limbo

Baghdad, Iraq – Sitting anxiously in his small office in Jameela market, one of Baghdad’s main wholesale markets, food trader Hamza al-Rudayni is waiting to see what the coming days will bring.

A decision by the Iraqi government to devalue the country’s currency, the dinar, against the US dollar has left traders like him facing sudden losses and uncertainty over the prices they should charge for their goods.

“I don’t know what to do,” al-Rudayni told Al Jazeera after the devaluation reduced the dollar value of his dinar holdings, leaving him with less money to purchase imported goods.

“All I know is I woke up a few days ago to discover that I had lost 25 million Iraqi dinars (roughly $16,500 at the new exchange rate) because of this decision, while larger merchants lost billions,” he said.

Al-Rudayni entered the wholesale trade market last year after losing his previous job at a private Iraqi bank that he says was sanctioned by the United States Treasury. He sold his car and used his savings to start trading with a larger merchant before recently launching his own business.

With exchange-rate fluctuations making prices unpredictable, al-Rudayni said he and many other traders have chosen to suspend buying and selling until the situation stabilises.

“Market activity has ground to a halt,” al-Rudayni said. “Traders buy goods in dollars but sell them in dinars, as regulations prohibit them from selling in dollars.”

That is the root of the problem for traders: A weaker dinar means they have to pay more in local currency for goods imported in dollars, while making it harder to determine the right price they should charge customers for goods they already have in stock.

Why devalue?

On October 7, the Iraqi government introduced a new official exchange rate against the US dollar, in an attempt to ease a financial crisis triggered by the US-Israeli war on Iran and the  disruption of oil exports through the Strait of Hormuz.

Before the war, Iraq exported around 3.5 million barrels of oil per day through the Strait of Hormuz, accounting for 90 percent of Iraq’s government revenue.

The Central Bank of Iraq decision set the rate at 1,520 dinars per US dollar for cash sales to the public. It was previously set at 1,320 dinars per dollar.

Devaluing the Iraqi dinar by almost 15 percent against the dollar allows the government to receive more local currency for every dollar of oil revenue it converts, helping it cover public spending, including government employee salaries.

“It is my decision and I am responsible for it,” Iraqi Prime Minister Ali al-Zaidi said during a meeting with parliamentary leaders on Thursday.

“I was facing three challenging options to cover salaries and other mandatory expenditures,” al-Zaidi added. “The first is to cut salaries by 35 percent … the second is to pay the salaries every 45 days … while the third is to resort to foreign loans.”

Al-Zaidi, a former banker, also said that his government had inherited public debt exceeding 208 trillion Iraqi dinars ($139bn at the new rate) when it took office in May. He said the government needed approximately 10 trillion dinars ($6.7bn) each month to cover salaries and other essential expenditure.

A shortage of liquidity

The crisis in the Strait of Hormuz had caused a severe financial squeeze for the Iraqi government.

Although the situation has eased somewhat in recent weeks after Iraq’s oil exports partially recovered, they have yet to return to their pre-war levels.

Mudher Mohammed Salih, the Iraqi prime minister’s financial adviser, said in August that the Central Bank of Iraq’s foreign currency reserves had declined from $106bn to approximately $80bn.

To make up for the loss of revenue, the Iraqi government has also turned to borrowing from domestic banks to cover salaries and other expenses.

A Finance Ministry official told Al Jazeera that ensuring salaries were paid on time remained the government’s main priority, describing this issue as a matter of domestic economic stability.

“Our hands are tied regarding the revenue and how to maintain enough money to ensure that we can pay the salaries,” the official, who asked to remain anonymous because he was not authorised to speak publicly, said.

Economists have warned that while adjusting the exchange rate could ease some immediate fiscal pressures, it would not address the deeper weaknesses in Iraq’s economy.

“Nothing in economics is sacred, including the exchange rate,” said Nabil al-Marsoumi, professor of economics at Al Maaqal University in Basra. “It can be adjusted, but only after all other options have been exhausted.”

“In any case, the exchange rate shouldn’t be used as a cover-up for failures in the state’s economic and fiscal policies,” he added.

Hebron, occupied West Bank – Badr al-Tamimi, 60, lives in Hebron’s Old City, where Israeli checkpoints, iron gates and road closures turn the simplest tasks into a dispiriting daily ordeal for Palestinian residents.

The situation goes beyond mere restrictions on movement. Israel has created a ghost town in parts of Hebron, where residents feel they are being driven out. This is most pronounced in an area known as H2, where Israel has complete control and Palestinians are subject to the dictates of the military.

A few days ago, Israeli authorities installed three iron gates across a 200-metre (656-foot) stretch of Hebron’s Old City – amounting to just 0.2 dunams (200 square metres) – as part of Israel’s apparent attempts to restrict Palestinians’ freedom to move around the city.

Hebron Mayor Yousef al-Jabari told Al Jazeera that one gate was erected on al-Zahid Road, the only route accessible to vehicles reaching the Old City entrance. A second was placed at the start of al-Shalala Street, which leads to shops connecting to the Bab al-Zawiya area in the city centre. A third towers over another section of al-Shalala Street, a thoroughfare used by pedestrians to access the shopping area.

They are part of a wider web of travel restrictions across the occupied West Bank, but Hebron, which has a strong settler presence, has suffered more than most Palestinian cities.

