On Saturday, Iraq devalued its currency by about 20% against the dollar, the biggest cut on record, as the cash-strapped government faces an economic crisis brought about by low oil prices and crude-production cuts.
The central bank reduced the official rate to 1,450 dinar per dollar, the first devaluation since 2003, it said in a statement. That’s from about 1,190 previously. Dollars will be resold to local banks at 1,460 dinar apiece.
The embattled nation’s central bank is taking the steps to avoid depleting its foreign-currency reserves, with the government last month seeking upfront payments in exchange for a long-term crude-supply contract.
Prime Minister Mustafa Al-Kadhimi, who came to power in May, has warned that the government will struggle to pay civil servants without raising more debt.
The central bank reduced the official rate to 1,450 dinar per dollar, the first devaluation since 2003, it said in a statement. That’s from about 1,190 previously. Dollars will be resold to local banks at 1,460 dinar apiece.
The embattled nation’s central bank is taking the steps to avoid depleting its foreign-currency reserves, with the government last month seeking upfront payments in exchange for a long-term crude-supply contract.
Prime Minister Mustafa Al-Kadhimi, who came to power in May, has warned that the government will struggle to pay civil servants without raising more debt.
