There are a lot of things happening in Iraq that are contributing to the growth of their economy and the strengthening of their currency. If Iraq could just get out of their own way.
I haven't been this excited about Iraq in a long time. I remember in 2019 they were really striving, making great steps and then everything kind of fell apart and then we had the whole "Rona" thing took place and it just seemed like they could not get their head above water. But this past year, everything is looking pretty good.
We know the beginning of 2024, we heard anyways, we'll see if it actually happens, Iraq is no longer going to use the US dollar in the country. That will lower the demand for US dollars but that still doesn't curve the demand for US dollars that are being smuggled into other countries.
It will decrease the demand for US dollars and increase the demand for Iraqi dinars. This is really good.
US Dollar Strengthens Against Iraqi Dinar in Baghdad and Erbil Markets, 16 nov
In a noteworthy economic development, the US dollar has seen a significant rise in value against the Iraqi dinar in the markets of Baghdad and Erbil. The exchange rate in Baghdad’s Al-Kifah and Al-Harithiya stock exchanges hit 157,850 dinars for 100 US dollars, escalating from the earlier rate of 156,500 dinars. Responding to this change, local exchange shops in Baghdad revised their rates, with the selling price surging to 158,750 dinars and the buying price set at 156,750 dinars for every 100 US dollars.
Impact on Erbil’s Market
In Erbil, the market too demonstrated similar behavior, with the selling price recorded at 158,500 dinars and the purchasing price at 158,400 dinars for every 100 US dollars. These fluctuations in currency exchange rates offer a mirror to the economic dynamics within Iraq and hint at potential implications for various sectors, including business and trade.
Factors Influencing Currency Fluctuations
Economic expert, Nabil Al-Marsoumi, forecasts a future spike in the dollar’s price, attributing it to unresolved issues related to trade with Iran and Syria. Contributing factors such as the dual tax and customs tariff systems in Iraq, unauthorized ports, inadequate control over official border ports, and the distribution of goods beyond the electronic platform, also play a significant role in these currency rate fluctuations.
Relevance and Implications
The surge in US dollar prices in both Baghdad and Erbil markets holds high relevance, underscoring the intricate dance of global economics. These fluctuations not only affect the Iraqi economy but also hold implications for international trade and finance, making it a topic of global relevance. As the situation continues to evolve, market watchers and stakeholders alike will be keeping a close eye on this economic saga.
Iraq’s Political Consensus Complicated by Power Struggle, Unrest Continues in Gaza
Political stability in Iraq hangs in the balance as the government and Parliament scramble to reach a “consensus deal” for the redistribution of positions. The country is on thin ice, especially considering the suspension of parliamentary work by ministers and deputies of the “Progress” coalition after the dismissal of Speaker Mohammed al-Halbousi. This predicament threatens to reignite the unrest that preceded and followed the rise of ISIS, echoing the turmoil of the past.
Disruption of Consensual Governance
Prime Minister Sudanese’s government, known for its calm demeanor and avoidance of political skirmishes, took office a year back in October. Riding on the rare wave of political and security stability, the government turned its attention to the crumbling services in Iraq. Their strategy was to combat the state’s chronic failures that have been plaguing Iraq for over two decades. But the judicial decision to dismiss al-Halbousi disrupted this relative tranquility. The dismissal toppled one of the three pillars (legislative, executive, and judiciary) that spearhead the consensual governance in Iraq, thereby complicating the political consensus.
The Aftermath
The dismissal of al-Halbousi, backed by Sunni provinces, has stirred the hornet’s nest. The Supreme Federal Court’s decision has been contested by al-Halbousi as unconstitutional. This has set the stage for a long-drawn legal and political battle that could destabilize the country and affect the scheduled local elections.
Separate Unrest in Gaza
Meanwhile, the situation in Gaza remains dire. The Palestinian Red Crescent reported an attack by Israeli forces on al-Maqadma Hospital, one of Gaza’s oldest. The forces surrounded the hospital with tanks, preventing medical crews from aiding the injured. The hospital had been shelled last October, resulting in approximately 500 deaths and 600 injuries. The current circumstances in Gaza are made worse by fuel shortages and the halt of hospital operations due to the Israeli blockade.
