Iraq Raises Dollar Rate to 1,520 Dinars as Oil Revenue Slips

Iraq’s central bank raised the public dollar-selling rate to 1,520 Iraqi dinars from 1,320, weakening the currency as oil exports face disruption around the Strait of Hormuz.

The Central Bank of Iraq put the new exchange-rate structure into effect Oct. 7. It set the Finance Ministry’s dollar purchase rate at 1,500 dinars and the bank-sale rate at 1,510 dinars per dollar, creating separate rates for government purchases, bank sales and public transactions.

The change increases the dinar value of Iraq’s dollar-denominated oil receipts, which can help the government cover domestic expenses. It also makes imported food, medicine, machinery and other goods more expensive in local-currency terms.

The move is often described as a 14.5% devaluation, but the precise change depends on the calculation. Raising the rate from 1,320 to 1,520 dinars per dollar is a 15.2% increase in dinars per dollar, implying an approximately 13.2% decline in the dinar’s value against the dollar.

Iraq sells crude oil in dollars while paying much of its domestic spending in dinars. The new rates began applying Wednesday.