ERBIL, Kurdistan Region - Iraq’s prime minister on Monday replaced the heads of the country’s central bank and trade bank after issuing a number of decisions to control the unstable dinar-dollar exchange rate the night before.
Iraqi state media reported that Prime Minister Mohammed Shia’ al-Sudani had dismissed Mustafa Ghalib Makhif of his post as the head of the Iraqi Central Bank “upon his own request” and had named Ali Mohsen al-Alaq as an interim head of the central bank.
Sudani also decided to change the head of the Trade Bank of Iraq, appointing Bilal al-Hamdani as the interim head following Salem Jawad al-Chalabi’s mandatory retirement.
The decisions from Sudani come after he issued a set of decisions on Sunday to control the fluctuation of the Iraqi dinar’s exchange rate.
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 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 Friday 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.
