Speculation Rises on the Future of Iraqi Dinar Under Prime Minister Sudani’s Economic Policies

Will Sudani Reverse Previous Decisions Impacting Iraq Currency?

Amidst the changing political landscape in Iraq, the question looming over the country’s economy centers on whether Prime Minister Mohamed Shia al-Sudani might alter the trajectory of Iraq’s currency policies, a subject discussed at length since his appointment on November 2, 2022. Observers within the Iraqi elite and the economist community are particularly focused on the decisions surrounding the iraq currency, namely the dinar value, which saw devaluation under the former government led by Mustafa al-Kadhimi.

Economic Strategies and the Iraqi Country Currency

Dr. Nabil Al-Marsoumi, a prominent academic and economist, highlighted that Sudani’s government program did not propose reversing the significant devaluation the currency in Iraq underwent. Critics, particularly those aligned with the pro-Iran Coordination Framework, heavily scrutinized Kadhimi’s government’s decision, utilizing the negative impact on the Iraqi people’s purchasing power as a basis for their opposition. Yet, it appears that the current administration, along with the Coordination Framework deputies dominating the parliament, might not be considering any amendments to the exchange rate within the government’s 2023 budget.

This insight suggests a possible stabilization or maintenance of the current dinar value, unlike the heightened expectations of a change back to pre-2020 exchange rates which would require the government’s budget to swell by an additional $24 billion. Although more than 50 MPs have petitioned for a reversal of the devaluation decision, the lack of enthusiasm from Sudani’s government suggests a confirmation of the erstwhile government’s move, despite the evident disapproval from various quarters.