Iraqi protesters gather near the country’s central bank over the recent devaluation of the dinar.

Iraqi protesters gather near the country’s central bank over the recent devaluation of the dinar.

Hundreds of protesters demonstrated near the Central Bank in the Iraqi capital Baghdad on Wednesday, angered by the recent devaluation of the Iraqi dinar and demanding that the government take steps to stabilize the currency.

The mostly young protesters demonstrated amid a heavy security presence, many carrying the Iraqi flag and banners with slogans. One slogan read: “Politicians are the ones who cover up the financial corruption of the banks.”

Iraqi Prime Minister Mohammed Shia al-Sudani accepted the resignation of the country’s Central Bank Governor Mustafa Ghaleb Mukheef on Monday following a week-long slide in the Iraqi dinar. Mukheef, who had held the post since 2020, was succeeded by Muhsen al-Allaq as acting governor.

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The dinar hit new lows last Friday, reaching around 1,670 to the dollar. The currency has lost almost 7% of its value since mid-November. The official exchange rate stands at 1,470 dinars to 1 dollar.

On Wednesday, the street exchange rate was around 1,610 to the dollar.

Some politicians in Iraq have attributed the drop to recent moves by the US Treasury.

Demonstrators protest outside the Iraqi central bank as the Iraqi dinar plunges against the US dollar, in Baghdad, Iraq, on January 25, 2023.

Demonstrators protest outside the Iraqi central bank as the Iraqi dinar plunges against the US dollar, in Baghdad, Iraq, on January 25, 2023.
(AP Photo/Hadi Mizban)

The United States has significant control over the supply of dollars from Iraq, as Iraq’s foreign reserves are held at the US Federal Reserve. Late last year, the Federal Reserve began imposing stricter measures on transactions, which has slowed the flow of dollars into Iraq, including the blacklisting of several dollar-market banks on suspicions of money laundering. .

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In the Lebanese capital, Beirut, dozens protested in front of the Central Bank, denouncing the fall of the Lebanese pound, which began in 2019. The value of the pound hit a new low last Thursday, trading at 50,000 to the dollar, as the deeply divided Parliament was unable to elect a president for the 11th time.

Until 2019, the Lebanese currency was pegged to the dollar at a rate of £1,500 per dollar. This is still the official rate, but in practice, almost all transactions are made at the black market rate.

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Meanwhile, five European countries are investigating the embattled governor of Lebanon’s central bank, Riad Salameh, who remains in office, over allegations of laundering public money in Europe. Switzerland first opened an investigation two years ago, followed by France, Germany, Luxembourg and Liechtenstein.

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