Iraq's central bank devalued the dinar currency against the dollar on Wednesday, with the country facing a deepening crisis brought on by the Middle East war. Crude oil sales account for nearly 90 percent of Iraq's revenue but its exports have been hurt by the outbreak in February of the conflict between Iran and the United States, which choked off the Strait of Hormuz shipping route. Consumer prices have also risen, while Iraq's foreign currency reserves have fallen by around $20 billion. The central bank said in a statement late Tuesday that based on a government decision, "it had decided to adopt... a selling price of the US dollar to the public of 1,520 dinars.” The rate had been fixed at 1,320 dinars since February 2023. The bank instructed financial institutions to "stop using the previous rate and adopt the new rate as of the start of the business day on October 7,” AFP reported. Iraq relies heavily on foreign currency generated by oil sales to finance imports, stabilize the dinar, and pay the salaries of public sector employees and retirees.
