Auto dealers in Kut struggle amid currency exchange rate fluctuations

AL-KUT, October 31 — Car dealerships in Kut say a severe recession has hit their market, leaving them struggling over the last month as the U.S. dollar continues to rise and despite a greater shift towards trade in the Iraqi dinar.

Dealers discuss a gradual shift towards dinar adoption, but it appears to be a superficial change. Agreements on car prices still happen in dollars, after which the amount is translated to dinars based on the dollar’s value on the blackmarket. Payment is also made in dinars.

Hassan Nabil, the owner of a car dealership, told 964, “The dealership used to sell at least four cars a week, but in the last month, we’ve sold only one car, at best. This is the general situation in the market.”

Nabil has transitioned to selling cars in dinars because his customers no longer prefer dealing in dollars, but he still sets prices in dollars converts them to dinars at the black market’s exchange rate. The official bank rate is 1,320 dinars per dollar, while the black market rate fluctuates daily, and reached as high as 1,610 per dollar on October 31.

“We have significant financial obligations, including rent, staff salaries, and various overhead expenses, and what’s happening in the currency market is undermining our business,” he added.

Jalil Marah is a prospective buyer who said he had been looking to purchase a car for over a month. “I haven’t found one that suits me because prices are high and the market is so volatile,” he said.

He added, “We save our money in Iraqi dinars, and when we consider buying a car, we cannot convert the amount to dollars because the price difference changes daily, and the dollar is constantly rising. This is a loss for the buyer.”