Iraqi protesters rally near the country’s central bank over the recent devaluation of the dinar

Iraqi protesters rally near the country’s central bank over the recent devaluation of the dinar

Hundreds of protesters gathered Wednesday near the Central Bank in the Iraqi capital, Baghdad, angry at the recent devaluation of the Iraqi dinar and demanding the government take action to stabilize the currency.

The protesters – mostly young people – gathered amid a heavy security presence, many of them carrying the Iraqi flag and banners with slogans. One slogan read: “The politicians are the ones who cover the financial corruption for the banks.”

The Prime Minister of Iraq, Mohammed Shia al-Sudan, on Monday accepted the resignation of the governor of the country’s Central Bank, Mustafa Ghaleb Mukheef, after a week-on-week fall of the Iraqi Dinara. Muhsen al-Allaq replaced Mukheef, who had been in the post since 2020, as acting governor.

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The Dinar hit new lows last Friday, reaching around 1,670 to the dollar. The currency has lost nearly 7% of its value since mid-November. The official rate stands at 1,470 dinars to $1.

On Wednesday, the street exchange rate was around 1,610 to the dollar.

Some politicians in Iraq have blamed the collapse on recent US Treasury measures.

Demonstrators protest in front of the central bank of Iraq as the Iraqi dinar falls against the US dollar, in Baghdad, Iraq, on January 25, 2023.

Demonstrators protest in front of the central bank of Iraq as the Iraqi dinar falls against the US dollar, in Baghdad, Iraq, on January 25, 2023.
(AP Photo/Hadi Mizban)

The US has significant control over Iraq’s dollar supply as Iraq’s foreign reserves are held by the US Federal Reserve. Late last year, the Federal Reserve began imposing tougher measures on transactions, slowing the flow of dollars into Iraq, including blacklisting several banks from the dollar market for suspected money laundering.

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In the capital of Lebanon, Beirut, dozens protested in front of the Central Bank, denying the slide of the Lebanese pound, which began in 2019. The value of the pound hit a new low last Thursday, trading at 50,000 to the dollar, as the country. Parliament has failed to elect a president for the eleventh time.

Until 2019, the Lebanese currency was pegged to the dollar at a rate of 1,500 pounds to the dollar. This is still the official rate, but in practice, almost all transactions are made at the black market rate.

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Meanwhile, five European countries are investigating the governor of Lebanon’s central bank, Riad Salameh – who remains in his post – over allegations of public money laundering in Europe. Switzerland first opened a probe two years ago, followed by France, Germany, Luxembourg and Liechtenstein.

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