Dol­lar Price Fluc­tu­a­tions De­te­ri­o­rate Iraqi Mar­kets

The Kurdish Globe - - NATIONAL -

Al­though the ex­change rate of the US Dol­lars has wit­nessed sharp fluc­tu­a­tions in the past cou­ple months in Iraq and have caused a lot of de­te­ri­o­ra­tions in the econ­omy of the coun­try, the Iraqi Coun­cil of Rep­re­sen­ta­tives has not yet raised this is­sue in the par­lia­ment nor it has asked for ex­pla­na­tions from the Cen­tral Bank of Iraq CBI.

Dr. Ahmed Chaw­sheen, Kur­dish mem­ber of the Fi­nance and Econ­omy Com­mit­tee of the Iraqi Par­lia­ment, told the Kur­dish Globe that al­though the me­dia or­ga­ni­za­tions claimed that his com­mit­tee met on May 9th and de­cided to sum­mon the trea­surer of the CBI to the Par­lia­ment to dis­cuss the is­sue of the fluc­tu­a­tions and find a way to sta­bi­lize the Dol­lar price, how­ever, there has not yet been any ef­forts in this di­rec­tion.

“Till now the trea­surer of the CBI has been sum­moned by the par­lia­ment and at­tended par­lia­ment ses­sions, but in­stead of ad­dress­ing the ex­change rate is­sue, par­lia­ment mem­bers only raised ques­tions about the loss of money at the bank and other top­ics,” MP Chaw­sheen told the Globe.

Al­though the CBI fixed the US Dol­lar ex­change rate at 1:1189 with the Iraqi Di­nar, but the Iraqi mar­ket has not wit­nessed this ex­change rate in re­al­ity even for one day.

The cur­rent Dol­lar price is be­tween 1:1280 -1:1300 with Iraqi Di­nar.

The rea­son be­hind US Dol­lar value ap­pre­ci­a­tion Ac­cord­ing to MP Chaw­sheen, who is an econ­o­mist, any coun­try where the se­cu­rity sit­u­a­tions de­te­ri­o­rate, peo­ple would lose faith in its econ­omy and its cur­rency and its cur­rency ex­change rate would de­pre­ci­ate against other cur­ren­cies. MP Dler Mah­moud, De­ci­sion­maker at the Fi­nance and Econ­omy Com­mit­tee of the Kur­dis­tan Par­lia­ment, on the other hands, re­lates the ap­pre­ci­a­tion of US Dol­lar value in Iraq with lack of a proper man­age­ment at the CBI.

“No in­ter­ro­ga­tion has been done with the pri­vate banks, which has cre­ated a chaos in the fi­nan­cial and cur­rency ex­change mar­ket in the coun­try,” ar­gued MP Mah­moud in an in­ter­view with the Kur­dish Globe. MP Mah­moud also sup­ports the idea that po­lit­i­cal and se­cu­rity in­sta­bil­ity has a sig­nif­i­cant im­pact on the ex­change rate fluc­tu­a­tions.

Tahsin Na­jib, an ex­pe­ri­enced cur­rency trader at the Cur­rency Ex­change Mar­ket in Er­bil, how­ever, claims that the de­pre­ci­a­tion in the value of Iraqi Di­nars is due to “the con­tin­u­ous and grad­ual col­lapse of the Ira­nian econ­omy.”

“The Shi­ite busi­ness­men from the cen­tral and south­ern Iraq are trans­fer­ring large amounts of US Dol­lars to Iran to keep the bal­ance in Iran’s econ­omy,” Na­jib told the Globe. “If this con­tin­ues, we will wit­ness more in­crease in US Dol­lar prices in Iraq.”

Ac­cord­ing to Dr. Iz­zat Sabir, a pro­fes­sor of econ­omy at the Univer­sity of Suleimaniya, Part of the sick econ­omy of Iran is liv­ing on the Iraqi econ­omy, and “due to lack of a re­li­able stock ex­change mar­ket in Iraq, there are con­cerns that Us Dol­lars are se­cretly flow­ing from Iraq into Ira­nian econ­omy, and when a cur­rency’s avail­abil­ity in the mar­ket is de­creas­ing, its price is in­creas­ing.”

Peo­ple and US Dol­lars

Dr. Sabir be­lieves that Dol­lar price fluc­tu­a­tions have di­rect im­pact on the lives of the peo­ple.

“More than 90% of the goods in the Iraqi mar­ket are bought with Dol­lars from out­side, and any fluc­tu­a­tion in Dol­lar price would di­rectly im­pact the prices,” says Dr. Sabir. “As soon as Dol­lar price goes up, prices go up pro­por­tion­ately, and peo­ple would be hurt.”

Na­jib, on the other hands, adds that such fluc­tu­a­tions would im­pact trade ac­tiv­i­ties and trades­men lose trust in the mar­ket and be­come more con­cerned.”

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