Demand Pressure, Not a Dollar Shortage
According to Marouf, the rise in exchange rates stems from a short-term surge in demand for foreign currency rather than a lack of available dollars. She linked this increased demand to:
Rumors and misleading expectations about future exchange rate movements.
Market uncertainty following the appointment of a new Central Bank governor.
Concerns over financial repercussions from regional tensions and interruptions to oil export routes.
Reasons for Confidence
Marouf argued that several factors support exchange-rate stability and suggest the disruption will be short-lived:
The official exchange rate is legally established within the federal budget framework and is expected to remain unchanged through the 2027 budget cycle.
Leadership changes at the Central Bank do not alter Iraq's broader monetary policy direction.
The government retains sufficient financial resources to meet key obligations, including public-sector salaries.
Iraq's foreign exchange reserves exceed $90 billion, providing enough coverage for more than a year of imports and serving as a significant financial safeguard.
Monetary authorities remain committed to preserving the dinar's purchasing power and containing inflation.
Warning Against Devaluation
The economist cautioned against any official move to weaken the Iraqi dinar. While such a step could temporarily boost government revenues, she argued it would likely lead to higher consumer prices, increased poverty, and greater unemployment, undermining the government's reform objectives.
Advice to Citizens
Marouf encouraged citizens, particularly those with limited savings, to avoid speculative currency trading unless they have a genuine need for foreign currency, such as travel, medical expenses, or imports. She noted that currency speculation is a zero-sum activity in which gains for some participants often result in losses for others, especially small savers holding dinar-denominated assets.
