The Iraqi dinar exchange rate is recently under a new threat about the growth process with economic and financial stability in Iraq, especially with the downfall in the economic growth and increasing unemployment ratio which caused a high rate of poverty with the strictness enforced by the Iraqi budget 2015. The Iraqi dinar lost its market value of more than 15 percent with a record period of time and the Iraqi dinar exchange rate declined from 1220 Iraqi dinars per U.S dollar to 1420 Iraqi dinars per U.S dollar. There are a number of factors involved in declining the Iraqi dinar exchange rate such as handle the economic and financial performance using CBI’s monetary policy which was steamed after restricting the Iraqi Central Bank not to sell more than 75 million U.S dollars per day in their foreign currency sales auction, as mentioned in the Article 50 of the Iraqi budget 2015.
The downfall in the crude oil price globally created many problems in the country such as economic instability and lack of financial resources which increased ratio of poverty in the country. The involvement of political sources increased the administrative and financial corruption in the daily auction sales of foreign currency, as well as the involvement a large number of private banks in currency auction and most of them smuggled U.S dollars abroad and money laundering issue which made economic disaster in the country. The Iraqi government should take some major steps with the independent work by the CBI to stabilize the Iraqi dinar exchange rate.