'Rise in dollar rate expected to be temporary'
PM Al-Sudani’s meeting with currency exchange companies averts strike
BAGHDAD – Prime Minister Mohammed Shia Al-Sudani met with representatives of currency exchange companies last night, resulting in the cancellation of a planned strike. According to a source at the Central Bank of Iraq, speaking anonymously to 964media, the meeting addressed concerns over new Central Bank regulations on traveler dollars amid a sudden increase in the exchange rate. Discussions lasted until 2 a.m. on Tuesday, leaving attendees “feeling less anxious” about future financial fluctuations.
The meeting concluded with an agreement to cancel the strike in exchange for a commitment to review the demands of the currency exchange companies. These companies are expected to comply with legal procedures for obtaining and selling dollars to eligible recipients and to accept set profit margins, avoiding large profits through market manipulation.
The government and Central Bank’s stance on the sale of dollars, particularly traveler dollars, remains firm. These transactions will continue to be restricted to banks and companies with branches located at airports. While some companies have opposed this new mechanism, the government and Central Bank are not willing to alter their approach due to broader issues involving U.S. positions on currency sales and the necessary conditions and mechanisms for these sales.
“Certain exchange companies desire a share of the dollars to sell directly to travelers. However, the government and Central Bank aim to ensure that dollars reach genuine travelers and prevent misuse by other entities exploiting these allocations for unauthorized trade,” the source told 964media.
The initial reaction to the restriction of traveler dollar sales to airports has affected many speculators and beneficiaries involved in unofficial dollar trading. Nevertheless, “some legitimate demands from exchange companies will be seriously considered by the government and the Central Bank.”
The meeting came amid a rise in the dollar’s value against the Iraqi dinar late last week, with $1 surpassing 1,500 Iraqi dinars after months of staying below that threshold.
“The rise in the dollar rate is expected to be temporary,” the source added, “lasting through the current and following week as the new regulations take effect.” In the medium and long term, these measures are “anticipated to benefit the Iraqi public,” the primary beneficiaries of the dollar. Additionally, this approach is projected to gradually reduce the exchange rate, mirroring past instances when similar measures were implemented.
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