The Hydro-Carbon Law will require an international exchange rate. The 2023, 24, 25 budget will require it. The salaries and the payment to the citizens will require it. The WTO will require one. The house contracts will require one. The Development Road Projects, economic and financial reforms,all of them are going to require an international acceptable Article VIII compliant exchange rate...
What the WTO and the world want to see is that Iraq is a balanced nation ...
They need to produce. I'm talking about industry...Development Road Program, the Silk Road Initiative. All of that's coming together and coming into play to be able to prove to the world Iraq is ready to stand on her own two fee and start doing trade and be that additional bread basket to the world...
We've heard this about different currencies. Iraq's going to be trading outside the dollar. They're going to be using different currencies...They're going to be on a level playing field...
Iraq's been working through an international interconnectivity system the ITC, The World Bank, the Bank of International Settlements, the central banks of the world, the federal Reserve Bank. It isn't just a push the button situation...it's a complex process.
Iraqi Financial Expert Predicts Further Decline in Dollar Exchange Rate
Shafaq News/ Financial and economic expert Abdul Rahman Al-Mashhadani has predicted a new decline in the dollar exchange rate in Iraq, reaching 145,000 Iraqi dinars against 100 dollars.
He attributes this forecast to measures the Central Bank of Iraq took in collaboration with the Federal Reserve Bank.
Speaking to Shafaq News Agency, Al-Mashhadani highlights the recent meeting in Abu Dhabi, where ten banks were authorized to carry out transfer operations directly through correspondent banks, including American banks JP Morgan and Citibank. He explains that this move aims to expedite transfer processes, bypassing the electronic platform of the Central Bank and avoiding scrutiny from the Federal Reserve Bank.
Additionally, Al-Mashhadani notes that the Central Bank has allowed banks to import remittances belonging to foreign companies, international organizations, and diplomatic missions operating in Iraq through Iraqi banks. This move is expected to facilitate the payment of salaries and contracts, with the first shipment worth $100 million entering the local parallel market. The funds will be used to pay workers in these companies and cover contracts with Iraqi suppliers, contributing to increased spending in Iraqi dinars.
The Central Bank Of Iraq Agrees To Import The Dollar To Meet The Needs Of Citizens, 16 nov
November 15, 2023 Last updated: November 15, 2023 Al-Independent/- A government source revealed, today, Wednesday, that the Central Bank of Iraq issued official approvals to three Iraqi private banks to import the US dollar to meet the needs of citizens, confirming that one of the banks’ shipments had actually arrived in Iraq.
This decision comes within the framework of the efforts made by the Central Bank of Iraq to enhance the stability of the Iraqi dinar exchange rate, and to provide the dollar in sufficient quantities to meet the needs of the local market.
According to the source, the private banks that obtained approvals are:
National Bank of Iraq Ahli United Bank Trade Bank of Iraq (TBI) The source explained that these banks will import the US dollar through the electronic money transfer platform recently launched by the Central Bank of Iraq, with the aim of ensuring transparency and preventing currency speculation.
According to the source, there are applications from other banks that are on their way to be submitted for decision by the Central Bank of Iraq.
The source confirmed that the Trade Bank of Iraq (TBI) is currently holding important discussions with several international companies to transfer amounts amounting to $120 million, and
they are on their way to completion within the next few days.
The source expected that this decision would stabilize the exchange rate of the Iraqi dinar, and provide the dollar in sufficient quantities to meet the needs of the local market.
The impact of the decision on the Iraqi economy
It is expected that this decision will have a positive impact on the Iraqi economy, as
it will stabilize the exchange rate of the Iraqi dinar, and
provide the dollar in sufficient quantities to meet the needs of the local market.
According to the economic expert, Dr. Ahmed Ismail, this decision will contribute to reducing the demand for the dollar in the local market, and thus reducing the exchange rate of the Iraqi dinar against the dollar.
This decision will also provide the dollar in sufficient quantities to meet the needs of companies and investors, which will contribute to increasing foreign investments in Iraq.
