Al-Zaydi and the dollar: Expectations of a breakthrough in the exchange market

An economic expert predicted on Wednesday that the formation of the new Iraqi government would contribute to lowering the dollar exchange rate against the dinar in local markets, noting that there was an expected “American support” that would positively affect the financial market.

Sulaymaniyah currency market spokesman Jabbar Goran told Shafaq News Agency that the resumption of government projects after the formation of the government will lead to an increase in spending in Iraqi dinars and a full return of the ministries’ activity, which will boost demand for the local currency and support the stability of the exchange rate.

He added that the United States renewed its support for the formation of the government of Prime Minister-designate Ali al-Zaidi, considering that this support gives a “positive signal” to the financial markets, provided that no new tensions or wars occur in the region.

He explained that there was confusion surrounding the news regarding the “stopping of dollar transfers” from the United States to Iraq, indicating that Baghdad had requested the transfer of part of the surplus oil revenues deposited in JPMorgan Chase Bank and subject to the supervision of the US Treasury Department.

He pointed out that Iraq does not need all of its oil revenues immediately, so part of them is kept in the United States, noting that Washington informed Baghdad that it would postpone the transfer of additional funds until after the formation of the new government.

Goran predicted that the exchange rate of 100 dollars would fall to less than 150,000 dinars in the coming period, if regional conditions stabilize and there is no security or military escalation.

He stressed that the natural difference between the official price of 132,000 dinars per 100 dollars and the market price should remain within the limits of 12,000 to 13,000 dinars only.

Shafaq.com