Assessments

An employee of a currency exchange counter shows a stack of local currency bank notes in the southern Iraqi city of Nasiriyah in Dhi Qar province on Dec. 20, 2020.

While the move will slow the drawdown of foreign currency reserves, it will increase the cost of living, and therefore will increase unrest.

Iraq's Currency Devaluation Will Prove a Double-edged Sword

Highlights

Iraq

Devaluing its currency will help Iraq slow the drawdown of foreign currency reserves but will increase the cost of living, weakening already fraught public support for Iraqi government efforts to implement other longer term reforms in 2021.

ASSESSMENTS

Iraq's Currency Devaluation Will Prove a Double-edged Sword

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