The exchange rate of the US dollar witnessed a significant increase in both Baghdad and Erbil, the capital of Iraqi Kurdistan, on Thursday. This surge coincided with the closure of the two primary stock exchanges in the country, namely Al-Kifah and Al-Harithiya in Baghdad.
Following the shutdown of these key stock exchanges, the US dollar exchange rate in Baghdad rose to 1522.5 dinars, compared to the morning rate of 1518 dinars. The fluctuation extended to currency exchange shops, where rates ranged between 1532.5 dinars and 1512.5 dinars, as reported by Shafaq News.
Meanwhile, in Erbil, the US dollar exchange rate displayed a range of 1519 dinars to 1518 dinars, reflecting a similar trend in the Kurdistan region.
This economic shift comes after the Central Bank of Iraq (CBI) announced in February of the previous year that it had initiated the application of a new exchange rate for the US dollar, fixed at 1,300 dinars against one US dollar. This marked a departure from the former official rate of 1450 dinars to one US dollar, which was concurrently being traded at a parallel market rate of 1550 dinars.
Examining the backdrop, it is noteworthy that in January 2023, the exchange rate of the US dollar against the local currency reached 1610 dinars. Despite this surge, the official exchange rate remained at 1450 dinars per dollar, creating a substantial gap of over 10 percent between the two rates.
The dynamics observed in the exchange rates raise questions about the economic factors contributing to this notable fluctuation and the potential implications for businesses and individuals in the region. As the financial landscape continues to evolve, stakeholders will closely monitor developments to assess the impact on the broader economic environment.