Shafaq News/ The rise in the US dollar exchange rate against the Iraqi dinar in the parallel market is attributed to certain financial measures taken by the Central Bank of Iraq (CBI), said Jabbar Koran, the official spokesperson for the currency market in Al-Sulaimaniyah, on Tuesday.
"The surge in the dollar's exchange rate against the dinar is linked to the CBI's financial measures," Koran explained to Shafaq News Agency, "The Central Bank had previously taken some effective measures, but the current increase is due to other steps that have not yet been implemented. Among them is the decision by the bank to expand foreign transactions beyond the US dollar, which has not yet been enacted."
Koran also pointed out that the Central Bank has not integrated all banks into the electronic platform, limiting operations to only seven banks. These seven banks, he said, are insufficient to handle Iraq's annual foreign trade volume of approximately $50 billion. "I do not expect these banks to accommodate this volume of trade," he noted.
Another factor contributing to the dollar's rise is the reduction in cash injection by the Central Bank, with the exception of today, Tuesday. "The current demand for dollars is abnormal. I do not believe that opening a dollar exchange window for travelers at airports is the reason for the increase, even though it is travel season," Koran added.
Koran also highlighted the large number of exchange offices and companies in Iraq and the Kurdistan Region, that the Central Bank cannot meet the demand for dollars. "There are about 1,200 exchange companies in Iraq and around 2,500 in Kurdistan. These companies have not yet merged to form about 400 operational companies. All these companies and offices need more than $50 million daily," he said.
Koran excluded the scenario of the recent increase linked to a political or economic crisis or external factors. He believes that the Central Bank can control this rise, predicting that the exchange rate could climb to over 150,000 dinars per 100 dollars. However, he ruled out the possibility of the rate reaching the extreme levels seen in previous periods.
I will agree with that. And it certainly matches with some of the news I got from Iraq today. I was told from day one that when we see the HCL…within hours - we will see the new rate.
My contact in Iraq works in a government position. He has made the comment that they have a new rate…and will activate it soon. That comes directly from Iraq.
I’m expecting a lot of news throughout the week…i am expecting we will have an extremely busy 4-7 days right now. There are a number of groups with expectations for around the 12th. Everything appears to be lining up...I’m praying this is our week. I have extreme anticipation for this week.
FRANK26: "THE MONETARY REFORM CONTROLS THE US DOLLAR IN IRAQ... TO PREPARE FOR THE LOWER NOTES & A NEW EXCHANGE RATE"..............F26
The dollar's flight does not threaten the dinar.. Al-Sudani's advisor dispels fears: The dollar system is a thing of the past
7/8/2024
The financial and economic advisor to the Iraqi Prime Minister, Mazhar Mohammed Salih, commented on Monday on the return of the rise in the exchange rate of the US dollar against the Iraqi dinar in local markets.
Saleh explained to Shafaq News Agency, "The fixed exchange rate system in Iraq is based on an international reserves base that is the highest in the history of Iraq and its monetary policy, as foreign currency covers more than 100% of the total currency currently issued."
He added that "given the strength of the official central exchange market, the exchange rate of the dollar to the dinar in the parallel market today in the country does not constitute any relative importance in influencing the stability of the general price level, which has become stable in its components and trends due to the influence of the official exchange rate factor currently dominating the financing of foreign trade (imports) amounting to 1320 dinars per dollar, which is a stable trend for the exchange rate and around which the stable external value of the dinar revolves, which is embodied by the state of stability of the relative prices of goods and services to a large extent, as the annual inflation in the country does not exceed 3%."
According to Saleh, based on the above, and in light of the strength of the foreign reserves supporting the Iraqi dinar, the value of which as liquid foreign assets exceeds $100 billion, the official exchange market, as a general trend, will remain dominant in containing any colored noise or ambiguous information that affects the parallel exchange market in short periods due to urgent international or regional political events here and there or in adapting some instructions regulating the monetary market.
Al-Sudani's financial advisor said that after the decline of the dollarization phenomenon in domestic transactions, especially in contracts, obligations and payments inside the country since last year and its legal prohibition, the parallel exchange market has become such that its general effects today only form a narrow economic scope of prohibited transactions practiced by informal markets and at a rate of 10% of the total supply and demand transactions for the currency.
Saleh stressed that "the stability of the exchange rate of the dinar to the dollar that the country is witnessing, even in the secondary markets above, is a real and solid stability.Rather, it is derived from the strength of the impact of the price and quantity factors of the monetary and financial policies and their integration in imposing overall price stability in the country and containing the inflationary expectations that were caused by the forces of the parallel exchange market during the past years."
The financial advisor concluded his speech by pointing out that “the secondary (irregular) market, due to the freedom of external transfer, is under the influence of the official exchange market rate, whose operations are constantly expanding in favor of dealing at the fixed official exchange rate.”
Exchange companies announce a "general strike" in all Iraqi governorates
7/8/2024
The Coordination Committee for Exchange Companies Demonstrations announced a general strike in the capital, Baghdad.
The coordination committee stated in a statement received by Shafaq News Agency, "Given the insistence of the Central Bank of Iraq on harming companies and pushing them to the forbidden, and its disregard for the legitimate demands submitted by exchange companies that are in accordance with the law, and after holding an expanded meeting of exchange companies, it was decided to start a general strike and complete closure."
She confirmed that she will refrain from "entering the auction from next Wednesday, corresponding to 7/10/2024, until further notice, for all governorates."
An emergency meeting about the dollar in the Sudanese office shortly
7/8/2024
Baghdad –
A source in Baghdad confirmed that the Prime Minister Muhammad Shiaa Al-Sudani will meet, on Monday evening, with representatives of a number of exchange companies, against the background of the high exchange rate of the dollar, and the recent Central Bank measures، About restricting the granting of dollars to airport travelers, and the announcement of a number of companies to strike on Wednesday and Thursday.
Iraqi exchange companies have suspended their strike indefinitely after the Central Bank decided to start the strike starting tomorrow.
The companies have reached an agreement with the central bank and the prime minister's office to take new measures.
“As of July 14, all tourists can exchange $100 at KRG airports through transaction offices (Rayan, Finjan, Sama, Qand),” the Central Bank said on November 4.
The decision sparked protests from foreign exchange offices, which said they had "problems with the fact that only four offices were allocated".
Exchange offices had decided to go on strike starting on Wednesday, which led to the dollar's value rising in recent days.
But after a meeting with the Iraqi Prime Minister and coordination with the Central Bank, the strike was suspended indefinitely and they are awaiting new measures from the Central Bank.