Erbil:The Central Bank of Iraq (CBI) has emphasized that its primary responsibility is to stabilize the value of the Iraqi dinar against foreign currencies.

According to Iraqi News Agency, Samir Fakhri, representing the Governor of the Central Bank of Iraq, made this statement at the Middle East Forum for Research and Peace (MERI) held in Erbil. Fakhri highlighted the importance of the exchange rate for Iraq, noting that the country’s economy heavily relies on dollar revenues due to its rentier nature.

Fakhri explained that Iraq’s income sources are dependent on external demand, and government spending in dinars plays a crucial role in the economy. The use of the dinar for government expenditures is linked to oil revenues, with the exchange rate being a key factor in this relationship.

He further stated that maintaining the local currency’s value against foreign currencies is a critical mission for the Central Bank. Growth in the private sector is seen as a way to boost the Gross Domestic Product (GDP) and reduce the demand for the dollar.

Fakhri also pointed out that government budget spending in dinars generates dollar demand through the Central Bank, given the limited contribution of local economic sectors to the GDP. He stressed the need to develop the private sector to enhance its contribution to the GDP, which would help in decreasing the demand for the dollar. Currently, 60% to 70% of spent dinars convert into demand for dollars, with the rest accumulating in the Central Bank’s reserves.