US Dollar exchange rate inches up in Baghdad, Erbil

The US dollar exchange rate against the Iraqi dinar experienced a slight rise in Baghdad and Erbil on Wednesday, coinciding with the closure of the country’s two primary stock exchanges. Specifically, the US dollar exchange rate saw an uptick following the closure of Baghdad’s Al-Kifah and Al-Harithiya stock exchanges. Reports indicate that the rate reached 1506 dinars, up from 1505.5 dinars earlier in the day.

According to Shafaq News, currency exchange shops in Baghdad registered varying rates, with the exchange rate fluctuating between 1515 dinars and 1495 dinars. Meanwhile, in Erbil, the US dollar exchange rate ranged between 1502.5 dinars and 1501.5 dinars. These adjustments in exchange rates reflect the dynamics of the currency market in both cities.

The Central Bank of Iraq (CBI) implemented a new exchange rate for the US dollar in February 2023, setting it at 1,300 dinars per dollar. This move marked a significant departure from the previous official exchange rate of 1450 dinars per dollar. Prior to the CBI’s intervention, the parallel market had seen the exchange rate soar to 1550 dinars per dollar.

The disparity between the official exchange rate and the parallel market rate became pronounced in January 2023 when the US dollar traded at 1610 dinars in the local currency market, contrasting sharply with the official rate of 1450 dinars per dollar. This disparity exceeded 10 percent, underscoring the challenges faced by authorities in managing exchange rate stability.

The fluctuations in the US dollar exchange rate underscore the ongoing challenges in Iraq’s currency market, with factors such as economic conditions, government policies, and external influences contributing to the volatility. As authorities continue to navigate these complexities, monitoring exchange rate movements remains crucial for investors, businesses, and policymakers alike.