Iraq devalues dinar by nearly 15% to ease cash shortage, traders scramble
The Iraqi government lifted the official dinar rate to 1,520 per US dollar, a move that has left wholesalers facing sudden losses and market paralysis.
Facing a severe cash crunch linked to the US-Israeli war on Iran and reduced oil flows through the Strait of Hormuz, Iraq’s government set a new official exchange rate of 1,520 dinars per US dollar, up from 1,320. Prime Minister Ali al-Zaidi said the devaluation was necessary to secure enough dinars for salaries and other mandatory outlays, after rejecting cuts, delayed payments, and foreign loans. Wholesale traders such as Hamza al-Rudayni describe losing 25 million dinars overnight and have suspended transactions, citing unpredictable pricing.
The Central Bank’s move is intended to increase dinar inflows from oil sales, while the Finance Ministry stresses timely salary payments as a priority. Economists like Nabil al-Marsoumi caution that adjusting the rate is a short-term fix that masks broader economic policy failures.
Why it matters
The devaluation affects everyday prices, salaries and Iraq's ability to fund public services amid a regional financial squeeze.
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