Reducing the price of the dollar in Iraq.. an end to the crisis or its deepening?.. economists answe

POSTED ON[You must be registered and logged in to see this link.] BY [You must be registered and logged in to see this link.]

[size=52]Reducing the price of the dollar in Iraq.. an end to the crisis or its deepening?.. economists answer[/size]

[size=45][You must be registered and logged in to see this image.]
2023-02-08
Following the approval of the Iraqi Council of Ministers on the study presented by the Central Bank to reduce the prices of the US dollar against the dinar, the parallel market witnessed a significant decline in the exchange rate, reaching 145 thousand dinars compared to 100 dollars, after it reached more than 170 thousand dinars in earlier.[/size]
[size=45]The Central Bank set a price of 1,300 Iraqi dinars to buy the dollar from the Ministry of Finance, 1,310 dinars to sell it to banks through the “electronic platform,” and 1,320 dinars to sell it to the final beneficiary.[/size]
[size=45]Economic and financial experts differed among themselves in terms of the effectiveness of the recent government measures, which were represented in reducing the exchange rate of the dinar in the state’s general budget. Some considered it a step in the right path, while others considered this measure “dangerous and a confusion” in decisions.[/size]
[size=45]Inability to balance through a dangerous political decision to gain people's satisfaction[/size]
[size=45]And economist Nabil Al-Marsoumi says, “The recent measure taken by the government to improve the Iraqi dinar against the dollar is part of a strategy to confront inflation and then lower prices for imported goods, but it is considered a dangerous measure at the same time because there are direct costs that will be paid in return for improving the exchange rate of the national currency.” ".[/size]
[size=45]And he continued, "One of the factors that will be negatively reflected is the reduction of government revenues denominated in Iraqi dinars, which means direct costs, which will be around 15 trillion dinars annually, added to the deficit, which will be funded by external and borrowing, and the indebtedness will increase."[/size]
[size=45]He added, "The decision would also affect foreign trade and exports, create a problem in conflicting financial positions, and affect the investment nature, just as prices are difficult to fall when they rise."[/size]
[size=45]Al-Marsoumi also believes that "this measure was taken for reasons that are not economic but rather political, and it is consistent with the state's rentier method of gaining people's satisfaction."[/size]
[size=45]Electoral game.. Profits are in the pockets of the corrupt[/size]
[size=45]For his part, the economist Ahmed Al-Hathal considered in an interview that “the approval of the exchange rate 1300 by the Council of Ministers is the end of the electoral game at the expense of monetary policy and reserves.”[/size]
[size=45]He added that “the crisis of credits and remittances will remain until the completion of the platform and the organization of the exchange market, but the price will decrease from the citizen’s point of view only,” but from “an economic point of view, the difference between the two prices ranges by 10%, and may settle at 145-150, and it is still The difference goes to the pockets of the corrupt because of the bills.”[/size]
[size=45]Al-Hathlal asserts, “The government will not be able to solve the issue of bills, as they deluded the citizen at the expense of the budget deficit,” noting that “the financial illusion in monetary policy, we are waiting for the financial illusion in fiscal policy through the explosive deficit.”[/size]
[size=45]The decision is Iraqi.. and smuggling will stop[/size]
[size=45]For his part, economist Haider al-Moussawi emphasized in two conversations, “The decision to return the exchange rate and reduce it to 130,000 dinars against 100 dollars is the bank’s management decision after consulting financial and economic authorities concerned with the matter, and the Parliamentary Finance Committee is the one who laid the foundations for this issue, and therefore the decision will go ahead.” With the approval of all political forces.[/size]
[size=45]And he added, "Suspicion that the budget will face a deficit as a result of this is incorrect talk, because Iraq has a strong budget and has a good financial surplus, and these budgets can also establish investment projects and gradually abandon dependence on oil as the only revenue for the budget."[/size]
[size=45]He continued, "What was raised recently that the price of 130,000 dinars for 100 dollars will benefit smugglers in order to obtain dollars at cheaper prices is inaccurate talk because smuggling operations do not take place with bags as some imagine, but rather through invoices that are smuggled to several countries, and therefore the establishment of the electronic platform prevented smuggling." Absolutely out,” adding that “Iraq’s import needs do not, in any case, exceed $150 million per day.”[/size]
[size=45]Al-Moussawi confirms that "the decision was taken during the bank's meeting with the US Treasury in Turkey, and an Iraqi delegation headed by the Iraqi Foreign Minister left today for Washington to meet with the US Federal Bank to discuss the issue of the dollar."[/size]
[size=45]He pointed out that “what was determined from the price of 130 thousand dinars compared to 100 dollars is an acceptable price according to the economic vision, and what happened previously in terms of the rise in the parallel market belongs to the speculators who monopolized the market,” expecting that “it will rise slightly from the specified ceiling, and therefore it will not affect the market.” Normal prices.”[/size]
[size=45]A brief statement by the media office of the Council of Ministers said on Tuesday that the Council of Ministers 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, equivalent to 1,300 dinars per dollar.[/size]
[size=45]Last month, Prime Minister Muhammad Shia al-Sudani relieved Central Bank Governor Mustafa Ghaleb Makhaif of his post, at his request, and later decided to assign Ali Mohsen al-Alaq to carry out his duties.[/size]
[size=45]And the exchange rate of the dollar against the Iraqi dinar in the parallel market reached more than 170 thousand dinars compared to 100 dollars at a time when the government was unable to stop this deterioration in the value of the dinar, after large withdrawals of dollars from the market to smuggle them abroad.[/size]
[size=45][You must be registered and logged in to see this link.]