Iraq Devalues Dinar 14.5% as Hormuz Disruption Drains Oil Revenue
Iraq devalued the dinar by 14.5% on Wednesday, setting the exchange rate at 1,520 per dollar after months of disruption to oil exports through the Strait of Hormuz cut into the government’s main source of revenue. The cabinet adopted the new exchange-rate structure on Tuesday, with the changes taking effect Wednesday. The decision set the Finance Ministry’s purchase rate at 1,500 dinars per…
Iraq has devalued its currency, the dinar, by 14.5% to 1,520 per dollar, in response to a disruption to oil exports through the Strait of Hormuz, which has significantly reduced the country's oil revenue. The cabinet's decision, effective from Wednesday, will increase the dinar value of Iraq's dollar earnings while raising import costs and reducing household purchasing power.
Oil sales are Iraq's primary source of state revenue, with shipments falling to about 2.34 million barrels per day (bpd) in August, from over 3.6 million bpd before the war. The devaluation comes as Baghdad prepares a 2027 budget with spending of 217 trillion dinars and a projected deficit exceeding 40 trillion dinars.
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