Part 10 of 15
The official rate of 1,310 and the Central Bank’s dollar window: how it works, and why the street pays more
Three official rates in twenty years, one window that sells dollars to banks, and a gap to the street that has ranged from two to seventeen percent. What the official rate is, who gets it, and what the “revaluation” rumours…
Read the one before this?
Dollar rate in Iraq today: how the number is made, and how to read it
Every conversation about the dollar1,588+0.52% in Iraq eventually reaches the same number: 1,310. It is the rate on bank statements and customs forms, the rate a government salary is silently benchmarked against, and the rate that the exchange offices in the street never actually charge. This article explains where 1,310 comes from, how the Central Bank’s daily dollar window works, who is allowed through it, and what the numbers say about the gap between that rate and the one the rest of the country pays.
Three official rates in twenty years
| Period | Bank buys at | Sells to the public at | What changed |
|---|---|---|---|
| 2004 to December 2020 | 1,182 | 1,190 | Sixteen years of a fixed peg after the 2003 currency reform |
| December 2020 to February 2023 | 1,450 | 1,460 | A 23 percent devaluation to close a budget hole after oil prices collapsed |
| February 2023 to today | 1,300 | 1,310 | A 10 percent revaluation after the market rate spiked in early 2023 |
Dinars per dollar. The “sells to the public” figure is the rate licensed banks are permitted to charge customers, and it is the one most people mean by the official rate.
The peg is a policy choice, not a market outcome. Iraq earns almost all of its foreign currency from oil, which the state sells in dollars; the Central Bank then sells those dollars into the economy at a fixed price. The rate moves only when the government decides it should, which has happened twice since 2004.
The window: how dollars leave the Central Bank
The mechanism behind the official rate is the Central Bank’s daily foreign-currency sale, still commonly called the auction although it no longer runs as one. Each working day the bank sells dollars to licensed banks at the official rate, in two forms: cash dollars handed over for banks to sell to their customers, and transfers abroad to pay for imports and other approved foreign payments. The transfers are the larger part by far, and since late 2022 every one of them passes through a compliance platform that checks the importer, the goods and the recipient before the dollars move.
This is the point that separates the two Iraqs. A trader with complete paperwork, a real supplier abroad and a bank willing to process the file can buy dollars at 1,310. Anyone else, including most small importers, most travellers and anyone converting savings, buys in the market.
Who actually gets 1,310
- Importers with a letter of credit or a documented transfer, for goods on the approved lists, through a bank that has passed the compliance checks.
- Government bodies paying foreign contracts and obligations.
- Travellers, within limits. Banks are permitted to sell a capped amount of cash dollars to individuals with a ticket and a passport. Availability varies by bank and by month, and the queue is often the real limit.
- Students and patients abroad, through documented transfers, within caps.
Everyone else meets the market rate. That is not a loophole; it is the design. The bank rations cheap dollars to uses it wants to support, and the market prices the rest.
The gap, year by year
DinarView’s daily record of the market rate begins in May 2022, so the table starts there.
| Year | Official selling rate | Market average | Gap | Widest month |
|---|---|---|---|---|
| 2022 (from May) | 1,460 | 1,486 | 1.8% | December, 1,520 |
| 2023 | 1,310 (from Feb) | 1,537 | 17.3% | February, 1,728 peak |
| 2024 | 1,310 | 1,497 | 14.3% | October, 1,527 |
| 2025 | 1,310 | 1,438 | 9.8% | January, 1,508 |
| 2026 (to early September) | 1,310 | 1,529 | 16.7% | June, 1,552 |
Dinars per dollar, from DinarView’s daily record; the gap is the yearly average market rate over the official selling rate.
The shape is instructive. In 2022 the official rate of 1,460 was close to where the market cleared, and the gap was under two percent. The compliance tightening on transfers at the end of that year cut the supply of official dollars to the market, and the market rate ran up to 1,728 in February 2023. The Central Bank responded by strengthening the official rate to 1,310, which made cheap dollars cheaper for those who could get them but did nothing to widen access; the gap has not been below nine percent in any year since.
What the gap does to prices
The gap is not an abstraction. It is the difference between two price tags on the same shelf.
- Goods imported through the official window are priced off 1,310. Goods that came in through the market are priced off the street rate, currently around 1,546. A seventeen percent difference on the same product.
- A public-sector salary of 1,000,000 dinars is worth $763 at the official rate and $647 at the market rate. The second figure is the one that buys a phone, a flight or a semester abroad.
- Anyone holding dinar savings has a one-way interest in the gap closing; anyone holding dollars, the reverse.
The “revaluation” claims, measured against the data
A persistent set of online claims promises that the dinar is about to be revalued to a fraction of a dollar, turning small holdings of notes into fortunes. The record above is the plain answer. The official rate has moved twice in twenty years, by 23 and 10 percent, in both directions, by government decision announced in advance. The market rate has ranged between 1,390 and 1,728 per dollar in the four years DinarView has recorded it. Nothing in either series resembles a thousandfold move, and no central bank on earth revalues a currency by selling it at one rate on Monday and a rate a thousand times stronger on Tuesday. The notes sold to foreign buyers as an investment on this promise are real dinars; the promise is not.
Questions people ask
Is 1,300 or 1,310 the official rate?
Both, for different parties. 1,300 is the rate the Central Bank sells to banks; 1,310 is the rate banks are allowed to sell to customers. DinarView shows 1,310, because it is the rate a person can encounter.
Does the official rate change day to day?
No. It is fixed by decision. DinarView reads the Central Bank’s published table daily so that if it changes, the site changes with it, but in practice it moves years apart.
Why not just use the market rate for everything?
Because the peg is how the state converts oil dollars into a dinar budget at a predictable rate, and how it keeps the price of essential imports down. The cost is the gap, and the queue at the window.
Where can I see both rates together?
On every DinarView page. The rate board shows the official table beside the market for every currency the bank publishes, with the gap for each.