Rise of Iranian Rial brings bad news for Kurdish economy

Hemin Salih – BasNews (Erbil): 2.12.2013 – Following the Iranian nuclear deal with the West, the Iranian Rial has increased against the Iraqi Dinar, affecting the Kurdistan Region’s economy.Iran is one of Iraqi Kurdistan’s main trade partners, with millions of Iranian products imported to the Kurdish region each year. Economic experts believe that the rise of the Rial will have negative effects on the Kurdish economy, while others fear there will be a price rise of Iranian products in the Kurdish market.

According to Kurdish traders who work with the Iranian currency, the Geneva deal has resulted in them losing money when changing Rial to Iraqi Dinar.Prior to last week’s deal, US $1 was worth 3,000 Iranian Rial. Following the deal, the Rial’s worth jumped by 3% against the US Dollar.

According to the Erbil exchange market, many people have profited from buying Iranian Rials, however, many more lost money as most Kurdish traders work with Iraqi Dinars or USD.

“One Kurdish businessman lost US $150,000 after the Rial rise against the USD and ID,” Said Hiwa Muhammad who works at the Erbil exchange Market.  

Kurdish economist Abdul Wahid Taha believes the rise of the Iranian currency will affect the Kurdish Market in more ways than one. “The Kurdistan Region relies heavily on Iranian goods and with the Rial jumping up considerably, it will increase the price of Iranian products in the Kurdish markets,” Taha told BasNews. Taha also explained that in recent years a lot of Kurds have gone to Iran as a result of the ID being stronger than the IR and Iran being a cheaper tourist destination as a result of it.