What are the reasons for the decline in the dollar exchange rate against the Iraqi dinar?
On Thursday, April 24, 2025, Professor of International Economics Nawar Al-Saadi revealed the reasons for the decline in the exchange rate of the US dollar against the Iraqi dinar in local markets.
Local stock exchanges in the capital, Baghdad, witnessed a rise in the value of the dinar at closing this afternoon, with the selling price reaching 145,500 dinars per $100, and the buying price reaching 143,500 dinars per $100.
The dollar exchange rate in Iraqi markets rose significantly in the fall of 2024, exceeding 1,550 dinars per dollar, or 155,000 dinars per $100, in some areas.
Trump's policies
Al-Saadi told Al-Jabal, "The current decline in the US dollar's exchange rate cannot be isolated from the global economic and political context, which is undergoing profound transformations. The United States has been facing negative economic indicators for some time, including slowing growth and declining retail sales data, which has reinforced market expectations that the Federal Reserve may move to cut interest rates in the coming period. This trend, by its nature, weakens the dollar's attractiveness as a savings and investment currency and increases pressure on it in foreign exchange markets."
He added, "Furthermore, the economic policies recently adopted by the US administration, most notably the imposition of tariffs on a number of goods, have contributed to raising import costs and increasing inflation rates, which has negatively impacted investor confidence in the performance of the US economy in the medium term."
He continued: "In addition to internal factors, there are also global shifts that are gradually beginning to impact the dollar's standing," noting that "the accelerating trend by some international powers, such as the BRICS countries, toward reducing reliance on the dollar in trade and financial transactions reflects the beginning of the erosion of the monopoly position the dollar has enjoyed for decades. These multipolar policies are beginning to have a clear impact on the balance of monetary power worldwide."
internal factors
Regarding the situation in Iraq, according to the expert, "The recent decline in the dollar exchange rate is due to a decline in local demand during Ramadan, when commercial activity and travel decrease, leading to a temporary decline in demand for hard currency. However, this decline is not sustainable, and the dollar is likely to rise again when demand returns to normal levels, especially with the approach of the summer import seasons, or if obstacles arise in the flow of foreign currency into the Iraqi market."
The professor of international economics concluded his remarks by saying, "The decline in the dollar exchange rate we are seeing reflects a state of economic anxiety and uncertainty rather than a long-term strategic shift."
Al-Saadi stated that "the dollar will not easily lose its global standing, but it is no longer the unrivaled currency, and the world is gradually moving toward new monetary balances that will have profound repercussions for developing economies, including Iraq." link