Dollar conflicts confuse the markets and a parliamentary move to host the central bank governor

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[size=52]Dollar conflicts confuse the markets and a parliamentary move to host the central bank governor[/size]

[size=45]Baghdad / Hussein Hatem[/size]
[size=45]Conflicts in the dollar exchange rates still play a major role in Iraqi markets, despite the Council of Ministers’ approval of adjusting the dollar exchange rate to the equivalent of 1,300 dinars about 10 months ago.[/size]
[size=45]The restriction of cash transfers by the American side on the one hand, and the lack of control over the dollar prices in the parallel market on the other hand, led to an increase in exchange rates, as the dollar exchange rates exceeded the 160,000 barrier during the last week.[/size]
[size=45]While the House of Representatives intends to host the Governor of the Central Bank and the concerned authorities; To determine the causes of high exchange rates and develop a mechanism to control them.[/size]
[size=45]A member of the Parliamentary Finance Committee, Moin Al-Kadhimi, says, “The American side restricted cash transfers and the internal situation of the currency as a result of the sanctions.”[/size]
[size=45]He added, “Remittances are issued in the range of 70% to 80% of the Iraqi market’s needs, and are provided through the currency window.”[/size]
[size=45]Al-Kadhimi pointed out that “the merchant who needs to import is issued a transfer in dollars from the countries from which he imports, and an Iraqi dinar is delivered in exchange for it,” indicating that “the dinar is used by the Ministry of Finance to finance employee salaries and the needs of departments and ministries.”[/size]
[size=45]A member of the Finance Committee pointed out that, “There is 25% of the Iraqi market’s needs, which are provided through sources that have nothing to do with the currency window; Because of the restrictions issued by the US Federal Reserve and its prevention of Iraqi merchants from dealing with Syria, Iran and Lebanon.”[/size]
[size=45]Al-Kadhimi continued, “These reasons are what push merchants to obtain the dollar from the black market, and thus the exchange rate of the dollar against the dinar rises in the Iraqi local markets.”[/size]
[size=45]The fluctuation of the dollar exchange rates did not change the reality of the government’s procedures, which remained powerless in the face of it. Prime Minister Muhammad Shiaa Al-Sudani admitted during a previous television interview that millions of dollars are smuggled out of the country on a daily basis with forged invoices, indicating that the matter was discovered after everyone was obligated to make transfers via the platform. “SWIFT” electronic system that allows the US Central Bank to monitor and follow the path of remittances and imported goods.[/size]
[size=45]For his part, Member of the House of Representatives, Amir Al-Mamouri, says, “The measures of the Central Bank of Iraq regarding the rise in the exchange rates of the dollar against the Iraqi dinar were not at the required level.”[/size]
[size=45]Al-Mamouri added, “Speculation in dollar prices is still continuing despite setting an official price for the dollar in the 2023 budget, at a value of 1,300 dinars per dollar.”[/size]
[size=45]The member of the House of Representatives indicated, “There is a parliamentary move to host the Governor of the Central Bank and the concerned authorities to find out the reasons for the rise in the dollar exchange rates and to develop a mechanism to stop the rise.”[/size]
[size=45]In turn, economic affairs researcher Diaa Al-Mohsen says, “Sales from the currency sale window since the beginning of this year are no less than $200 million per day.”[/size]
[size=45]Al-Mohsen added, “The dollar allocated for travelers goes to the black market through banking companies,” noting that “250 thousand dollars a month are the profits of banking companies through exploiting the money allocated for travel.”[/size]
[size=45]The economic affairs researcher pointed out that “most of the central bank’s departments have nothing to do with the economy and financial management,” stressing that “most foreign currency smuggling operations take place through the currency selling window.” Last June, the House of Representatives approved the 2023 budget, amounting to 198.9 trillion dinars, as it includes record spending on an increasing government wage bill and development projects aimed at improving services and rebuilding infrastructure destroyed by neglect and war, according to Reuters.[/size]
[size=45]The budget is based on an oil price of $70 per barrel and expectations of exporting 3.5 million barrels of oil per day, including 400,000 barrels per day from the Kurdistan region, while the exchange rate for oil revenues in US dollars is set at 1,300 dinars to the dollar. This will remain in effect until 2025, but it will be subject to adjustment. It includes the price of oil used by Iraq in light of its almost complete dependence on oil revenues.[/size]
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