Russia Expected to Extend Support Iraq Against ISIS
Value of the Dinar in 2016
Prime Minister Haider al-Abadi has made enacting new reforms the cornerstone of his platform since assuming office. He has recently tried to enact a series of new policies via executive orders, but Parliament blocked his efforts, stating that he will need their approval to proceed.
Despite the setback, Abadi is intent on advancing his reforms, which should ease concerns in the region. He is expected to work closely with Parliament to introduce new solutions to curb corruption, modernize infrastructure and stimulate the economy. Iraq is also making significant progress on multiple other fronts, which should affect the value of the Dinar in 2016.
Vladmir Putin Announces Plans to Attack ISIS
Russian President Vladmir Putin had previously pledged to offer aid to Iraq in its fight to quash militant resistance of the Islamic State of Iraq and Syria. He was been hesitant to follow through on these promises, but recently renewed his commitment after a Russian plane was allegedly taken out by ISIS terrorists. Russia has responded by sending 4,000 troops and missile systems to Syria in retaliation.
“We have calculated all possible threats. We have sent not only fighter jets, bombers and helicopters, but also missile systems,” stated Colonel General Viktor Bondarev, head of the Russian air force.
Russian support is expected to reduce the costs the Iraqi government has faced fighting the insurgents. It will also weaken resistance, thereby enabling the government to reclaim captured territories.
Abadi Targets Corruption
Corruption was a major cause for concern while Abadi’s predecessor was in office. A couple members of the former Maliki Administration have been indicted on corruption charges. The most recent was former environment minister Sargon Lazar Slewa, who was sentenced to two years in prison by a Baghdad court on Thursday. The details of the case have yet to be released, but the conviction illustrates the central government’s dedication towards ending official corruption.
Dinar Value and Exchange Rate – Trading Remains Stable
A couple of weeks ago, the outlook for the Iraqi Dinar had been relatively neutral. However, recent trends appear to have stabilized the value of the currency, which is encouraging for Dinar traders.
Value Rises Sharply
The value of the Dinar had plummeted in September, but has since made a sharp recovery. Data from Xe.com shows that the Dinar is currently trading at its highest value in over a year.
There could be a number of factors driving the change. Rising oil prices may be one of the primary reasons the currency is gaining value. Prices recently reached $50 a barrel, which is much higher than the prices they were trading at in the summer. Some experts believe that oil prices will never return to $100 a barrel, but they are still confident that the market will continue the rebound.
Gradual progress in the war against ISIS could also be driving demand for the Dinar. Currency traders are probably becoming more optimistic that the economy will rebound as Iraq regains territories and can boost oil production without fearing attacks from militants. Foreign direct investment is probably also on the rise as more firms feel that the threat of ISIS is starting to subside.