Dollar climbs to 169,000 dinars per $100 despite government plan to push it down

BAGHDAD — The dollar kept rising on Iraq’s parallel market on Sunday, selling for 169,000 dinars per $100 in Baghdad, days after the government said it planned to bring the rate down to 155,000.

The buying rate in Baghdad was 168,400. In Erbil, the dollar sold for 168,700 and was bought for 168,600, and in Basra it sold for 168,800 and was bought for 168,700. The market traded at 166,500 to 167,500 on Wednesday and 163,000 to 164,000 a week ago, against the official rate of 152,000 per $100.

Government spokesperson Haider al-Aboudi said on Wednesday that the government and the Central Bank had a plan to bring the parallel rate down to 1,550 dinars per dollar, or 155,000 per $100, in the near term, backed by enough Central Bank reserves to keep financing foreign trade and imports. He did not say how the plan would work.

Since Oct. 7, the Central Bank buys dollars from the Finance Ministry at 1,500 dinars, sells to banks at 1,510 and sets the public rate at 1,520, up from 1,320. Prime Minister Ali al-Zaidi told the parliament speaker and committee chairs on Oct. 8 that devaluation was necessary to keep paying salaries without more borrowing, after the government had weighed compulsory savings deducted from salaries, paying public employees every 45 days and taking on more debt. Economist Ziad al-Hashimi said on Oct. 9 that Zaidi had sidestepped the causes of the financial crisis, accusing the government of taking the easiest option at citizens’ expense rather than tackling waste, corruption and an overstaffed public sector.