Mazhar Mohammed Salih, the Iraqi prime minister's financial advisor.
PM adviser says dollar rise temporary, driven by ‘speculation’
BAGHDAD — Prime Minister’s financial adviser Mazhar Mohammed Saleh said Sunday that the recent rise in the dollar exchange rate is temporary and not rooted in economic fundamentals, blaming inaccurate information and rumors that have fueled short-term speculation in Iraq’s informal cash market.
Saleh told the official news agency that “what has happened in the parallel exchange market in recent days is nothing more than a temporary and exceptional fluctuation caused by inaccurate informational effects known in economic analysis as ‘colored noise,’ which are distorted pieces of information that often rely on rumors and lead to short-term speculation in the unregulated cash market.”
The dollar has continued to fluctuate in the black market, trading between 1,400 and 1,420 dinars, reflecting continued instability outside the official exchange rate. Saleh said the fixed exchange rate policy remains in place and is supported by strong fundamentals, including foreign reserves backing the official rate of 1,320 dinars per dollar.
Saleh said such movements are common during transitional periods, pointing to Iraq’s post-election phase and ongoing reforms to customs governance and digital procedures in line with international standards, including customs tracking systems and new digital applications.
He said the parallel-market volatility has not had a material impact on overall price stability. “Monetary policy continues to achieve its operational and intermediate objectives in stabilizing prices in general and maintaining the stability of the official exchange rate in particular,” he said, adding that this has been reflected in a decline in annual inflation growth “to natural break levels not exceeding 2.5% annually.”
He added that international institutions are responding positively to government reforms. “International institutions, foremost among them the World Bank and other multilateral global financing institutions, view with reassurance the government’s reform steps in the banking sector and the broader financial and economic sectors,” he said, citing measures aimed at improving the investment climate and strengthening partnerships between the state and the private sector.