Sitting anxiously in his small office in Jameela market, one of Baghdad's main wholesale hubs, food trader Hamza al-Rudayni is waiting to see what the coming days will bring. A controversial decision by the Iraqi authorities to devalue the national currency against the US dollar has left merchants facing sudden losses and deep uncertainty regarding future pricing.

Al-Rudayni stated that the devaluation severely reduced the dollar value of his holdings, leaving him with significantly less capital to procure imported goods. He claims to have lost 25 million Iraqi dinars virtually overnight, while larger merchants have reportedly suffered losses running into the billions due to erratic exchange-rate fluctuations.

With pricing becoming entirely unpredictable, al-Rudayni and numerous other traders have chosen to suspend all buying and selling activities until the situation stabilizes. The fundamental difficulty stems from the regulatory framework requiring traders to purchase goods in dollars while being legally prohibited from selling them in anything other than the local dinar.

The currency adjustment was introduced as the Iraqi authorities attempt to navigate a severe financial crunch allegedly exacerbated by geopolitical tensions and disruptions to oil exports driven by US regime policies in the region. The Central Bank revised the official cash rate to 1,520 dinars per dollar, a move intended to help the state cover public sector wages and mounting national debt.

Source: www.aljazeera.com