Current Exchange Dynamics of the Iraqi Dinar
The value of the US dollar is currently trading at less than 150,000 Iraqi dinars, marking a notable first for this year. This fluctuation in exchange rate reflects significant economic activity and market adjustments within Iraq.
As of now, the exchange rate stands at 147 dinars per dollar, with several factors contributing to the strengthening of the dinar. According to Jamal Kochar, a member of the Iraqi parliament’s finance committee, an increase in the availability of dollars in the domestic market has played a crucial role in this development. “The central bank has injected more dollars into the market compared to previous days, resulting in an appreciation of the dinar’s value,” Kochar stated.
Since February 23, the Central Bank has conducted multiple transactions, amounting to an average of $1.448 billion. Kochar also noted that the central bank’s strategy of selling dollars through banks, rather than solely relying on an electronic platform, has positively influenced the dinar’s valuation against the dollar.
Moreover, since December 1, the central bank has prioritized dollar sales for foreign remittances. Out of the total dollar sales since February 23, approximately $1.3 billion has been allocated for such remittances, which directly reinforces the dinar’s strength against the dollar.
The central bank has also been selling dollars to various sectors, including 1,310 foreign traders and 1,305 tourists.
Beyond these factors, other measures instituted by the central bank, such as the introduction of new financial instruments, have further enhanced the dinar’s performance. Sarwat Jaff highlighted that there are four types of payment documents offered, ranging from 500,000 dinars to one million dinars and for durations of four years, with interest rates between 7.5% and 8.5%.
Additionally, the central bank has initiated investment schemes allowing individuals to deposit funds in dinars through options such as day, night, and monthly investment plans. This move has spurred more activity among banks, thereby boosting the demand for dinars and further elevating its value relative to the dollar.
In summary, the strategic initiatives launched by the Central Bank of Iraq have significantly influenced the current economic landscape, fostering an environment conducive to the appreciation of the Iraqi dinar and enhancing overall market stability.
