Iraqi Dinar Weakens to 158,700 per $100 on Redenomination Fears
Parallel market rates spike as officials discuss removing zeros from the currency.
The parallel market rate for the US dollar in Iraq rose to 158,700 dinars per $100 on Sunday. This represents an increase from approximately 150,000 dinars a week earlier. The shift reflects a depreciation of the dinar by roughly 5.5% over the period.
Economist Amr Hisham attributed the move to public speculation about currency redenomination. Officials have discussed removing zeros from the dinar. Citizens interpreted these statements as a signal of structural change and purchased dollars as a hedge. GN auto markets/forex: exchange rate data confirms the divergence between official and parallel markets.
Official rate remains fixed at 132,000
The official exchange rate stands at 1,320 dinars per dollar. This equals 132,000 dinars per $100. The gap between the official peg and the street rate has widened significantly. Retailers in Baghdad sold dollars at 160,250 dinars per $100 on Saturday. Prices in Erbil and Basra hovered near 159,500 dinars per $100.
Central Bank denies zero-removal printing
The Central Bank of Iraq denied reports of printing new banknotes without zeros on August 26. The authority stated that such claims lacked official basis. It noted that any redenomination requires a formal decision and multiple legal stages. Removing zeros is a technical adjustment that does not alter purchasing power or inflation rates.
Traders and policy shifts drive demand
Regional tensions and rumors of policy changes contributed to the pressure. Traders bought dollars on the parallel market to bypass the ASYCUDA customs system. A delay in dollar shipments into Iraq also added to demand. The monthly allocation for travelers was cut from $3,000 to $2,000 in July. This reduction affected individuals traveling for medical treatment.
Speculators engaged in short-term trading, expecting a future price drop. Hisham urged authorities to counter rumors and stop exploitation of uncertainty. The Central Bank stated its reserves are sufficient to meet current demand. It blamed speculation and regional conditions for the recent rate increase.
