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US Dollar Continues Insane Hike at the Expense of Iraqi Dinar

US Dollar Continues Insane Hike at the Expense of Iraqi Dinar

Monday, 30 January, 2023 - 08:15
A member of Iraq Bikers, the first Iraqi biker group, drives with an Iraqi flag on his motorbike in Baghdad, Iraq December 28, 2018. REUTERS/Thaier Al-Sudani

The exchange rate of the US dollar in Iraq continues to skyrocket as the country’s monetary authorities and government fail to curb the devaluation of the Iraqi dinar. On Sunday, the price of the US dollar stood at 1,650 dinars.

The recent slide of the Iraqi dinar against the dollar has disrupted local markets and created turmoil as the price of goods and services hiked to unprecedented levels.

According to the Ministry of Planning, the month-to-month inflation rate rose by 0.3% in December.

“The ministry’s Central Bureau of Statistics monitored an increase in the monthly inflation rate during the last month of 2022 (December) by 0.3 %, compared to October,” said the ministry in a statement.

Inflation has caused a hike in the prices of entertainment by 2.4% and rates of miscellaneous goods and services witnessed an increase of 2 %. Moreover, the cost of transportation in Iraq grew by 1.5%.

“The annual inflation rate during the past year (2022) recorded an increase of 4.9 %,” noted the ministry.

Most sellers and wholesalers have been complaining for weeks about the decline of commercial activity in local markets and the citizens’ reluctance to shop.

The purchasing power of Iraqis has been considerably reduced due to the drop in the dinar’s value and the significant increase in the prices of most commodities and basic foodstuffs.

Prices of some commodities had almost doubled.

Merchants and citizens fear that the dinar will further plummet to trade at 2,000 dinars per dollar if the government continues to fail in confronting the crisis.

Many warned that protests, demonstrations, and social unrest would return to the streets.

This caveat comes at a time Sadrists, followers of the Sadrist Movement in Iraq, are signaling plans for massive demonstrations. Their last week’s protest at the central bank had failed in getting the dollar exchange rate to stabilize and return to previous levels.

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