Iraq at an economic crossroads: Fears of a rising dollar and debate over remaining in OPEC
Anxiety continues to grip a large segment of the Iraqi population, particularly those with limited incomes and low salaries, amidst economic instability and conflicting reports regarding the exchange rate of the dollar against the dinar. The Iraqi public is most concerned about market prices and their susceptibility to government decisions regarding the dinar-dollar exchange rate, as well as the future of Iraq’s membership in OPEC, its oil export volumes, and the implications of these factors for the country’s economic policy and how the government will address them.
Former MP Rasoul Radhi told Al-Maalomah that “the ongoing financial crisis, coupled with regional developments and the current difficulties in exporting oil, will lead to a significant rise in the dollar exchange rate in local markets.”
He added that “the current exchange rate exceeds 155,000 dinars per 100 dollars and may rise further in the coming days, especially since the government intends to raise the official exchange rate if the economic situation remains unchanged.”
He explained that “the measures the government may take in the coming days aim to compensate for the shortfall in oil export revenues, and the official exchange rate is likely to increase by 6,000 dinars from its current level.”
For his part, economist Abdul Rahman Al-Mashhadani told Al-Maalomah that “talking about Iraq leaving OPEC is not a simple matter at all, as Iraq cannot leave the organization because it would not be able to withstand any price war that might erupt.”
He added that “Iraq has already suffered greatly from the price war between Russia and Saudi Arabia, which prompted Riyadh to reduce the price of a barrel of oil by more than $7 while increasing production by about 500,000 barrels, leading to a drop in the price per barrel to about $18.”
He pointed out that “Iraq lacks the resources to withstand any price war, in addition to its lack of a sovereign wealth fund and diversification in exports and production. Therefore, any decrease in oil prices will significantly affect it.” He emphasized the importance of Iraq remaining within OPEC, while exerting pressure to adjust its export quota, based on its high production capacity and its status as the fifth largest country in the world in terms of oil reserves.
In a related context, Abdul Rahman al-Jazaeri, a member of the Coordination Framework, confirmed in a statement to Al-Maalomah that “Prime Minister Ali al-Zaidi is an expert in economic affairs and continues to work on finding solutions to the economic problems that Iraq is currently suffering from.”
He continued, “Al-Zaidi’s expertise in the economic field has driven him to take action to find ways out of the current crises facing the country, which may lead to an increase in the exchange rate of the dollar against the Iraqi dinar.”
He added that “Iraq is moving towards a new economic program that may include raising the value of the dollar against the dinar, due to the economic hardship and problems facing the country, which the Prime Minister is working to address according to an economic vision aimed at enabling Iraq to overcome its crisis.” Arabs& Middle Easterners
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