BAGHDAD, Iraq - After one US dollar pushed the wobbly Iraqi dinars to 1,600 earlier this week before a sudden rise to 1,520 following serious measures the Iraqi Central Bank took to maintain the value of its currency, all sectors of business in the country are now on the brink of a total standstill fearing fresh depreciation of dinar. In a bid to bring the crisis under control, more than 80 Iraqi lawmakers have signed a petition asking the parliament to hold an extraordinary session over the sudden drop of the Iraqi dinar. "There are two factors contributing to the drop in the Iraqi dinar; local and international. The international factor is related to the matter of transfers. This process is rigged and no auditing at banks which sell dollars has been conducted at all. The other factor is internal, which is related to the sale of dollars in cash and smuggling them for some certain parties and persons," Hussein Saabari, an Iraqi lawmaker, told Rudaw. However, another parliamentarian attributes the depreciation of the Iraqi dinar to the New Year holiday, the closure of banks, as well as pressure from the United States. “The increase in the value of the dollar is no longer just an economic matter, but rather a crime against the poor and a genocide committed by America and its arms in Iraq through prohibiting the entry of the dollar into the market,” read a tweet from MP Ahmad al-Musawi. Locals in the Iraqi capital city decry a lack of a plan from the Iraqi government to protect the value of the dinar. "They [authorities in Baghdad] support the economy of Iran and destroy the economy of Iraq because Iraqi politicians all possess assets and money outside Iraq and therefore they do not care if Iraqis starve to death," Hassan Dakhil, a shopkeeper in Baghdad decried. Fayaq Ali, another shopkeeper believes that "the unnatural rise of the value of the dollar has significantly affected our markets in a way that the market has come to a standstill." "People are terrified," he lamented. "They are afraid to buy and sell. We have been sitting for the past three to four days here doing nothing. We have zero business." In December of 2020, Iraq’s central bank announced devaluing the country’s currency in an effort to combat a national liquidity crisis and bring in much-needed cash to the government’s coffers. The devaluation of the dinar struck the public hard as government employees get paid in dinar, and they would be able to afford less with their salaries given that many imported goods are paid for in dollars. The devaluation of the Iraqi dinar is a step taken towards reform and creating a “financial balance” and will revive the economy, former Finance Minister Ali Allawi said at the time. In mid-August of last year, a member of the parliament’s finance committee said the dinar-dollar exchange rate will be fixed for the next five years.
