The Central Bank of Iraq revealed, on Friday, the reasons for the high exchange rate of the dollar against the dinar.
The Director General of the Financial Operations and Debt Management Department, Mahmoud Dagher said in a statement: “The high dollar exchange rate is due to the overlap of a set of expectations for the financial crisis that Iraq is going through, caused by low oil prices and accompanied by the impact of the Corona virus and the curfew, which resulted in what resulted It was interrupted by economic activities, “pointing out that” all of these factors are added to them by stopping the selling of currency outlets in the central bank, which led to a rise in the dollar exchange rate and the depreciation of the Iraqi currency. ”
He added that “the central bank was not able to stop the rise in exchange rates, due to the stoppage of the auction of currency sales, and there is no real interventionist management at the exchange rate from the central bank, as it was in the past”, noting that “the window stopped, and there is no real economic activity In the market only food, and we find that the demand for dollars rises, and with it the exchange rate rises. ”
Dagher pointed out that “the issue is related to future expectations and that the reassurances were not at the required level regarding the payment of salaries and the talk of printing the currency, which led to a lot of efforts to convert what he has from dinars to dollars.”
Dagher added: “I think that with the intervention of the Central Bank from next week and the expected high price of oil, it may reduce the severity of the increase in the exchange rate,” explaining that “the central bank announced the opening of the dollar sale window next week, and it has already opened the doors of certain transfers for the purposes of Food and medicine, and it didn’t work out much because it stayed open for a short time. ”
He pointed out that “if there is reassurance in terms of oil prices and improvement in public finances due to high levels of revenue and because of the intervention of the central bank and foreign currency injection into the market, then all of these factors, if combined correctly, and not one of them, will exchange rate stabilize
Iraq
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