Advisor To The Prime Minister: Economic And Disciplinary Factors Behind The Stability Of The Exchange Rate And The Decline Of Dollarization

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Advisor To The Prime Minister: Economic And Disciplinary Factors Behind The Stability Of The Exchange Rate And The Decline Of Dollarization

Time: 2025/07/17 13:55:21 Reads: 750 Times {Economic: Al Furat News} The financial advisor to the Prime Minister, Mazhar Muhammad Salih, confirmed that the
     decline in the "dollarization" phenomenon and the
     stability of the Iraqi dinar exchange rate
are due to a combination of decisive economic and disciplinary factors.

Saleh explained in a statement to Al Furat News Agency that "the disciplinary factors included
tightening controls on the use of the dollar in domestic transactions and  completely prohibiting its use in local settlements and payments, in accordance with the law.

He pointed out that these measures included bank deposit mechanisms for real estate transactions,
which had previously been the focus of demand for cash dollars, and which the dinar had replaced with remarkable success.

He noted that this success is credited to the Central Bank of Iraq and its monetary policy, despite the criticism it has faced. Saleh added that the exchange rates in the parallel market would have been in line with the official markets had it not been for the recent geopolitical tensions in the Middle East, which caused a difference of 142 dinars per dollar."

The financial advisor explained that

Financing Foreign Trade and Monetary Enhancing Mechanisms

"one of the most important success factors that led to the decline in the strength of the parallel market was the direct financing of foreign trade for small traders from official dollar outlets at a rate of 1,320 dinars per dollar, without the need for intermediaries.

He pointed out that imports by small traders constitute more than 50% of the total foreign market trade in Iraq."

Saleh did not neglect to point out that the mechanisms for strengthening Iraqi banks' foreign currency reserves with correspondent banks have become easier as an alternative to the Central Bank's window and previous platforms,

which were abolished at the beginning of the year. He emphasized that these mechanisms have proven successful in dominating the official exchange market as a whole in foreign transfer transactions at the fixed exchange rate of 1,320 dinars per dollar.

Trade Policy and the Use of Electronic Payments

Saleh also emphasized the role of trade policy, which intervened for the first time by opening giant shopping centers and expanding in this direction (hypermarkets),

describing it as a "price defense policy in favor of the official exchange rate," and weakening market demand for financing some of its trade from the parallel market, which has become "highly expensive."

Finally, the financial advisor noted the growing trend among the public toward the widespread use of electronic payment cards funded at the official exchange rate (1,320 dinars), which has become "one of the modern travel customs and traditions in Iraq."