Iraq devalues dinar

Iraq's central bank devalued the dinar against the dollar on Wednesday, the first time in more than three years, as the economic fallout from the Middle East war deepens.

The bank set the dollar's selling price at 1,520 dinars, up from 1,320 since February 2023. In a statement issued Tuesday, it said the decision was taken at the government's request and ordered banks, financial institutions and exchange bureaus to apply the new rate from Wednesday.

Iraq normally draws about 90 percent of its revenue from oil exports. Those have fallen sharply since Iran closed the Strait of Hormuz in February, Iraq's only maritime outlet, where its tankers now pass only in small numbers. Foreign currency reserves have dropped by about $20 billion, forcing the government to borrow to pay salaries and pensions. Public employees and retirees make up 20 percent of Iraq's 46 million people.

The devaluation gives the authorities more dinars for each dollar of oil revenue.

Before the war began in late February, Iraq produced about four million barrels of crude a day and exported an average of 3.4 million, mostly through Hormuz. Exports recovered to 2.6 million barrels a day in September after a steep fall, according to the authorities.