Iraq devalues dinar as oil-export disruption strains public finances
Baghdad has weakened the dinar under a new exchange-rate regime as disrupted oil exports reduce hard-currency income and increase pressure on the state budget.
Iraq’s central bank revised the official exchange rate to 1,520 dinars per US dollar on October 7, a move approved by the Cabinet as the country faces lower oil-export earnings amid regional shipping disruption. The change raises the dinar value of dollar-denominated oil receipts, potentially easing the government’s ability to finance domestic spending.
The trade-off is higher local-currency costs for imported goods and a likely hit to household purchasing power. The central bank said foreign reserves remained sufficient to cover external trade, payment-card transactions and travelers’ cash needs, but the adjustment underscores Iraq’s exposure to interruptions in its oil-export routes.
Original reporting: Al-Monitor ↗