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.
Iraq's central bank devalues dinar amid war-driven economic crisis © Mena Today
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.
US forces ended their mission in Iraq on Wednesday after more than two decades of war there, raising fears of a security vacuum that would embolden Iranian-backed Shi'ite militias and allow Islamic State to regroup.
US forces are set to withdraw on Wednesday from their last bases in Iraq, a departure celebrated as a victory by Iran and its allies, which have deep influence in the country where 4,500 Americans died during more than two decades of war.
Italy on Tuesday completed the withdrawal of its last troops from Iraq, ending a 12-year military presence in the country, a defence ministry statement said.
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