ERBIL, Kurdistan Region – A sharp fall in the exchange rate of the Iranian rial against the US dollar has reduced the price of Iranian goods in the Kurdistan Region by 30 percent, boosting demand. Those dealing with rials in the exchange market, however, have been hit.
“Everyone who deals with [Iranian] rials, whoever has rials worth $100 loses $20 to $30. [In total] I have lost $20,000 to $30,000 dollars from dealing with rials,” Ghazi Saadi, an exchange dealer and shop owner, told Rudaw.
A month ago, $100 was worth 36,630 Iranian rials. Today, $100 is worth about 37,076 Iranian rials, according to official exchange rates.
While rial dealers are feeling the pinch, consumers of Iranian goods have certainly felt the benefit.
“The material that we would usually buy for $14 to $15 we can now buy for $12 to $12.50. In general Iranian goods have become cheaper by 30 to 40 percent,” Mohammed Khalil Ibrahim, a trader of Iranian goods, told Rudaw.
The market has seen a resurgence and demand has increased by 15 percent, he added.
Demand is especially high among segments of the population suffering the effects of the financial crisis in the Kurdistan Region.
“Due to the rial decreasing, prices have decreased by 50 percent, but because the [Iranian] traders are losing, they have increased the prices by 25 percent. With this 25 percent we can make changes to the market and decrease the prices,” Luqman Khalid, another trader of Iranian goods, told Rudaw.
Trade in 2016 between the Kurdistan Region and Iran amounted to $6 billion. This fell to around $5.05 billion in 2017.
Tehran closed three border crossings with the Kurdistan Region at the request of Baghdad after September’s independence referendum. It reopened them in early January.
Iran, alongside Turkey, is one of the major sources
of commercial products entering the Kurdistan Region.