Imposition of tariffs without a change to a float will not work. It will cause inflation in the country and place a heavy burden on the citizens of Iraq due to the higher prices.
Unless they simultaneously allow the dinar to float (while reducing the money supply) then the Iraqi’s will see the value of their dinar fall precipitously due to the higher prices of imported goods.
The GOI tried this once already with trade into Kuwait and had to stop it immediately due to the disruption it caused. Now they are going to do it again over a larger territory.
We can only hope that they have figured this out and that they will somehow get the dinars out of the mattresses so they can be destroyed and the value of the dinar to rise to offset the higher prices.
I can’t believe that the GOI would be this short-sighted and must conclude that this is being done in conjunction with the MOU with the IMF/CBI.