[size=30]The Iraqi Finance announces the reasons and gains for the "necessary devaluation" of the dinar
[/size]After rumors spread widely and talked about the existence of efforts to reduce the price of the dollar [You must be registered and logged in to see this image.]Iraqi dinar
Erbil (Kurdistan 24) - The Iraqi Ministry of Finance announced today, Sunday, the reasons that prompted the state about a year ago to reduce the value of the dinar against the dollar.
This came after rumors spread widely, and talked about the existence of efforts to reduce the price of the dollar, which resulted in fluctuation in the exchange rate.
Earlier in the day, the central bank said that any ill-considered change in the dollar's exchange rate would lead to an economic recession and confuse local markets.
The Ministry of Finance said in a statement that it sought with all its institutions to correct the structural distortions in the Iraqi economy, which the public financial policy lacked, which led to restricting the ability of financial reform in the country.
Under the title "Why was the exchange rate depreciation in December 2020 necessary?", the ministry indicated in a statement that when oil revenues collapsed two years ago, the Iraqi government was facing enormous funding pressures while it was struggling with its basic internal and external obligations, as the cash reserves of the Central Bank were declining. fast.
In December 2020, the reserves were expected to run out within a year, and Iraq was on the brink of a comprehensive economic crisis that came as a result of the drop in oil prices, according to the statement.
He added that the decision to reduce the value of the dinar came within a package of fundamental reforms targeting the structure of the Iraqi economy, and this decision was taken as a result of a stifling economic crisis that befell the whole world represented by the Corona pandemic, as the price of a barrel of oil at the time reached $ 20, and this is what caused an economic crisis that led to The difficulty of meeting the government's financial obligations from previous external and internal debts, in addition to the salary bill for employees, retirees, and social protection.
The statement stated, "Whereas the Social Protection Authority was supported by increasing the allocations of the new targeted groups to compensate for the emergency change in the exchange rate and to subsidize the poor, but the House of Representatives reduced the amounts allocated to the new inclusion, which led to the non-inclusion of new families within social protection."
The Ministry of Finance said that "the change in the exchange rate of the dinar came in conjunction with the implementation of the economic reform project, which the Iraqi government called (the white paper) and it was a necessary option to reform the structural system of the Iraqi economy."
She explained that "the change in the exchange rate gave great strength in the economic joints of the country, and it is in line with the statements of the Central Bank, which confirmed that raising the exchange rate led to an increase in the possibility of competition for the local product, and to reduce the pressure of expenditures on the Ministry of Finance by 23%, which enabled the Ministry of Finance to overcome the crisis." Resulting from the drop in global oil prices during 2020 and the first months of 2021.”
She added that the decision to adjust the exchange rate "came after the state's foreign currency reserves were depleted and some private banks took control of the currency selling market by illegal means, and we worked to raise the foreign currency balance through a series of decisions in addition to the rise in oil prices. dollars from the reserves of the Central Bank of Iraq, and raise the international credit rating of Iraq internationally.
She said, "The statistics of the specialized international organizations indicate the gross domestic product at 9% for the first half of 2021, and the growth of the non-oil economy by more than 21% in the first half of 2021, and this is due to the strong performance in the service sectors after easing the measures to prevent corona virus." The novelty.
This recovery reduced the lag in the oil sector, by 10% in the first half of 2021, as Iraq adjusted its share in OPEC, and since then, OPEC gradually increased the production share of member states, which was reflected in an increase in GDP and the general inflation rate reached And the primary in Iraq for the period from January to July 2021, reaching 5.2% and 6.3%, respectively, due to the increase in domestic demand and the insufficient supply of commodities to meet the full increased demand, in addition to the positive impact of inflation due to the decline in import prices in some exporting countries facing deterioration in the value of their local currencies.
She said that she had worked "to attract companies to support investment in Iraq for the purpose of promoting the country's economy by maximizing non-oil revenues, emphasizing the need to adopt the budget of programs to achieve the best performance of the plans and timings set, and to put in place appropriate mechanisms within its strategy to finance and involve the private sector, and to approve the implementation of strategic projects with a multiplier effect and scaling back." Banks monopoly of foreign currency.
She stated that she had addressed, in light of the stifling financial crisis, "the suffering of a large segment of the contracts of the Ministry of Electricity and free lecturers, as they were converted into contracts based on Cabinet Resolution No. 315 of 2019 and all the problems that many ministries faced from having their contracts terminated, including the Ministry of Defense, Interior and the Popular Mobilization Authority." Solve all problems related to bonuses, promotions and other benefits for all employees and citizens.