Analysis of Recent Decline in Dollar Exchange Rates in Iraq
On Wednesday, prominent economist Abdul Rahman Al-Mashhadani outlined the factors contributing to the recent decrease in the exchange rate of the dollar in the Iraqi market. He anticipates that this trend may continue in the forthcoming days.
According to Al-Mashhadani, the primary driver behind the decline in the dollar’s value against the Iraqi dinar is the Central Bank’s increased sales, which have exceeded three million dollars daily. This substantial sale volume is aimed at satisfying the heightened demand for foreign trade financing facilitated through banks authorized by the American Federal Reserve, ultimately leading to a reduction in cash flow values within local financial markets.
Additionally, Al-Mashhadani noted that Iraq’s adherence to curtailing trade with Iran, in accordance with U.S. sanctions as reported in recent sources, is a significant influence on the exchange rate dynamics. The Central Bank of Iraq, in collaboration with the American Federal Reserve, has established twenty banks designated for financing commercial transactions using the U.S. dollar, euros, UAE dirhams, and Chinese yuan.
He emphasized that compliance by Iraqi institutions with government regulations designed to prevent dollar smuggling to countries under restrictions will have a beneficial impact on the stability of Iraq’s financial sector, thereby enhancing the value of the Iraqi dinar against foreign currencies.
The insights provided by Al-Mashhadani underscore the intricate interplay between regulatory frameworks and currency exchange rates in Iraq’s economy, reflecting broader implications for trade and financial stability in the region.
