US dollar experiences slight decline against Iraqi Dinar in Baghdad, Erbil

The US dollar exchange rate witnessed a marginal decline in both Baghdad and Erbil on Sunday, coinciding with the closure of the prominent Al-Kifah and Al-Harithiya stock exchanges in Iraq. Closing at 1526 dinars, down from 1527.5 dinars earlier in the day, this shift in the exchange rate has drawn attention to the dynamic economic landscape of the nation.

Reportedly, currency exchange shops in Baghdad recorded a fluctuation in the US dollar rate, ranging between 1537.5 dinars and 1517.5 dinars, as highlighted by Shafaq News. Meanwhile, in Erbil, the exchange rate for the US dollar demonstrated a similar trend, ranging between 1522.5 dinars and 1524.5 dinars. The volatility in exchange rates prompts a closer examination of the economic factors at play in the region.

It is noteworthy that the Central Bank of Iraq (CBI) had implemented a new exchange rate last February, setting the value of one US dollar at 1,300 dinars. This marked a shift from the previous official rate of 1450 dinars per dollar, which had, in turn, spurred parallel market rates reaching 1550 dinars. The recent decline in the exchange rate aligns with the ongoing adjustments following this shift in policy by the CBI.

In reflecting on the broader context, January 2023 witnessed the US dollar reaching 1610 dinars against the local currency, accentuating a considerable gap of more than 10 percent compared to the official exchange rate of 1450 dinars per dollar. These fluctuations underscore the challenges and adjustments within Iraq’s financial landscape as it adapts to changing economic dynamics.