Iraq devalues currency as war and Hormuz closure squeeze cash
Iraq has officially devalued its currency again, setting a new official exchange rate of 1,500 Iraqi dinars per US dollar, according to a document seen by The National . The Council of Ministers approved the move late on Tuesday, based on a recommendation from the Central Bank of Iraq, the banking regulator said in a directive sent to all licensed banks, electronic payment companies and exchange…
The Iraqi government has recently devalued its currency for the second time in six years, adopting a new exchange rate of 1,500 Iraqi dinars per US dollar. This move, approved by the Council of Ministers, was recommended by the Central Bank of Iraq and was implemented on Monday. The Central Bank will purchase dinars from the Ministry of Finance at 1,500 dinars, with banks buying them at 1,510 dinars and the public paying 1,520 dinars.
The new rate is a response to a severe cash crunch caused by the Iran-Israel war and the closure of the Strait of Hormuz, which is crucial for Iraq's oil exports. Iraq generates over 90% of its budget in dollars from oil, but this oil must pass through Hormuz, making it vulnerable to disruptions. The reduced value of the dinar allows the government to pay salaries and other expenses without needing additional dollars, but it also leads to increased costs for imported goods such as food, medicine, cars, and construction materials.
Written by urgent.news from The National UAE's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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- Iraq devalues currency as war and Hormuz closure squeeze cash thenationalnews.com
- Iraq devalues its currency as Iran-U.S. war disrupts oil shipping routes winnipegfreepress.com
