Why IQD is Facing Reduction in Its Value?

The government of Iraq with the cooperation of the central bank of Iraq is playing well in the economic ground of the world to regain the value of the dinar in local and international level. The central bank of Iraq is facing a major issue in controlling the volume of foreign currency in the country which directly affects the value of the Iraqi dinar. For the last 10 weeks, the central bank of Iraq has been losing control over the demand and supply of the dollar in the market.

Reason behind this is the corruption on a large scale in the auction system of Iraq. Central bank of Iraq introduced a rule for participation in auction of central bank of Iraq to buy Iraqi dinars. Central bank authorized interior ministry to verify the credibility of companies before taking part in the auction. Instead of working with devotion, the employees at the interior ministry started taking bribes to settle the issues between Iraq central bank and the company.

This mentality destroyed the merit of the central bank to take part in the auction. In this way the corrupt companies started taking part in the auction. These companies buy US dollars from the central bank of Iraq more than their actual need and further sell them in nearby countries at profitable rate. Due to excessive demand and less supply of foreign currency, Iraqi dinar further loses its value in the trade market. The central bank of Iraq needs to combat this situation with iron hands so that Iraqi dinar may regain its value in the market.

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