Parliamentary Finance denies the possibility of restoring the dollar exchange rate: it confuses the market and investment projects
Shafaq News/ On Sunday, the Parliamentary Finance Committee denied what was recently reported about Parliament's efforts to restore the exchange rate of the dollar to its previous level, 1200 Iraqi dinars for every US dollar.
Committee member Jamal Cougar told Shafaq News Agency, "It is very difficult to restore the dollar exchange rate to its previous state, and this matter is not one of the tasks of the House of Representatives, and it is not true according to a number of reasons, including that changing the exchange rate is one of the exclusive powers of the Central Bank of Iraq." and to the Ministry of Finance.
He added, "The economic situation is not as some are talking about, that is, despite the financial surplus achieved from the rise in oil prices, there is a debt owed by Iraq in favor of foreign and internal banks of no less than 100 trillion dinars, in addition to some hateful debts as a result of the Gulf War."
He pointed out that "the rise in oil prices is not stable, but rather came as a result of the war crisis between Russia and Ukraine, meaning when the war stops and things return to their normal state, oil prices will drop."
Cougar continued, "As a government and parliament, we failed to limit the excessive increase in reducing the operating budget, meaning that most of the state's resources go to the operational, and therefore no matter how much our financial resources increase, they are not enough to fill the operating budget and allocate a good part to the investment budget, and if we change the dollar exchange rate, this means Adding 23% to the state budget as a difference in the exchange rate, will also create an unnatural state of confusion in the market.
And he added, "Changing the exchange rate will generate compensatory claims by the owners of some investment projects contracted for the benefit of the state, meaning that the affected investor will demand compensation, and therefore what some are promoting about the possibility of the House of Representatives issuing decisions that restore the dollar exchange rate are nothing but auctions and titillation for the feelings of the Iraqi street."
Regarding the Emergency Support Law for Food Security and Development, Cougar explained, "The Food Security Law, in accordance with the article included in it, which requires the implementation of the law on the same day it is voted on, at a rate of 50% of the total amounts allocated to it, and therefore it has entered into force and according to the exchange sections that included it."
Cougar ruled out passing the country's general budget law without forming a government, and that the latter is still subject to the consensus of the political forces on its formation, because the withdrawal of the Sadrist bloc from the political process confused the matter and therefore it is difficult to predict how the mechanism of forming the next government will be.
Some members of the House of Representatives had promoted in statements about the possibility of returning the dollar exchange rate to what it was before.
It is noteworthy that the Central Bank of Iraq, on December 19, 2020, officially announced the amendment of the foreign exchange rate (the US dollar) to be 145,000 dinars for every $100, according to the state’s general budget for the year 2021 approved by the House of Representatives.
As a result, according to specialists, the annual inflation in Iraq has risen significantly, so that the prices of all materials and commodities in the Iraqi market have risen significantly, which has sparked a wave of strong resentment among the popular circles, as well as the objections of some interested in economic affairs.
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