Iraq’s Sudani issues several decisions to stabilize dinar value

ERBIL, Kurdistan Region - Iraq’s Prime Minister Mohammed Shia’ al-Sudani on Sunday issued a number of decisions to control the fluctuation of the Iraqi dinar’s exchange rate with foreign currencies, saying that responding to the depreciation is a “shared responsibility.”

The decisions were issued following a meeting chaired by Sudani and attended by the Iraqi chambers of commerce federation, the governor of the Central Bank, and directors of the border crossings, taxes, customs, and trade fairs authorities.

The exchange rate of one USD reached 1,670 IQD in the currency markets of Iraq and the Kurdistan Region on Friday, continuing the massive depreciation of the Iraqi currency in recent weeks.

Some of the decisions taken to control the fluctuation included financing the Central Bank of the Trade Bank of Iraq with an additional $500 million to open credits for small merchants, opening a new foreign currency selling window for small traders by the Trade Bank of Iraq, authorizing the import of goods for companies registered with the trade ministry, and facilitating the import procedure.

“The responsibility to face fluctuations in the local market is a shared responsibility, and it has ethical and patriotic dimensions. Everyone must respond to it, whether in the private or public sectors,” a statement from Sudani’s office cited the premier as saying during the meeting.

The depreciation of the Iraqi dinar has been attributed to the New Year holidays, the closure of banks, as well as pressure from the United States.

Iraq’s foreign minister Fuad Hussein told Rudaw on Sunday that an Iraqi delegation will visit Washington in early February and will discuss the exchange rate fluctuation with US officials.

In December of 2020, Iraq’s central bank announced devaluing the country’s currency in an effort to combat a national liquidity crisis and bring in much-needed cash to the government’s coffers.

The devaluation of the dinar struck the public hard as government employees get paid in dinar, and they would be able to afford less with their salaries given that many imported goods are paid for in dollars.

CORRECTION:  Iraq’s Prime Minister Mohammed Shia’ al-Sudani on Sunday issued a number of decisions.