Dinar Woes: Iraqi Currency Traders Break Sanctions

In Iraq, where barely anyone has a bank account, the trade in foreign currencies is largely unlicensed. Now money traders are smuggling US dollars to sanctioned Syria and Iran. And the Iraqi govt may well be using the situation for its own political ends too, according to this report from NIQASH.

The Iraqi dinar is at risk. That is the pronouncement made by Khadir Sadoun, who sits on the sidewalk in the upmarket Arasat neighbourhood in central Baghdad. But Sadoun didnt study business or economics, he probably doesnt even know about the sanctions on Iran and Syria that are causing the risks he is talking about. In fact, it is the market place has taught him all he knows.

And my business is flourishing, Sadoun adds, as he wraps a rubber band around a pile of currency. For the first time in years, Iraqis are exchanging their local dinars for US dollars in this way, the trader said, indicating the large piles of cash he was working with.

Over the past few weeks, the market exchange rate has seen the Iraqi dinar plummet against the US dollar. In part this is due to the current, increased demand for the US dollar. This is regional: international sanctions have been imposed on two of Iraqs neighbours, Iran and Syria, and, as local analyst, Basim Antoin, explained: over the past few months theres been an increase in currency smuggling and this has led to an increase in demand for the US dollar.

Both Syria and Iran are suffering from a severe economic crisis because of international sanctions imposed upon them, economic strategist and Iraqs former Minister of Planning, Mahdi Al-Hafez, said. This is why they are coming to the Iraqi market in search of hard currency.

8 Responses to Dinar Woes: Iraqi Currency Traders Break Sanctions

  1. Stew May 22, 2012 at 1:55 am #

    None of these people seem to be aware the Central Bank of Iraq has announced a 100,000% increase in the value for the dinar starting in January.
    Everybody gonna be rich!!

  2. Antony May 22, 2012 at 9:51 am #

    Why don’t the banks market themselves more efectively ? Surely the first thing to do is to target small businesses by advertising and promotions ? Once businesses start using the banks the general public will surely follow.

  3. rick May 22, 2012 at 3:33 pm #

    [Offensive comment removed]

  4. RICHIE CHOP May 22, 2012 at 5:18 pm #

    Antony….do you really believe giving away free TV Sets will get them to use Banks….

    They make a living by selling USD on Black Market..trade in IQD’s and go sell USD..Iraqi Mafia running shit..Have some Merc friends there and No One uses IQD..only to trade for USD..thats it!

    That Place is gunna implode..Armad Chablibi will then take PM Spot ,and nothing happens with this IQD for many years to come..if we get lucky. Non Oil GDP is the way to any increase…

  5. JIMROBERTS May 23, 2012 at 7:25 am #

    Stew: how come that the central bank of iraq will going to announce the 100.000 increase in advance if they know this will going to affect the iconomy! they may announce that but the truoght is it will not going to happen! I have also dinar but I just go based on reallity.

  6. Triple xXx May 23, 2012 at 3:09 pm #

    @Stew….That is NOT true! The CBI has NOT announced a value increase in January. The only thing that the CBI has announced was the removal of the large demonstrations from circulation. That does NOT mean an increase in value!

  7. Stew May 23, 2012 at 3:28 pm #

    My post was a joke.
    Iraq is going to redenominate and most dinar holders will lose money. That’s no joke.

  8. DOC June 10, 2012 at 10:27 am #

    Stew enjoys lying,all someone have to do is read the articles.Which stated they had put the redenom on hold becuz they have 60 bil in reserve and it would be expensive to print more money and that there was no need.STEW why do you speak partial truth?Give your opinion but pls quit lying sir.I’ve been to several blogs on here and you have displayed a pattern of telling part truth.Who does that?Man are you that obsessed with being right?SMH WOW