US dollar takes dip in Baghdad, Erbil as stock exchanges close

The exchange rate of the US dollar against the Iraqi dinar experienced a decline in both the bustling city of Baghdad and the capital of the Kurdistan region, Erbil. This downturn coincided with the temporary closure of Baghdad’s Al-Kifah and Al-Harithiya stock exchanges, pivotal players in the Iraqi financial landscape.

As the two stock exchanges shuttered their doors, the US dollar exchange rate took a modest dip, settling at 1508.5 dinars, a slight retreat from the earlier rate of 1510 dinars on the same day.

Reports streaming in from Shafaq News reveal a noticeable fluctuation in the US dollar exchange rate within currency exchange shops in Baghdad. The rates swung between 1517.5 dinars and 1497.5 dinars, mirroring the dynamic nature of the economic climate. Meanwhile, in Erbil, the exchange rate wavered between 1507.5 dinars and 1506.5 dinars.

This shift in currency dynamics follows the Central Bank of Iraq’s (CBI) implementation of a new exchange rate for the US dollar in February 2023. The fixed rate of 1,300 dinars against one US dollar marked a significant adjustment from the previous official rate of 1450 dinars. Simultaneously, in the parallel market, the exchange rate had soared to 1550 dinars, underscoring a discrepancy.

January 2023 witnessed a spike in the exchange rate of the US dollar against the local currency, reaching 1610 dinars. This surge occurred while the official exchange rate remained stagnant at 1450 dinars per dollar, creating a gap exceeding 10 percent between the two rates. The episode highlighted the inherent volatility in the currency markets during that period.

Amid ongoing fluctuations in exchange rates between the US dollar and the Iraqi dinar, stakeholders are vigilantly monitoring developments. The recent decline in exchange rates in both Baghdad and Erbil serves as a testament to the dynamic nature of the currency markets, emphasizing the necessity for robust strategies to effectively manage currency fluctuations.