2025-05-08T10:46:58+00:00
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Shafaq News/ The Iraqi dinar has appreciably strengthened against the US dollar in the parallel markets. This improvement has arisen from a significant dip in demand for the latter.
According to Mudhhir Muhammad Salih, the financial and economic advisor to the Prime Minister, there are three pivotal reasons for the dinar’s recent upturn. The exchange rate has improved on average by 15% in recent weeks compared to the official benchmark.
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The Central Bank’s Role
A major contributing factor is the Central Bank of Iraq’s enhanced efficiency in facilitating foreign trade. The bank has sped up dollar transfers through top-rated international correspondent banks. Furthermore, they’ve increased trade transactions in euros, UAE dirhams, and Chinese yuan with trusted banks in key trade partner countries, such as the UAE, Turkiye, and China.
Reduced Trade Restrictions
The easing of restrictions on small-scale trade marks the second factor. Salih noted how over 60% of Iraq’s private imports come from small businesses. By cutting intermediary costs and providing direct access to foreign currency via accredited Iraqi banks, dependency on black-market channels has significantly diminished.
Rise of Digital Payments
Lastly, the increased use of digital payment cards by Iraqi travelers is noteworthy. Each traveler is permitted up to $3,000 in cash monthly at the official rate of 1,320 dinars per dollar. Larger sums can be accessed using debit, credit, or prepaid cards. This shift greatly reduces the necessity for unofficial currency dealers.
Market Dynamics and Investments
Salih pointed out how legal scrutiny on black-market transactions has dissuaded participation. Volatility in the dollar’s value has nudged people towards more secure investments. Gold and government bonds, offering guaranteed semi-annual interest, are now more attractive. These bonds are tradeable on Iraq’s secondary market.
Influence of Hypermarkets
The expanding network of hypermarkets across the country has also contributed to price stabilization for everyday goods. This undercuts the impact of parallel market rates on these essentials.
Speculation and Gold Purchases
Furthermore, there’s been a notable increase in gold purchases. It appears as a hedge against speculation about potential US decisions to discontinue certain dollar denominations. This growing trend signifies a shift in public trust from the dollar to more stable assets.
For further insights on currency shifts and financial news, visit resources like The Guardian and BBC News.
