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The government intensifies measures to control the exchange rate
Economical 2023/03/07
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Haider Fleeh Al-Rubaie
The government intensified its measures aimed at undermining the dollar and limiting its rises, which affected inflation levels, and caused the citizen's purchasing power to drain as a result of the high prices of all goods and materials whose import is linked to foreign currency. The Federation of Chambers of Commerce, on directing the Prime Minister to facilitate the entry of merchants to the electronic transfer platform for selling dollars at the Central Bank.
This trend represents, according to a number of specialists in economic affairs, a necessary step to eliminate the monopolies of the parallel market for foreign currency, in addition to being an important factor in limiting the rise in prices resulting from the necessity of "small merchants" to provide their needs in dollars by buying it from money exchanges, which sell it within limits. 157 thousand dinars for every 100 dollars,” until yesterday
Monday".
In addition to the importance of government directives to facilitate the involvement of merchants in the platform for selling the currency, the economist, Dr. Fares Karim Buraihi, believes during his interview with "Al-Sabah" that "the central bank's moves represent practical measures that could contribute to some extent to a decline in the dollar's exchange rate, but they are We need more follow-up,” calling for the involvement of “small merchants” who work on a daily basis in commercial exchange without allowing them to enter the dollar selling platform at the Central Bank, and to obtain foreign currency at its official rate, indicating that this matter has caused clear increases in prices. the prices.
Expert Brehi explained that the process of adapting to the platform and stabilizing exchange rates requires more time and continuous government follow-up, and to work diligently to prevent smuggling operations that the dollar was exposed to during the past periods, stressing that these follow-ups will lead to the restoration of the exchange rate and the stability of the parallel market, and thus Eliminating inflation and its negative repercussions on society, praising at the same time the government's efforts to control food prices in the local markets by entering as a competitor in selling some items at official prices, stressing the importance of the step that comes with the approach of the holy month.
Yesterday, Monday, the head of the Federation of Chambers of Commerce, Abd al-Razzaq al-Zuhairi, announced that "the prime minister directed that there should be meetings between businessmen, merchants, and relevant authorities, including the Central Bank, tax and customs, and facilitate the entry of merchants to the electronic transfer platform."
Contrary to the previous opinion, a member of the Iraqi Economists Association, economic researcher Muqdam Iyad al-Shaibani, believes during his interview with "Al-Sabah" that "the monetary policy in Iraq is still subordinate to the fiscal policy and is not independent of governmental and political decisions," describing the decision to raise the exchange rate that was taken. In the year 2020, from 118 dinars per dollar to 146 dinars, as "a shock method, and represents punishment for the people, in addition to being an unscientific and ill-considered measure that led to the decline of the Iraqi economy and caused a real crisis for the citizen."
Al-Shaibani explained that "the citizen suffers from accumulated crises as a result of previous economic and financial policies, and that changing the exchange rate within two years without a real study of the market situation, the banking system, and the situation of the private sector led to a gap between the official price and the parallel market price, especially after the Central Bank of Iraq did work." system of the electronic platform for financing foreign trade, without taking into account the weakness of the Iraqi banking system.
Al-Shaibani believes that "the failure of merchants, especially small traders, to deal with the banking system of the Central Bank led to the purchase of dollars from the parallel market to finance their foreign trade," noting that "most of the internal trade operations are still funded in dollars, and that Iraq depends entirely on imports from abroad because the industry And agriculture constitutes only 4% of the gross domestic product, which created a large gap between the official and the parallel price, which negatively affected the situation of the Iraqi economy and the citizen directly.
The researcher Al-Shaibani stressed the need for the Central Bank to reform the banking system and work to persuade all segments of the people, especially merchants, investors and other actors in the Iraqi economy, to enter the banking system and work to solve the problem of small traders and find realistic solutions to finance their trade, calling at the same time, to transfer all Domestic trade operations are in Iraqi dinars, and that the dollar be used to finance foreign trade.
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