Iraq devalued its currency by about 20% against the dollar, the biggest cut on record, as the cash-strapped government faces an economic crisis brought about by low oil prices and crude-production cuts.
The central bank reduced the official rate to 1,450 dinar per dollar, the first devaluation since 2003, it said in a statement. That’s from about 1,190 previously. Dollars will be resold to local banks at 1,460 dinar apiece.
The embattled nation’s central bank is taking the steps to avoid depleting its foreign-currency reserves, with the government last month seeking upfront payments in exchange for a long-term crude-supply contract.
Prime Minister Mustafa Al-Kadhimi, who came to power in May, has warned that the government will struggle to pay civil servants without raising more debt.