White House.
At this time, the dollar exchange rate in Iraqi local markets experiences volatile increases, nearly reaching 160,000 Iraqi dinars per 100 dollars.
According to experts, including the governor of the Central Bank of Iraq, internal and external factors influence this fluctuation.
A Iraqi House of Representatives member, Firas Al-Muslimaoui, told Shafaq News Agency that the internal factors include merchants avoiding taxes and acquiring dollars from the black market. There are also administrative obstacles, some requiring individuals to buy dollars to register a company.
The Central Bank has taken measures to address these issues, allowing individuals to buy dollars if they supply essential, genuine, and official goods. He said.
Smuggling is another internal factor; security efforts have led to the arrest of significant smuggling gangs moving dollars out of Iraq.
Al-Muslimaoui added that the external factors are related to US Treasury policies and are "beyond the control" of the Central Bank, hoping that Al-Sudani's current visit would contribute to addressing the dollar exchange rate, among other issues.
Ahmed Fouad Shukri, a financial affairs researcher, believes the dollar will continue to rise due to the government's inadequate measures to curb its increase.
Shukri explained to our Agency that despite the preventive or precautionary measures taken by the Iraqi government, such as banning dollar dealings within the local market, Iraq imports a significant portion of goods from neighboring countries subject to US sanctions, complicating trade exchange.
According to Shukri, other contributing factors include Iraq's high budget, leading to fears, negative expectations, and high inflation. Iraq's foreign debts also play a role in currency depreciation.
The impact of American sanctions, which may escalate, poses another significant threat to the Iraqi economy as financial transfers become restricted to the American Federal Reserve.