Iraq defends dinar devaluation as oil revenues fall
The Central Bank says the exchange-rate move is an exceptional measure to protect budget financing amid lower oil income.
Iraq’s Central Bank defended the devaluation of the dinar, saying the measure was intended to preserve state finances during an exceptional period of lower oil revenue and regional disruption. The new framework raised the official cash selling rate to 1,520 dinars per US dollar, following a cabinet decision.
The bank said the move could limit wider fiscal damage and encourage greater reliance on domestic production, but a weaker dinar also raises the local-currency cost of imports. The decision puts renewed focus on Baghdad’s budget exposure to oil-export disruptions and the gap between official and parallel-market exchange rates.
Original reporting: Rudaw English ↗