How the Iraqi Dinar Black Market Rate Affects the Economy
This news story is from May of 2023. The channel is just now bringing it to you because, we just found this information when searching in disguise for "iraqi black market rates" Read what the parliament member said at the end of this article. We do not believe him, however, you have a right to know what he said.
In May of 2023, Iraqi Interior Ministry officials decided earlier in the week that sales of cars in Baghdad must be made in Iraqi dinars instead of dollars, in an effort to control a fluctuating black market exchange rate. As a result, car showrooms in Baghdad saw a drastic decline in customers.
There is currently a gap between the official exchange rate and the black market exchange rate. Currently, the Iraqi Central Bank sells $1 for 1,320 dinars, while the black market sells it for 1450-1480 dinars. (This amount changes almost daily)
Car dealers were told that anyone who violates these instructions will be imprisoned and their showrooms closed, according to the interior ministry.
"More than 75 percent of car showrooms in Baghdad and other provinces have opposed the decision," Tamimi said.
Kurdish authorities have not commented on the issue since the decision has not been imposed in the Kurdistan Region.
Since the decision has been made, Hajj Fadel has complained about the weak market movement.
The decision affected the customer and us, but we have borne the brunt of the damage," said Fadel al-Janabi, owner of a car dealership in Baghdad.
The outsiders refuse to deal in Iraqi dinars, so they import cars from outside Iraq in dollars.
In addition to preventing the smuggling of dollars abroad and limiting exchange rate manipulation, the government aims to control the dollar and strengthen the value of the Iraqi dinar by expanding its commercial uses.
Since many imported goods are paid for in dollars, the dinar's devaluation hit the public hard, as government employees get paid in dinars. (And oil revenues are in US dollars)
Devaluing the Iraqi dinar is a step toward reform and creating a "financial balance" that will revitalize the economy, former Finance Minister Ali Allawi said.
Earlier in 2023, a member of the parliament's finance committee announced that the dinar-dollar exchange rate would be fixed for the next five years.
This article is based on a news report from RUDAW
