Iraqi analyst reveals fate of Baghdad’s economic crisis
In continuation of the crisis experienced by the State of Iraq, the Iraqi streets witnessed mass demonstrations, Wednesday, in front of the Iraqi Central Bank, in protest of the continuous depreciation of the dinar’s exchange rate against the dollar. Demonstrators demanded the government to take quick measures to control the dinar’s price, which has dropped to levels exceeding 1,600 dinars per dollar, the lowest level in the Iraqi currency in 18 years.
Rising prices
Iraqi reports said the continued decline in the dinar’s price has led to major spikes in the prices of food, goods and services. This has raised many questions about the reasons for this exchange-rate decline, despite the central bank’s monetary reserves having risen by as much as $100 billion.
Major crises
Dr. Abdul Karim Al-Wazen, an Iraqi political analyst, says: The crisis in Iraq is due to the sanctions imposed by the Federal Bank of the United States on Iraqi banks, which have led to this rise. Those dealing with these banned banks have become without official cover, so they have resorted to the parallel market, which caused an increase in demand for the dollar. He confirmed that Iraq is currently between two crises, an attempt by the United States to take control of it, and smuggling operations in Tehran.
The Iraqi political analyst added that Iraq is in an economic crisis due to the dollar and the devaluation of the Iraqi dinar, which prompted Prime Minister Mohammed Shia’ Al Sudani to dismiss the Central Bank governor in an attempt to correct the difficult economic conditions the country is currently going through.
He pointed out that at the root of the crisis is the amount of dollars that was being smuggled from Iraq to Tehran, which has caused intense American anger towards Iraq at the present time. He pointed out that speculation in the exchange rates of the dollar must end, and urgent economic measures must be taken to restore the exchange rate of the dollar within the official context and to hold the corrupt accountable.
Bank governor exemption
The exchange rate of the US dollar against the Iraqi dinar has increased gradually since November 2022, reaching its highest level in recent days, when it exceeded 165,000 dinars per $100. Two days ago, Iraqi Prime Minister Mohammed Shia’ Al Sudani exempted the governor of the Iraqi Central Bank, following a decline of several weeks in the value of the Iraqi dinar.
