US dollar exchange rate declines in Baghdad, Erbil

The US dollar exchange rate against the Iraqi dinar witnessed a decline in both Baghdad and Erbil, the capital of the Kurdistan region of Iraq. This decrease coincided with the closure of the two primary stock exchanges in the country.

Specifically, the closure of Baghdad’s Al-Kifah and Al-Harithiya stock exchanges led to a decrease in the US dollar exchange rate, which reached 1508.5 dinars compared to 1510 dinars earlier in the day.

According to reports from Shafaq News, currency exchange shops in Baghdad reflected a fluctuation in the US dollar exchange rate, ranging between 1517.5 dinars and 1497.5 dinars. Meanwhile, in Erbil, the exchange rate for the US dollar varied between 1507.5 dinars and 1506.5 dinars.

The Central Bank of Iraq (CBI) initiated the implementation of a new exchange rate for the US dollar in February 2023, fixing it at 1,300 dinars against one US dollar. This adjustment came after the previous official exchange rate stood at 1450 dinars to one US dollar, which was concurrently being exchanged in the parallel market at a rate of 1550 dinars.

Notably, in January 2023, the exchange rate of the US dollar against the local currency soared to 1610 dinars, while the official exchange rate remained stagnant at 1450 dinars per dollar. This disparity resulted in a gap of over 10 percent between the two exchange rates, underscoring the volatility in the currency markets during that period.

As fluctuations persist in the exchange rates between the US dollar and the Iraqi dinar, stakeholders continue to monitor developments closely. The recent decline in exchange rates in both Baghdad and Erbil underscores the dynamic nature of the currency markets and highlights the need for robust strategies to manage currency fluctuations effectively.