By Investing In Black Oil...An Economic Expert Proposes A Solution To The Dollar Crisis In Iraq
Economy |Baghdad Today - Baghdad After the dollar exchange rate crisis worsened, and the situation got out of control in the parallel market in light of the inability of the government and the central bank to contain the crisis, economic expert Nabil Al-Marsoumi proposes a “solution through investing in black oil.”
During the past months, the dollar exchange rates witnessed a noticeable increase, exceeding 160 thousand dinars for every 100 dollars, which ignited the market and raised the prices of food and other commodities, in light of merchants’ fears of the losses that may befall them as a result of this rise.
Selling Black Oil
Al-Marsoumi said today, Sunday (November 5, 2023), that “Iraq’s exports of black oil in 2022 amounted to more than 4 billion dollars.”
The economic expert explained in a blog post followed by “Baghdad Today” that “Iraq can sell black oil in euros or Chinese yuan and use the amounts to settle commercial transactions with countries sanctioned by America, especially Iran.”
Al-Marsoumi pointed out that “if this happens, the exchange rate of the dollar in the parallel market will decline significantly,” pointing out that “this must be preceded by an understanding with the US Federal Bank and obtaining its approval.”
Trade Exchange With Iran
Iraq's imports from Iran annually amount to approximately 10 billion dollars, which is equivalent to 16% of Iraq's total annual imports amounting to 60 billion dollars annually, according to economic estimates.
Iranian trade with Iraq is facing many difficulties, the most important of which is financing and the possibility of obtaining the dollar, especially with the implementation of the platform in the Central Bank of Iraq, which prevents financing trade and sending money to Iran for the purpose of import.
This led to merchants importing from Iran rushing to buy the dollar from the parallel market and bearing an additional cost as a result of the high prices there, and amid these many difficulties.
On (October 31, 2023), an Iranian official revealed a decline in his country’s various exports to Iraq for several reasons, including the difference in the dollar exchange rate.
The former Secretary of the Iranian-Iraqi Chamber of Commerce said in a press statement, “One dollar for an Iranian merchant is equivalent to 1,600 Iraqi dinars, while this number for businessmen from other countries is 1,300 dinars, which is equivalent to the official price of Iraq,” stressing that “this difference in the price that... “Up to 15% is acceptable for Iranian businessmen, but exceeding that will make things more difficult.” LINK
