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US President Joe Biden speaking in a meeting in the White House on January 24, 2023. Photo: Andrew Caballero-Reynolds/AFP. Iraqi Prime Minister Mohammed Shia’ al-Sudani in a meeting with officials of Iraq’s financial institutions on February 2, 2023. Photo: PM Sudani’s office.
ERBIL, Kurdistan Region - United States President Joe Biden on Thursday spoke to Iraq’s Prime Minister Mohammed Shia’ al-Sudani, reiterating Washington’s support to Baghdad and willingness to endorse the premier’s program to improve the country’s economy.
“The President reaffirmed the U.S. commitment to the Strategic Framework Agreement with Iraq and commended the Prime Minister’s efforts to strengthen Iraq’s sovereignty and independence,” read a statement from the White House.
The Strategic Framework Agreement, which went into effect in 2009, seeks to normalize Baghdad-Washington relations through setting long-term bilateral economic, diplomatic, cultural, and security cooperation.
The readout said that Biden also addressed Sudani’s agenda to boost the Iraqi economy, adding that Washington was prepared to “fully endorse” these policies.
Sudani held the second meeting with officials of Iraq’s financial institutions on Thursday, aimed at controlling the ongoing fluctuation in the dinar-dollar exchange rate.
The exchange rate of one USD reached 1,750 IQD in the currency markets of Iraq and the Kurdistan Region on Thursday, continuing the massive depreciation of the Iraqi currency in recent months.
Yahia Rasool, Sudani’s spokesperson, said on Thursday that the PM held a meeting with some of the country’s top security officials, issuing “strict directives” to resolve the issue of currency smuggling, which has been deemed as one of the reasons for the recent drop in the dinar value.
An Iraqi delegation, headed by Foreign Minister Fuad Hussein, will discuss the unstable dinar-dollar exchange rate with US officials in Washington next week. The visit was welcomed by Biden during the call with Sudani.
In an interview with Rudaw earlier this month, Hussein said that there are many reasons behind the drop in dinar value, among them is the US Federal Bank overlooking the flow of dollars in Iraqi market, which has led to a lower amount of dollars being released into the market by the Iraqi central bank.
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.
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