An economist explains the reason for the recent changes in the dollar’s price in the Iraqi market
1,003 Economy 11/30/2020 12:27 ta
Baghdad today - Baghdad
Today, Monday (November 30, 2020), the economic expert, Manar Al-Obeidi, explained the reasons for the recent changes in the exchange rate of the dollar in the Iraqi market.
Al-Obaidi said in an interview with (Baghdad Today), that "it depends first of all in Iraq on supply and demand, which means that the supply results from the amount of the amount offered by the Central Bank for sale in exchange for the demand requested by the local market (purchasing power),
and whenever the supply increases from the Central Bank.
In exchange for the decline in demand, here the exchange rate of the dollar falls against the dinar, and the issue is the opposite.
If the supply from the central bank decreases and the demand from the local market increases, the dollar’s price rises against the dinar.
He added, "Of course, the decline in supply by the central bank, as a result of several factors.
First, the issue of lack of liquidity and the innovations that occur on cash liquidity and transfers, thus reducing the amount of sale and auction and this is the main aspect that affects the strength of the currency,
in addition to that there are other factors that affect On the strength of the currency, which is the volume of reserves in the central bank of foreign currencies or cash at the central bank to cover the Iraqi currency
and every currency needs a cover, and this cover was whether gold or a well-known foreign currency such as the dollar or the euro.
He continued, "Today, as a result of withdrawing the reserves from the central bank, due to the government's internal borrowing,
these matters led to the weakness of the reserve and when the reserve falls somewhat, it leads to a decrease in the value of the currency and
this has a fundamental role in determining the value of the currency and if there are new procedures regarding the auction process from The price of the dollar is expected to rise due to the decrease in the supply from the Central Bank.
On Sunday, the price of the dollar in Iraq reached the sale of 100 US dollars at 126 thousand Iraqi dinars by banking companies, but today it has reached the sale of 100 US dollars at 125.750 Iraqi dinars.