Approximately 40 percent of the 89 checkpoints in the West Bank and 11 percent of all 925 movement obstacles are located in the H2 area of Hebron, which is under tight Israeli control, according to the United Nations Office for the Coordination of Humanitarian Affairs (OCHA).

About 7,000 Palestinians in an area of Hebron where hundreds of settlers live are affected by the latest travel restrictions. Since October 2023, when the genocidal war on Gaza began, only Palestinians with specific identification numbers could enter this area. Checkpoints at the entrance to this zone are generally only open from 7am to 8pm.

Al-Tamimi, who lives in the al-Sheikh neighbourhood adjacent to the city’s famed Ibrahimi Mosque, owns a shop in the Old City.

Palestinians can be kept waiting for hours at the checkpoints, and the mood of a soldier manning one can decide the commute time of a Palestinian. Worshippers attempting to enter the Ibrahimi Mosque can be held up for hours by soldiers.

“They might allow a limited number of people to enter while others are forced to wait, whereas resident movement comes to a halt during incursions, Jewish holidays, and the associated security measures,” he added.

Repeated closures have paralysed economic activity in Hebron, making it increasingly difficult for shops and companies to do business.

“Our presence in the Old City is a matter of steadfastness, not the availability of the elements needed for economic life,” al-Tamimi said.

Even after Israel’s occupation of the city in 1967, Hebron was once a bustling city with lively shops and markets. Residents could move more freely between neighbourhoods, which helped with economic life in the city.

Things changed in 1994, the year of the Ibrahimi Mosque massacre, when a US-born Israeli settler murdered 29 Palestinian worshippers.

From that point, the Old City’s geography changed, becoming isolated from its surroundings, al-Tamimi said.

He points to Shuhada Street, once a vital artery for transport and commerce in the city before road closures and restrictions transformed the area’s reality.

“They committed the crime, yet they continue to punish us for it,” he said.

In 1997, the Hebron Protocol was signed between the Palestine Liberation Organization (PLO) and Israel, dividing the city into two zones: H1, which was under relative Palestinian jurisdiction, and H2 – an area which includes the Old City, the Ibrahimi Mosque, and illegal settlements – remained under Israeli security control.

Issa Amro, coordinator of the Youth Against Settlements group, said Israeli prohibitions intensified with the outbreak of the second Intifada in 2000 when Hebron became a centre of the uprising.

During this period, vast areas of the city were sealed off, shops were forced to close, and residents often remained confined to their homes or neighbourhoods.

Since Israel’s genocidal war on Gaza began on October 7, 2023, the number of checkpoints has risen to 32, while other obstacles impeding Palestinian movement now exceed 130.

The “closed zones”, designated by Israeli authorities as areas of military activity with restricted access to Palestinians, have expanded around the Ibrahimi Mosque and the illegal settlements that lie in the heart of the city.

“The movement restrictions are effectively holding residents as hostages,” Amro said.

Mayor al-Jabari said approximately 10,000 Palestinians in the Old City and the surrounding closed zones are affected by these measures.

Some parts of Hebron are inaccessible to vehicles, and Palestinian residents are subject to curfews two or three days a week, usually over the weekend.

He believes these restrictions are aimed at hindering Palestinians’ ability to return home and stifle life in parts of Hebron.

Meanwhile, Israeli authorities have helped settlers expand in the area, imposing a new suffocating reality for Palestinians in the city.

Al-Jabari said Israel’s current government could be doing this to curry favour with settlers ahead of this month’s election.

Control of Hebron, its Old City, and the Ibrahimi Mosque is a key issue for settlers, and politicians in this group occupy key posts in the Israeli government.

This has coincided with a concerted effort by Israeli authorities to cement the settler presence in and around the city.

“The seizure of buildings and land, along with the installation of gates, is a continuation of Israeli policies that have been in place for decades,” al-Jabari said.

“These include the closure of Shuhada Street and the shutting down of over 500 shops, as well as the establishment of settlement outposts and military positions within the Old City.”

He has seen more restrictions on Palestinians’ freedom of movement over the past month, measures that will undoubtedly appease settlers.

Hebron municipality has responded to this by filing lawsuits in Israeli courts, despite its scepticism about the impartiality of the judiciary.

With these measures continuing, life for Palestinians is getting worse, making work, life and education a daily struggle.

Israel cites the security situation as a pretext for erecting more checkpoints and iron gates in Hebron, but there are no such restrictions on settlers.

Since 2015, Israel has limited the number of Palestinian residents of closed zones who can pass through these checkpoints. Students and teachers frequently have their bags searched by Israeli soldiers or are detained.

Ayat al-Jabari, a 40-year-old science teacher, worked for a year at Qurtuba School, located near the closed Shuhada Street, before transferring to her current position at Al-Fayha School, near the Ibrahimi Mosque.

Although reaching Qurtuba School from her home should have been a five-minute journey, it often took an hour.

On her unsettling morning route through a nearby cemetery, often in darkness during the winter months, settlers and soldiers often appear in the graveyard to block the path of Palestinians or abuse them.

“Every day, I was forced to take a long route and walk through a cemetery to avoid passing the checkpoint, as I don’t hold a [special identification card] number. Even those who do hold numbers are sometimes forced to take this path to escape the soldiers’ moods,” she said.

After moving to Al-Fayha School, al-Jabari hoped her commute would improve, but the situation is no better than before.

“Whenever Jewish holidays arrive, these schools are closed because all the students live in areas subjected to a total lockdown, to the point where residents are even forbidden from opening their front doors,” she said.