Iraqi government spokesman Haider Al-Aboudi has accused both Iran and the United States of “strangling” Iraq’s economy by failing to grant exemptions that would allow Iraqi oil exports through the Strait of Hormuz.
In a television interview, Al-Aboudi said: “Iraq’s economy is living under the burden of a suffocating blockade, with a complete absence of any Iranian or American response to granting exemptions for oil exports.”
Al-Aboudi also launched a sharp attack on the government of former Prime Minister Mohammed Al-Sudani, accusing it of causing losses of nearly 36 trillion Iraqi dinars to the state treasury through its 2023 decision to reduce the exchange rate from 1,470 dinars per U.S. dollar to 1,320 dinars per dollar.
His remarks come as the current government seeks to counter criticism over its decision, announced last Tuesday, to devalue the dinar to 1,520 per dollar.
The decision to alter the exchange rate continues to generate significant debate as the government has failed to close the gap between the official rate of 1,520 dinars per dollar and the parallel market rate of 1,630 dinars. This discrepancy has contributed to substantial increases in the prices of many essential goods, including food items.
The exchange-rate issue has also sparked broad political reactions. Nouri Al-Maliki, leader of the State of Law Coalition, called in a post on X for citizens not to use the dollar exchange-rate adjustment as a pretext for stirring concern.
Despite measures introduced by the government to curb soaring prices, including injecting additional dollars into the market and offering construction materials to citizens through installment-payment schemes, prices have remained high. This has exposed the government to further public and political criticism.
Legal Challenge
Observers do not rule out the possibility that Prime Minister Ali al-Zaidi could face legal scrutiny. Saud al-Saadi, head of the parliamentary Huqooq Bloc, has filed an official appeal before the Federal Supreme Court, challenging Cabinet Resolution No. 544 concerning the exchange rate of the US dollar against the Iraqi dinar.
Speaking to the press on Monday, al-Saadi said that the Court had received the appeal and informed him that an official hearing date would be scheduled at a later time.
Denial of Pursuing Currency Speculators
In a related development, Al-Aboudi stated that the prime minister had “categorically rejected any intervention by security agencies or the use of police measures to regulate the market.”
The denial came in response to an audio recording in which a citizen called the Interior Ministry’s complaints hotline and asked whether complaints or reports could be filed against exchange companies selling dollars at the parallel-market rate of 1,650 dinars, compared with the official rate of 1,520 dinars per dollar. A complaints official reportedly answered in the affirmative.
On Sunday evening, both the Security Media Cell and the Ministry of Defense quickly denied that the complaints official’s response reflected government policy.
In a statement, the Security Media Cell said that directives from Commander-in-Chief Ali al-Zaidi emphasized that the dollar exchange-rate issue is a financial and economic matter, not a security matter.
The statement stressed that exchange rates are governed by market mechanisms and the laws of supply and demand and fall under the jurisdiction of financial and monetary authorities, foremost among them the Central Bank of Iraq.
The statement further underscored that there are no instructions for security forces to intervene in market activity or influence exchange rates, noting that their role is limited to enforcing the law and carrying out judicial orders issued by competent authorities.
It added that any action taken against violators or individuals engaged in illegal foreign-currency transactions would be conducted in accordance with established legal and judicial procedures and in coordination with the Central Bank of Iraq, which is responsible for supervising financial and banking institutions, regulating exchange companies, monitoring compliance with relevant regulations, and taking the necessary administrative measures to safeguard financial transactions and support duly licensed firms.
The Security Media Cell called on citizens, merchants, exchange companies, and market participants to remain reassured and continue conducting their lawful financial and commercial activities normally.
The complaints official’s remarks had reportedly alarmed exchange companies, which often have to deal according to prevailing market rates rather than the official rate. Some industry workers said the comments actually contributed to driving exchange rates higher in the parallel market rather than lowering them.
Personal Conduct
As a result of the confusion and concern caused by the audio recording, the Interior Ministry issued a statement clarifying the circumstances surrounding the phone call made by a citizen to an employee of the Central Response and Control Directorate (911), who had been asked about dollar buying and selling rates at exchange companies.
The ministry stated that the employee’s response constituted “a personal action” and did not represent the ministry’s official position, as he was not authorized to provide information or statements on matters outside the scope of his assigned duties and responsibilities.
The ministry also confirmed that it had taken the necessary legal measures against the employee in accordance with applicable regulations and instructions, reaffirming its commitment to professional discipline within the public service.
