Wednesday's devaluation of the the Iraqi Dinar (IQD) by approximately 15 percent follows months of pressure on the currency; the dollar has recently reached over 157,000 dinars per $100 on the parallel market,
It is not the first time Iraq has taken this step. In December 2020, the CBI cut the dinar's value by about 20 percent to protect foreign reserves and help the government pay public sector salaries after oil prices collapsed. That move sparked public anger at the time. In February 2023, the cabinet adjusted the rate the other way, to 1,310.
The argument for devaluation is that the government receives more dinars for every dollar of oil revenue, which helps it meet its dinar spending. The argument against is that Iraq imports almost all its goods, priced in dollars. A weaker dinar therefore raises prices for ordinary Iraqis without much benefit from cheaper exports.
For those holding dinars outside Iraq in hope of a revaluation, this is a reminder that official rate changes can go down as well as up. We covered the options for holders in "You Bought Iraqi Dinars. Now What?"
We Want to Hear From You
We would like to hear from readers in Iraq and those doing business with the country. Please share your views in the comments section below:
- How has the new rate affected you, your household or your business so far?
- If you import goods, have your suppliers or customers changed their prices? If you export or earn in dollars, has the change helped?
- How are you handling existing dinar-denominated contracts, salaries or invoices?
- Was the devaluation a good idea? What should the CBI or the government have done instead?
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