Iraqi Parallel Market Dollar Rates Remain High Despite Central Bank's Efforts

Iraqi Parallel Market Dollar Rates Remain High Despite Central Bank's Efforts

Shafaq News/ According to experts and officials, The exchange rates of the US dollar in Iraq's parallel market remain significantly higher than the official rate set in the country's budget, even after efforts by the Central Bank to address the issue.

The official rate, set at 130,000 Iraqi dinars per 100 dollars in the current year's budget, has seen a persistent gap of approximately 20 points in the parallel market. Despite the Central Bank's attempts to correct the path of foreign transfers and encourage their use for covering imports, the rates have not shown signs of decline.

Financial and economic expert Hilal Al-Taan highlighted several factors contributing to the dollar exchange rate rise in the parallel market. These include the manipulation of prices by exchange offices based on their own interests and the involvement of black market traders who further influence the rates.

Al-Taan emphasized that administrative and financial corruption significantly affects currency smuggling abroad. He pointed out the lack of stringent laws to regulate the sale of dollars and penalize individuals involved in foreign currency smuggling.

Economist Dergham Muhammad Ali highlighted two non-economic elements influencing the exchange rate. Firstly, creating a parallel exchange rate puts additional pressure on the market and citizens. Secondly, the delay in passing the budget allows specific political forces to benefit financially by exploiting the gap between the official and parallel rates.

In turn, economist Muhammad al-Hassani, called for enhanced monitoring of foreign remittances by the financial institutions contracted by Iraq to prevent smuggling and money laundering. Delays in processing these remittances drive traders to the parallel market, where quick access to dollars is sought.

Al-Hassani also noted that small traders, lacking their own companies, often resort to the parallel market to finance their trade, increasing the demand for dollars beyond the available supply.

Despite the Central Bank's efforts to narrow the gap between the parallel market and official exchange rates, the parallel market rates have risen to nearly 150,000 dinars per 100 dollars. This persistent disparity underscores the challenges faced in effectively addressing the issue.

Shafaq Live
Shafaq Live
Radio radio icon