Dinar dips: CBI auction freeze triggers market concerns

Shafaq News/ The Iraqi dinar fell against the US dollar in local markets after the Central Bank of Iraq (CBI) halted its currency auction, fuelling concerns over exchange rate stability.

Economist Mohammed al-Hassani explained that the CBI had failed to publish its currency auction data for two consecutive days, which led to a surge in demand for the dollar.

"The increased demand, combined with a limited supply, has driven the dollar's value higher," he told Shafaq News. He also noted that speculation in the currency market may be contributing to the fluctuation. As a result, the exchange rate rose to over 149,000 dinars per $100, after having recently fallen to around 146,000 dinars per $100.

Moreover, economist and former CBI Director General Mahmoud Dagher previously attributed the decline in the dollar's value to the outflow of US currency into neighboring countries, which he said helped replenish their foreign reserves. However, he warned that this trend might not persist. "The continued decline in the dollar's price is not guaranteed, as market speculation could destabilize the exchange rate," he cautioned.

The CBI has yet to provide an explanation for suspending the auction, adding to the uncertainty in the market.