Iraq-Turkey imports deal expected to impact currency exchange rates

ERBIL, December 25 — An agreement allowing Turkish imports into Iraq in dinars may influence the currency exchange market and drive down the dollar rate, says the head of Iraq’s Private Banks Association.

According to Wadih Al-Handal, the deal between Ankara and Baghdad would allow importers to buy Turkish goods in Iraqi dinars, thereby stabilizing the U.S. dollar to dinar exchange rate, which has seen fluctuations this year.

The Central Bank of Iraq first revealed details of the agreement on December 2, specifying that small businesses could deposit Iraqi dinars in local banks. The arrangement would then allow them to procure goods in Turkey using liras or euros, subsequently exporting them to Iraq.

As of Monday, the U.S. dollar to Iraqi dinar rate on the informal exchange market in Erbil stood at 1,496 dinars per $1, a decline in value compared to the rate a week ago.