Iraq devalues currency as Middle East war hits oil exports

Iraq's central bank has devalued its currency, the dinar, against the dollar. The new official exchange rate is 1,500 dinars to the dollar, up from around 1,300 dinars to the dollar. According to Fortune and The Economic Times, this change was decided at a meeting of Iraq's Cabinet to meet financial, economic, and monetary requirements.

The devaluation is attributed to the crisis caused by the Middle East war, which has hurt Iraq's oil exports. The country's economy relies heavily on oil exports, most of which were previously shipped via the Strait of Hormuz. However, due to disruptions in the strait, Iraq has had to resort to shipping oil overland through Syria, a more expensive and less efficient route. The devaluation means that each dollar earned from oil exports brings in more dinars, helping the Iraqi government cover domestic spending.

However, the devaluation also makes imports more expensive, potentially driving up prices for consumers. The gap between the official rate and the market rate used by exchange shops had widened in recent months, and the unofficial rate had risen to over 1,600 dinars to the dollar before the official devaluation. After the announcement, the market rate jumped to over 1,700 dinars to the dollar, according to The Economic Times.

Brief written by urgent.news from Punch Nigeria, Punch, Fortune, The Economic Times - Top News — 4 reports on this story. Machine-written — may contain errors; check the original before relying on it.