Iraqi dinar loses about 14.5% in official devaluat...

Summary

• The Iraqi dinar is about 14.5% weaker after a change on Wednesday set the official public price of the US dollar at 1,520 dinars.
• Iraqi analyst Mohammed al-Saffar described the devaluation as “essentially a fiscal response to the shock to Iraq’s oil revenues.” In his view, Baghdad now receives more dinars for each dollar its oil earns.
• At that time, with oil prices falling amid the Covid-19 pandemic, it shifted the rate to 1,450 dinars per dollar from 1,182.

AI Generated Summary

The Iraqi dinar is about 14.5% weaker after a change on Wednesday set the official public price of the US dollar at 1,520 dinars.

Ministers backed the new set of rates at a cabinet session on Tuesday. They acted on proposals from the finance minister and the central bank governor. Under the decision, the Finance Ministry buys dollars at 1,500 dinars each. Banks then pay 1,510 dinars per dollar, while the public pays 1,520 dinars when buying from banks and non-bank financial institutions.

The central bank told lenders, electronic payment firms and exchange offices to drop the old rate. The new prices applied from the opening of business on October 7. Since February 2023, the official rate had stood at 1,320 dinars.

Why the Iraqi dinar fell