The dollar against 1,300 dinars, starting today.. Will prices stabilize in the markets?

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[size=52]The dollar against 1,300 dinars, starting today.. Will prices stabilize in the markets?[/size]

[size=45]The Central Bank announced the sale of the dollar at the new official rate, starting today, Wednesday.[/size]
[size=45]The bank confirmed in a statement that it “will continue its procedures and steps until the dollar exchange rate stabilizes according to the official exchange rate,” according to an official statement. And the Iraqi Council of Ministers had approved “the decision of the Board of Directors of the Central Bank of Iraq to amend the exchange rate of the dollar against the dinar, at the equivalent of 1,300 dinars to one dollar,” according to a statement by the media office of the Prime Minister.[/size]
[size=45]The Central Bank of Iraq affirmed its readiness to “meet all legitimate requests of individuals, companies, projects and offices to achieve the bank’s goal of stabilizing the general level of prices to protect the purchasing power of citizens, especially since the new exchange rate granted to merchants and others provides lower prices for citizens.”[/size]
[size=45]The exchange rates will be as follows:[/size]
[size=45]1300 dinars per dollar is the price of buying dollars from the Ministry of Finance, 1310 dinars per dollar is the price of selling dollars to banks through the electronic platform, and 1320 dinars per dollar is the price of selling dollars from banks and non-bank financial institutions to the final beneficiary.[/size]
[size=45]The exchange rate of the Iraqi dinar against the US dollar has fluctuated for more than two months, and this led, on the second of February, to a decline in the exchange rate of the dinar to 1,750 dinars against one dollar.[/size]
[size=45]The exchange rate of the dollar declined after the US Treasury Department, during its meeting with the Governor of the Central Bank of Iraq, Ali Mohsen Ismail, and his accompanying delegation on (February 3, 2023) in Istanbul, expressed its readiness to achieve economic stability in Iraq in a way that contributes to achieving stability in the exchange rate in Iraq and the mechanisms related to that.[/size]
[size=45]For his part, the financial advisor to the Prime Minister, Mazhar Muhammad Salih, confirmed, yesterday, Tuesday, that the 2023 budget will adopt the exchange rate approved by the Council of Ministers, stressing that the decision is commensurate with the increase in the current account of the balance of payments, as well as supports the increase in foreign reserves, which touched 115 billion dollars.[/size]
[size=45]Saleh said in a press statement: “The decision to adjust the exchange rate of the Iraqi dinar against the dollar today is commensurate with the current rise in the current account of the Iraqi balance of payments to the gross domestic product of Iraq, which currently amounts to about (positive 15%), which prompted monetary policy to the need to amend The exchange rate and raising the external value of the Iraqi dinar.[/size]
[size=45]He added, "The decision supports the availability of official foreign reserves supporting Iraq that have touched 115 billion dollars, and it provides standard coverage for Iraq's total foreign trade for about 20 import months, while the global average is three months."[/size]
[size=45]He continued, “The decision to raise the value of the Iraqi dinar will also lead to combating inflationary activities and expectations that have exacerbated in the last three months, as the Central Bank of Iraq followed this time a strict monetary policy pattern that combats inflation by maximizing the external value of Iraqi cash, in order to impose stability in the level.” General prices and its importance in the stability of the monetary income of the public and the maintenance of living standards.[/size]
[size=45]He pointed out, "With the offer, the federal general budget for the year 2023 will adopt the new exchange rate of 1,300 dinars against one dollar for the purposes of evaluating its revenues and expenditures in foreign currency." And the Central Bank was forced in 2020, following a stifling financial crisis in the wake of the spread of the Corona virus, to raise the dollar from 1,200 to 1,450 dinars.[/size]
[size=45]Nuri al-Maliki, the leader of the state of law, proposed two months ago to change the exchange rate to 1375 dinars instead of 1450. He said at the time, defending his proposal, "so that we pay the damage to the citizen and the national economy."[/size]
[size=45]On the other hand, Rahim al-Darraji, a former deputy and a follower of financial affairs, warned in an interview with (Al-Mada) of confusion in the payment of salaries and the stability of the market.[/size]
[size=45]Darraji said, "There is a deficit in expenditures, and the devaluation of the dollar will double the problem, and the government may be unable to pay salaries."[/size]
[size=45]The government, according to sources, had printed 5 trillion dinars in the past three months to meet the scarcity of the dollar.[/size]
[size=45]In the past two months, the Central Bank's sales have declined following the American restrictions, from 250 and 300 million dollars a day to 50 and 60 million dollars.[/size]
[size=45]And raising the price of the dollar 3 years ago had provided the government with 22 trillion dinars, and it was required at that time to achieve half of it to bridge the salary deficit. According to previous statements of the Finance Committee.[/size]
[size=45]Al-Darraji, a former member of the Parliamentary Integrity Committee, confirmed that "the reduction of the dollar will lead to an increase in smuggling, because there is a price difference between what is in Iraq and its price in neighboring countries."[/size]
[size=45]The former deputy also stressed that "the decision may lead to great losses for merchants, as they are supposed to be given at least between 3 and 4 months until the disposal of their goods."[/size]
[size=45]Al-Darraji underestimated the impact of the devaluation of the exchange rate on the price of the dollar in the parallel market, saying that "its impact will not exceed 10 percent."[/size]
[size=45]In turn, Professor of Economics at the University of Basra, Nabil Al-Marsoumi, described the proposal to adjust the exchange rate as a “political reduction,” warning of the widening fiscal deficit.[/size]
[size=45]Al-Marsoumi said on his Facebook page, “The expected political reduction of the official exchange rate of the dollar against the dinar, to 1,350 dinars per dollar, will complicate approving the budget, confuse its vocabulary, and deepen the budget deficit. It will also keep the dollar’s ​​exchange rate in the parallel market close to its current price.” Because it is a matter of supply and demand, and as we progress, the gap increases and the demand increases.”[/size]
[size=45]He added, "Therefore, the reduction will be useless to the market and the citizen, and exchange companies, brokers and speculators will benefit, and even if the dinar exchange rate rose temporarily, it will decline again."[/size]
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