The Iraqi Central Bank has implemented a new system to stabilize the foreign currency exchange rate against Iraqi dinar currency, especially the U.S dollar. So, the Iraqi local market experienced a significant amount of decline in the exchange rate of U.S dollars against Iraqi dinar. The U.S dollar exchange rate against Iraqi dinar currency reached at the lowest record level since last two years. It was supposedly due to restrictions in the Iraqi federal budget 2015 by restricting the Iraqi Central Bank to sell the amount of U.S dollars less than the one-third demand. It gradually increased the price of U.S dollar against Iraqi dinar currency. The month of February 2017 started experiencing a significant amount of decline in the exchange rate of U.S dollar against Iraqi dinar. The Central Bank of Iraq indicated that the currently experienced decline in the U.S dollar exchange rate in the Iraqi local markets was due to the new system implemented for the foreign currency selling operations.
The Central Bank of Iraq also confirmed its objective to taking extra amount of steps to achieve the target price. It is important that perfect coordination between Iraqi private banks and the Central Bank of Iraq performed a crucial role in maintaining the stability of foreign currency exchange rate against Iraqi local currency. A famous economic expert said that the intervention of the new system in the monetary policy would adjust the exchange rate in achieving the stability and balancing the demand & supply for the foreign currency. He explained the need to ensure the official exchange rate close to steadiness. It will put maximum ranges and fewer exchange rates in order to allow fluctuation between those limitations. It would provide a considerable amount of stability in the Iraqi domestic markets. It will reflect positive impact on the economic and financial condition in the country.