Iraqis protest against dinar devaluation

1/25/2023 9:04:14 PM
Hundreds of protesters rallied on Wednesday near the Central Bank in the Iraqi capital, Baghdad, angered by the recent devaluation of the Iraqi dinar and demanding the government take action to stabilize the currency.

The protesters - mainly young people - rallied amid a heavy security presence, with many carrying the Iraqi flag and banners with slogans.

"We are sending a message to this lean and weak bank that does not protect its national currency," said protester Walid al-Madani.

The dinar hit new lows last Friday, reaching about 1,670 to the dollar. The currency has lost nearly 7% of its value since mid-November.

The official rate stands at 1,470 dinars for $1. On Wednesday, the street exchange rate was about 1,610 to the dollar.

Iraq’s Prime Minister Mohammed Shia al-Sudani on Monday accepted the resignation of the governor of the country’s Central Bank, Mustafa Ghaleb Mukheef, following the weekslong plunge of the Iraqi dinar.

Mukheef, who had been in the post since 2020, was replaced by Muhsen al-Allaq as acting governor.

Some politicians in Iraq have blamed the drop on recent measures by the U.S. Treasury.

The U.S. has significant control over Iraq’s supply of dollars as Iraq’s foreign reserves are held at the U.S. Federal Reserve.

Late last year, the Federal Reserve began imposing stricter measures on transactions, which have slowed the flow of dollars into Iraq, including blacklisting a number of banks from the dollar market over suspected money laundering.

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