In Baghdad, the dollar exchange rate dropped at the Al-Kifah and Al-Harithiya stock exchanges. It reached 1,415.5 dinars compared to 1,416.5 dinars recorded earlier in the day. Local currency shops in the capital also reported trading between 1,425 and 1,405 dinars, showing wider fluctuations among small traders.
Meanwhile, in Erbil, the dollar exchange rate fell as well, fluctuating between 1,413.5 and 1,412.5 dinars. Traders noted that the changes reflect increased liquidity and stronger regulatory oversight in recent weeks.
The Central Bank of Iraq (CBI) has played a critical role in shaping these trends. In February 2023, the bank officially set the rate at 1,300 dinars per US dollar. This was a reduction from the earlier official rate of 1,450 dinars. The decision aimed to narrow the gap between official and market rates.
Previously, Iraq faced sharp differences between the official rate and the parallel market. For example, in January 2023, the official rate stood at 1,450 dinars per dollar. However, market exchanges reached as high as 1,610 dinars, reflecting a difference of more than 10 percent.
Economic experts argue that narrowing this gap is essential for restoring confidence in Iraq’s financial system. They emphasize that exchange rate stability will support trade, reduce inflationary pressures, and improve purchasing power for ordinary citizens.
Furthermore, government officials highlight that stability in the dinar helps Iraq meet obligations such as public salaries and import costs. The ongoing reforms are also designed to strengthen cooperation between Baghdad and Erbil on financial policies.
Looking ahead, traders expect further adjustments as global currency markets remain uncertain. However, many agree that continued support from the Central Bank will be necessary to ensure lasting progress. The market now watches closely whether policy measures will maintain the dinar’s stability in coming months.
