"Changing the value of the dinar" .. the Iraqi Central issued a decisive statement

by **Rocky** Sun Feb 20, 2022 3:37 pm

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"Changing the value of the dinar" .. the Iraqi Central issued a decisive statement

by Rocky Sun Feb 20, 2022 3:37 pm

[size=39]"Changing the value of the dinar" .. the Iraqi Central issued a decisive statement

Al Hurra - Washington
February 20 2022
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On Sunday, the Central Bank of Iraq resolved the controversy surrounding an amendment to the current exchange rate of the dinar against the US dollar, denying the matter.
This came after calls to reconsider the decision to reduce the price, which was taken more than a year ago, with the country achieving significant gains due to the rise in oil prices.
A statement published by the Central Bank on its official Facebook page stated, "There are no intentions to change the current exchange rate, especially after the positive results that it achieved during the past period."
The statement comes, a day after discussions that took place in Parliament with Finance Minister Ali Allawi and Central Bank Governor Mustafa Ghaleb Mokhiv to discuss the exchange rate.
The statement stated that "the discussions that took place while hosting the Governor of the Central Bank of Iraq in the House of Representatives last Saturday emphasized the need for concerted efforts by all government institutions to improve the economic and living standards of the poor classes that were affected by the high rate of inflation."
The statement called on citizens not to deal with news that indicates the possibility of a price change. Noting that the bank possesses sufficient foreign reserves to stabilize the current exchange rate.
The leader of the Sadrist movement, Muqtada al-Sadr, presented, on Thursday, six proposals regarding the dollar exchange rate, including summoning the Minister of Finance and the Governor of the Central Bank under the dome of Parliament, organizing the Iraqi currency market centrally and enacting "some laws that increase the value of the Iraqi dinar exchange rate." .
As soon as the recall decision was announced, the selling prices of the dollar in the local market recorded a slight decrease, as the price of the 100-dollar banknote reached 147.5 thousand dinars, compared to 148 thousand dinars the previous day.
The Central Bank of Iraq had devalued the official currency against the US dollar in December 2020, in the first such measure in half a decade, and coincided with a stifling financial crisis afflicting the country as a result of the collapse of oil prices at the time.
The exchange rate set by the Central Bank amounted to 1450 dinars to the dollar, instead of the previous rate of 1190 dinars, which sparked a series of criticisms from politicians, economists and citizens alike.
The Iraqi government attributed the decision to cut at the time to the stifling economic crisis that the country, the second largest oil producer in OPEC, is going through, as a result of the drop in crude prices.
But the recent rise in the price of oil in global markets to record levels not seen in seven years, has sparked controversy recently regarding the decision to devalue the Iraqi dinar and the possibility of reconsidering it.
It is noteworthy that the decision to reduce the value of the Iraqi dinar was taken when the price of a barrel of oil in international markets ranged between 40 and 50 dollars, compared to its price today, which reached more than 90 dollars.
However, the Central Bank issued a statement, Saturday, in which it said, "The current exchange rate has achieved many positive results, the most prominent of which was reducing the state's general budget deficit to achieving a surplus at the end of 2021, and giving local producers and investors an important competitive advantage with imported goods."
The Central Bank stated that "the repetition of changing the exchange rate within short times without studying by the concerned authorities, leads to an economic recession, confuses the work of local markets, increases speculation on foreign currency, and squanders the gains made by the current exchange rate."
He pointed out that "despite the rise in global oil prices of an unstable nature, there is no connection between this rise and the objectives and results of changing the exchange rate," adding that the current rise in oil prices will enable the Iraqi government to rebuild the Iraqi economy properly, and build adequate financial buffers. To counter any future fluctuations in international oil prices.
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