Impact of Currency Fluctuations on Iranian Toman Traders in Iraq
Delir Hussein, a trader in the Iranian Toman, has highlighted the adverse effects of the ongoing depreciation of the currency on traders and speculators alike. He reports that some individuals have experienced losses exceeding $40,000 within a matter of weeks due to the unstable market conditions.
Hussein emphasizes that the exchange market in Sulaymaniyah is a principal hub for the buying and selling of Iranian Toman in Iraq, indicating its significant role within the regional economy.
Sanctions and Their Economic Repercussions
Economic, commercial, and military sanctions imposed by the United States on Iran have been ongoing for decades, aimed at curbing the nation’s nuclear ambitions, its support for terrorism, and human rights violations. These sanctions target vital areas including Iran’s nuclear developments, defense capabilities, government officials, and banking sectors.
Exchange Market Dynamics
Hossam Berzanji, head of the Kurdistan Economic Development Organization, elaborates on the mechanisms of currency exchange in Sulaymaniyah. He explains that transactions predominantly occur through two methods: direct monetary purchases and deferred payment arrangements, known as "antenna deals." In this second method, buyers agree on a price with sellers without immediate payment, speculating that the currency’s value would appreciate in the near future.
Berzanji notes that the profitability or loss from these transactions is largely dictated by fluctuations in the exchange rate and is influenced by demand for currency as well as the prevailing political and economic landscape in both Iran and the Kurdistan region. He acknowledges the risks involved, characterizing these deferred deals as bordering on speculative gambling.
Call for Regulatory Measures
Berzanji calls on authorities to intervene and regulate these types of transactions due to the financial risks and emerging social problems they pose. He points out that traders of Toman in the local exchange market are facing significant daily losses—sometimes thousands of dollars—due to the persistent decline in the exchange rate coupled with fraudulent practices from Iranian merchants and speculators.
One notable scheme that has led to substantial losses among Iraqi merchants involves Iranian traders engaging in enticing commercial agreements for goods, only to disappear or declare bankruptcy after receiving payment. This has resulted in the loss of trust between Kurdish and Iranian merchants.
New Sanctions by the U.S.
Most recently, in October 2024, the United States introduced a new wave of sanctions targeting Iran’s oil and petrochemical sectors in response to Iranian missile attacks on Israel. The U.S. Treasury has stated that these measures aim to enhance financial pressure on Iran, restricting the regime’s abilities to leverage profits from vital energy exports for destabilizing activities in the region and against U.S. interests.
This escalation underscores the complex interplay of currency values, trade practices, and international sanctions, which collectively contribute to significant challenges for traders within the Iranian Toman market, particularly in Iraq.