Baghdad:The Central Bank of Iraq has confirmed that the decision to adjust the exchange rate was made as an exceptional precautionary measure to ensure the sustainability of budget financing and maintain the state’s financial stability. This adjustment is also expected to support local industry and national products.

According to the Iraqi News Agency, Haider Ghazi, Director of Media at the Central Bank of Iraq, stated that Iraq is currently experiencing an exceptional situation due to the closure of the Strait of Hormuz and a decrease in oil exports, resulting in a decline in revenues. The government had previously relied on discounting remittances at the Central Bank, which could lead to accumulating debts, prompting a serious discussion about the financial situation.

Ghazi elaborated that the exchange rate adjustment is intended to sustain financial stability and secure the budget’s financing needs. Despite potential repercussions, the decision was made to prevent further damage that could arise if the current financial situation persisted.

The adjustment is anticipated to positively impact the local market by stimulating national industry, which has been facing competition from lower-priced imported goods. By adjusting the exchange rate, the Central Bank hopes to increase production and encourage reliance on locally produced goods.

Addressing the disparity between the official dollar exchange rate and the rate in the parallel market, Ghazi noted that this gap is related to commercial operations outside official regulations. The purchase of dollars from the parallel market often involves goods that bypass customs, tax procedures, and official inspections.

Ghazi emphasized that the government is working to control borders and tighten procedures for inspecting goods, ensuring their entry through legal and official channels.