Iraq’s currency plummeted to a new low against the US dollar. In the northern Kurdistan region, the rate stood at 1,550 Iraqi dinars to the dollar - the lowest it has traded since 2004, according to experts.
The depreciation in the dinar’s value triggered a wave of severe anxiety in the local markets that have been suffering from recession for weeks. It also spurred fears of the possibility of more decline given the inability of the Central Bank and government authorities to curb the spiral.
Economic analysts traced the decline to both local and foreign reasons. In Iraq, some private banks were excluded from currency auctions set up by the Central Bank. External factors, such as the actions of the US Federal Reserve, have also been commonly blamed for the decline in recent weeks.
About three weeks ago, the Iraqi government pledged to control the exchange rate. The dinar, however, continued to depreciate steadily, drawing political and popular criticism against Prime Minister Mohammad Shia al-Sudani.
The political criticism came from the pro-Iran Shiite Coordination Framework that had brought Sudani to power in October.
Hanan Al-Fatlawi, a Framework MP, stressed that the government needs to explain its policy in fighting the drop in the dinar’s value.
“Panic is gripping the market due to the rapid rise in the exchange rate of the dollar,” tweeted Al-Fatlawi.
“The government is required to reassure the people. It must clarify the measures it is taking to prevent the collapse,” she demanded, noting that the Central Bank governor had yet to comment on the issue.
The parliamentary Services and Construction Committee viewed the drop in the value of the currency as the government’s failure to implement its economic policies.
