Rumors and speculation behind US dollar rates spike in Iraq, official

Shafaq News/ The recent rise in the US dollar’s exchange rate against the Iraqi dinar is temporary and fueled by speculation, Iraq’s financial and economic adviser to Prime Minister Mohammed Shia Al-Sudani said on Thursday.

Advisor Mazhar Mohammed Saleh revealed to Shafaq News, “The exchange rate gap in the market is fundamentally stable due to strict controls on cash dollar sales through legal outlets for travelers,” adding that travelers can access other permitted amounts through various payment cards at an exchange rate of 1,320 dinars per dollar.

Saleh attributed the volatility to the recent shift from the previous external transfer platform to new mechanisms for foreign currency allocation, designed to meet banks’ foreign currency needs for trade financing.

Warning against the exploitation of false information aimed at profiteering, he explained that “this transition has led to a wave of misinformation and misunderstandings, exploited by the parallel market and speculators for quick profit.”

The PM’s advisor further described the rise in the exchange rate as “temporary market bubbles, which will fade over time.”

On Wednesday, the economist Abdul Rahman Al-Mashhadani attributed the dollar’s rise primarily to rumors that falsely suggested that foreign transfers would stop.

“This rumor is incorrect as 97% of transfers conducted through the platform were routed to banks with correspondent relationships for account reinforcement,” Al-Mashhadani said. He also noted that the increased demand for dollars is partly due to Christmas holidays, as travel spikes during this period.

For his part, Parliamentary Finance Committee member MP Jamal Kocher informed Shafaq News that the committee is actively monitoring the dollar exchange rate in the parallel market in coordination with the Central Bank.

"The Finance Committee may summon the governor of the Iraqi Central Bank for questioning if the exchange rate does not stabilize," he added.