The dollar exchange rate confuses the Iraqi economy
The Central Bank rejects and claims rise to limit change to food and medicine to curb inflation
[size][You must be registered and logged in to see this link.] Sunday August 14 2022 2:09[You must be registered and logged in to see this image.]The exchange rate of the dollar against the dinar raises the prices of food and consumer goods in Iraq (AFP)
The news and statements circulated regarding changing the exchange rate of the dollar against [You must be registered and logged in to see this link.] confused the economic scene in the country, and despite popular and governmental demands to change it by the new government, whose formation was delayed for more than 10 months, the change in the [You must be registered and logged in to see this link.] exchange rate and the rise in oil prices contributed to raising the reserve Iraq's hard currency amounted to 82 billion dollars from the reserves of the Central Bank of Iraq.
Economic circumstance controls
The Central Bank [You must be registered and logged in to see this link.] confirms that there is no justification for changing the exchange rate of the dollar against the Iraqi dinar, while making it clear that the economic circumstance is the main criterion for changing the exchange rate.
The Deputy Governor of the Central Bank, Ammar Khalaf, said, in press statements, against the background of returning the news indicating the possibility of changing the exchange rate of the dollar after the formation of the new government, that “the exchange rate at the present time, in our belief as a monetary authority, there is no justification for changing it,” explaining, “This is The matter remains within the monetary authority’s policy and according to the circumstances.” He added, "During the years from 2004 until now, the exchange rate changed more than once, either upward or downward, and there is no future plan to change it, whether after 3 or 5 years, and the economic conditions determine what is the appropriate decision that fits the time period at the time."
$15 billion loss for Iraq
And economic expert Duraid Al-Anzi revealed that "Iraq's loss from changing the exchange rate and storing hard currency amounted to 15 billion dollars." And he said, in a press statement, that “the savings of the central bank any currency or metal leads to loss, because the dollar and the euro are exposed to material losses, while gold prices are witnessing fluctuations, as well as fluctuations in oil prices, so this is the best solution to maintain the current cash surplus from oil revenues. Put it in investment projects, because savings in all cases are subject to a rise and fall.”[rtl]read more
It is noteworthy that the Central Bank of Iraq, decided earlier, a major change in the exchange rate of the dollar, where 1450 dinars per dollar the purchase price of foreign currency from the Ministry of Finance, 1460 dinars per dollar the selling price to banks, while 1470 dinars per dollar the price of selling foreign currency to the public. The decision contributed to an increase in the prices of foodstuffs, consumer goods and commodities, which negatively affected the citizens.
Adviser to the Prime Minister for Financial Affairs, Mazhar Muhammad Salih, said in a previous statement, "Everything is possible, but we need patience in changing the dollar exchange rate in the event of high prices and the financial policy is unable and monetary policy is able to cover the Iraqi dinar."
On the other hand, Representative of State of Law Jassem Al-Moussawi confirmed, "The chances of the coordination framework within the parliament have become strong, and this is what qualifies him to change the exchange rate of the Iraqi dinar against the US dollar, while stressing that the improvement in the economic situation will prompt the return of the dollar to its old price."
He added that "one of the main demands adopted by the State of Law coalition is to restore the exchange rate of the dollar, especially after the improvement of the economic situation," noting that "the Iraqi government's interaction with the development of investment, the development of agriculture and the opening of wide economic outlets all require a change in the exchange rate." He pointed out that "the cash reserve of the currency rose to more than 70 billion dollars and may rise to 90 or more, and this could change the exchange rate of the dinar against the dollar with the existing economic improvement."
For his part, MP Mudar Al-Karawi revealed parliamentary proposals to reconsider the exchange rate of the dollar against the dinar. He said in a previous statement, "Raising the dollar exchange rate and reducing the value of the Iraqi dinar were taken at a critical time that Iraq went through in the economic file, but the situation has changed for the better." He added that "the repercussions still hit more than 13 million citizens and put them below the poverty line after prices rose by between 20 and 35 percent for foodstuffs and medicines, and there are items that rose by more than 50 percent." He pointed out that “the change in the exchange rate of the dollar is a decision in the hands of the Central Bank as an independent body and not in the hands of the House of Representatives, but there is another alternative in order to alleviate the impact of raising the exchange rate through the principle of the food or medicine dollar, that is, granting the dollar at reduced exchange rates in order to finance food purchase deals. medicine in order to lower their prices.
He added, "The next stage should reduce the prices of medicines and food at the very least, because we are facing a poverty rate that exceeded 30 percent in Iraq. It must be contained, medicine and food should be provided at appropriate prices, and there should be a vision to reduce the repercussions of raising the exchange rate on millions of Iraqis who suffer severely."