Ambiguity about devaluing the exchange rate... Parliamentary Finance warns against violating it

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[size=52]Ambiguity about devaluing the exchange rate... Parliamentary Finance warns against violating it[/size]

[size=45]Baghdad / Hussein Hatem[/size]
[size=45]Deputies in the Finance Committee rule out returning the exchange rate to what it was about two years ago, despite the financial surplus achieved from oil prices, while noting that changing it at the present time will generate compensatory claims by the owners of some investment projects contracted for the government.[/size]
[size=45]And the Central Bank of Iraq decided in December 2020, to amend the exchange rate of the US dollar to 145,000 dinars for every $100, according to the state’s general budget for 2021 approved by the House of Representatives.[/size]
[size=45]Committee member Jamal Cougar says, “Restoring the dollar exchange rate to its previous era is difficult at the present time, and this matter is not one of the tasks of the House of Representatives, and it is incorrect according to a number of reasons,” noting that changing the exchange rate is one of the exclusive powers of the Central Bank of Iraq. and to the Ministry of Finance.[/size]
[size=45]He added that "despite the financial surplus achieved by the rise in oil prices, there is a debt owed by Iraq in favor of external and internal banks of no less than 100 trillion dinars."[/size]
[size=45]Cougar pointed out that "the rise in oil prices is not stable, but rather came due to the crisis of the war between Russia and Ukraine, meaning when the war stops and things return to their normal state, oil prices will drop."[/size]
[size=45]And he indicated, "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." .[/size]
[size=45]Cougar ruled out, “Passing the 2022 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.”[/size]
[size=45]In turn, the financial advisor to the Prime Minister, Mazhar Muhammad Salih, says, “Changing the exchange rate is possible, but it requires patience and careful study,” adding, “We need to cook on a quiet fire and monitor prices until the end of 2022, oil prices and foreign reserves.”[/size]
[size=45]Saleh added, "The exchange rate of the dinar against the dollar follows stability, and it is not arbitrary, but rather a contract between the Central Bank of Iraq and the Ministry of Finance because the foreign currency offer comes from the Ministry of Finance, which is the only source for it in the country."[/size]
[size=45]He pointed out, "The Central Bank deals in dollars to maintain cash reserves and prevent inflation, and the modern Iraqi financial history is witnessing cooperation in determining the dollar exchange rate between the Central Bank and the Ministry of Finance."[/size]
[size=45]He continued, "Everything is possible, but we need patience in changing the dollar exchange rate in the event of an increase in prices and the fiscal policy is unable to cover the dinar," noting that "the Food Security Law, if it is not able to secure the requirements in the event of high prices, the Central Bank will intervene to preserve the strength of the dinar." against the dollar.”[/size]
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