Business brisk for Iraq's money changers
Business brisk for Iraq's money changers
BAGHDAD (AFP) — At the money exchange market of El-Harithiya, located on one of Baghdad's traffic-choked arteries, business is brisk as residents increasingly head out to buy or sell hard currency.
Security in the Iraqi capital has improved considerably over the past six months, the high price of petrol has allowed the Iraqi government to pass a record budget, and the dinar local currency is gaining strength.
But memories of violence remain close to the surface.
In his shop piled high with mobile telephone cards he sells to top up his income, Abu Akram remembers the car bomb that ripped through his store nine months ago.
"Here is the reminder I have of it," he told an AFP journalist, tracing the line of a large scar which marked his left cheek and deformed part of his nose.
"It detonated less than 20 metres (70 feet) from my store," the trader said, describing the attack. He wears thick-framed dark glasses that covers part of the scar, and points to shrapnel from the blast embedded in the door frame.
Such attacks were part of the typical daily life of Baghdadis until they subsided following the "surge" of 30,000 extra US troops that peaked in mid-2007. Many of the US soldiers were assigned to Baghdad.
"I found myself in hospital and was told no one had visited the market for three days," Abu Akram recounted on a chilly February morning. He gets about 50 customers every day, not a booming business but enough to make a modest profit.
There are 60 currency exchange operations at El-Harithiya, including small storefronts like Abu Akram's that are identified by the word "Sharikat Sirafa" (Exchange Company) hand-painted in Arabic script on the windows.
The market is located in a mixed Shiite-Sunni neighbourhood area near the Green Zone, and benefits from the heavy security surrounding the fortified citadel.
Some money-changers work from tables placed on the street curb. Drivers roll down their window in heavy traffic to ask about the exchange rate, and some exchange money on the spot.
Others, like Abu Haider, a lean gentleman of thinning grey hair and bright blue eyes, strolls the sidewalk seeking customers. He wears a brown suit that has seen better days.
"What I make in profit is barely enough to survive," says Abu Haider, who stopped to visit Abu Akram to sip tea and swap stories.
The currency exchange trade is a gray market activity, tolerated by authorities but not exactly legal -- to exchange money officially one is supposed to go through a bank.
During Saddam Hussein's era informal money-changers were prosecuted, but today police patrolling El-Harithiya have bigger worries on their mind.
The trading day begins around 10 am (0700 GMT), and by the time it closes six hours later between one and two million dollars have changed hands.
To feed the demand for greenbacks, and to support the dinar, Iraq's Central Bank every day pumps between 40 and 70 million dollars into the national economy.
Money-changers who want dollars to trade fetch their bundles of greenbacks from the Central Bank headquarters on nearby Rashid Avenue. The round-trip visit may be short, but is filled with risks.
"Last year the cousin of Haj Saad, one of the wealthiest exchange agents, was returning from the bank," Abu Akram recalls. "He was attacked as he left his car, and they killed his nephew and stole one million dollars from him."
With the increased security and the rise in public spending -- fueled by a record 48 billion dollar budget -- money-changers are expecting to see a stronger dinar.
"There is a certain improvement in the exchange rate," said Abu Ali, 58, a jolly, pot-bellied vendor who owns a small store and has been in the exchange business for 30 years.
He repeats a rumor going around for months: that the Iraqi Central Bank plans to progressively strengthen the dinar.
"Eventually they will be able to eliminate three zeroes so that the dinar will be exchanged equally with the dollar," he said. Each US dollar is currently worth about 1,200 dinars, or 1,000 dinars on a good day.
Plans for a stronger dinar have not been confirmed by the government, and experts say the currency will be strengthened only after the national economy is healthy.
Meanwhile Abu Ali says he exchanges some 100,000 dollars each day, earning a one percent commission on standard sales. And he says he pays taxes on his profits -- something unusual in Iraq.