Shafaq News/ Economic expert Nabil Al-Marsoumi warned, on Wednesday, of the growing disparity between the parallel market exchange rate of the US dollar and the official rate set by the Central Bank of Iraq (CBI), and its potential impact on the Iraqi market.
Al-Marsoumi stated, "If traveler dollars actually reach travelers, the parallel dollar will soar, widening the gap between it and the official dollar." He explained that "a significant portion of the cash dollars will be hoarded by travelers, reducing the available supply of cash dollars typically used to fund private sector imports of Iranian goods and cover the needs of travelers to countries under US sanctions."
Al-Marsoumi added that "if the cash dollar exceeds 1,600 IQD per dollar, this will significantly undermine the competitiveness of Iranian goods in the Iraqi market."
Notably, the exchange rate of the US dollar against the Iraqi dinar has risen following CBI's decision to allocate dollars to travelers exclusively at airports and issue instructions to currency exchange companies accordingly.
I think Sudani is in control of the monetary reform. I think he has security and stability and I think the international world knows it.
I think all the three letter agencies are in cahoots...with the CBI...GOI to go ahead and launch the new exchange rate...I think the exchange rate is either going to float at a fixed rate or it's going to float at a low rate then take some time to grow and be capped.
If it's fixed at an RI rate then you know it's not going to float very much because the distance between $3.22 to...where they want to cap it it's not that far and the demand will allow the gap to be reached very quickly
.
If it comes out at $3.22 you think I'm gonna wait around for a float? No.
Question: "During the float how much time will pass between each float as the amount increases?"
We're looking at anywhere from 3 to 6 months. But if they are generous we may be looking from 6 months to a year. I pray that's the case because if they don't give us at least 3 months, if they give us one month, we're not going to be able to take advantage of the float.
Shafaq News: On Wednesday, the Secretary-General of the Joint Iraqi-Iranian Chamber of Commerce, Jahanbakhsh Sanjabi, confirmed that Iranian exports to Iraq rose by 30% in the first nine months of this year (Iranian year starts on March 21), highlighting Tehran's significant role in the Iraqi market.
According to a report from an Iranian website, sanctions impose significant costs on Iranian businessmen.
Sanjabi stated that Iran loses 180 dinars per dollar because the CBI does not deliver the official currency to Iran and the money changers provide it at market rates.
“Iran's exports to Iraq in 2023 exceeded $10 billion, and the trade balance with Iraq was 95% positive in favor of Iran,” he pointed out, noting that “this highlights a significant yet potentially less competitive market that requires sustainable solutions to address potential challenges and conflicts.
”
Regarding the resources stored by Iran in Iraq, he said, "I'm not discussing specific numbers, but there are significant resources stored. It pertains to Iran's dinar reserves. There's no restriction on its use within Iran or other countries, but complexities arise when converting dinar to other currencies."
He noted that Iranian money remains in Iraq largely because the dinar isn't widely accepted by businessmen. He questioned, "Where can we exchange dinar? Which country accepts dinar in exchange for goods?" affirming that “this difficulty contributes to the challenge of returning Iranian currencies.”
In this context, he explained, "To transfer money from an Iraqi bank or ATM to a beneficiary outside the five banned countries, the Central Bank of Iraq will provide currency at a rate of 1,320 dinars per dollar.
However, transfers to any of the sanctioned countries require obtaining currency from the stock exchange at a rate of 1,500 dinars per dollar."
Moreover, "The exchange rate difference costs us 180 dinars per dollar. This cost can be borne by either the Iranian exporter or the Iraqi importer, depending on the contract type. If we opt to purchase a currency other than the dinar, we incur a loss of 180 dinars per dollar," he stated.
Sanjabi emphasized, "This is our top challenge in the Iraqi market today. Despite this, Iran's exports to Iraq have grown by 30% in the past nine months, showing our stability in this market. This means we can maintain our presence here despite additional costs."
“Vietnam targeting Q3 GDP growth of 6.5%-7%, inflation below 4.5% PM says” And this is just the third quarter. They are obliterating the US…this is big…and they are under pressure to raise their exchange rate.
[Reference Frank26 post 7-8-2024 re: HCL below] 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.
Deputy Prime Minister and Foreign Minister Fouad Hussein arrived in Washington to participate in the NATO Summit 2024.
“This participation comes at the official invitation of the Iraqi government on the occasion of the 75th anniversary of the establishment of the coalition,” the Foreign Ministry said in a statement.
The summit will discuss a range of important issues, including global security challenges and military cooperation.