Al-Watania: The Rise In The Price Of The Dollar Came In Agreement With The Political Leaders
In a meeting with the three presidencies On February 21, 2022 The meeting of the three presidencies and heads of political blocs (archive) The Independent/ – The National Coalition confirmed that the exchange rate change was taken during the meeting of the three presidencies with the political leaders in the country, more than a year and three months ago. The coalition said in a statement, that (The Independent) received a copy of it.
We followed with great surprise the media debate between the House of Representatives and the Ministry of Finance regarding the dollar exchange rate, and at a time when the goal of the two sides was the public interest, we hoped that these communications would be away from the media and not plunge the country into a crisis. New is indispensable.
He pointed out that the decision to change the exchange rate came “when the government was unable at that time to secure the salaries of employees and retirees except by following real procedures and reforms, including changing the exchange rate.”
He stressed that “it is not fair to hold a person or entity responsible for this decision.”
The National Coalition stressed the need to follow the legal and constitutional contexts in the relationship between the executive and legislative authorities, away from any narrow political gains here or there.
The “Dollar Crisis” Is Escalating.. Economists Warn Against Depreciating The Exchange Rate: It Will Create Turmoil In The Markets
Political 422 02/21/2022 12:11:28 AM Special/ Range Specialists in economic affairs rule out the return of the exchange rate of the dollar against the dinar to what it was before December 2020, while they saw that returning the exchange rates to what they were, would create a kind of turmoil in the Iraqi markets and lead us to building a new budget in addition to storming the money market and undermining stability
On Thursday, the leader of the Sadrist movement, Muqtada al-Sadr, presented six proposals regarding the dollar exchange rate, including summoning the Minister of Finance and the Governor of the Central Bank under the dome of Parliament, organizing the Iraqi currency market centrally and enacting “some laws that increase the value of the Iraqi dinar exchange rate.”
As soon as the recall decision was announced, the selling prices of the dollar in the local market decreased slightly, as the price of the $100 bill reached 144,500 thousand dinars.
The exchange rate set by the Central Bank amounted to 1450 dinars to the dollar, instead of the previous rate of 1190 dinars, which sparked a series of criticisms from politicians, economists and citizens alike.
The government attributed the decision to cut at the time to the stifling economic crisis that the country, the second largest oil producer in OPEC, is going through, as a result of the drop in crude prices.
However, the recent rise in oil prices in global markets to record levels not seen in seven years has sparked controversy recently regarding the decision to devalue the Iraqi dinar and the possibility of reconsidering it.
The specialist in economic affairs, Nabil Al-Marsoumi, said in an interview with (Al-Mada), that “Iraq is a rentier state that relies on the principle of stabilizing the exchange rate,” noting that “the rise in the price of the dollar against the dinar has negatively affected the poor segments through the rise in local and imported prices.”
Al-Marsoumi added, “The negative aspects of the exchange rate have been exacerbated for more than a year by the failure to take measures that contribute to reducing the crisis, such as building social sources of income, supporting the poor classes, and tax exemptions for basic commodities.”
The specialist in economic affairs pointed out that “tying the exchange rate to a short-term, fast-volatile variable (oil) is an economic absurdity,” noting that “it is not possible to link the price of the dinar with the price of oil, since the latter has sudden fluctuations.”
Al-Marsoumi called for «regulating the exchange market by addressing the rampant corruption in the sales of the Central Bank of Iraq and the domination of the market by the owners of private banks».
Repercussions Of The Dollar Devaluation
And the professor of economics at the University of Basra said, “Restoring the dollar exchange rate to what it was before will create a kind of turmoil in the Iraqi markets and lead us to building a new budget, in addition to storming the money market and undermining financial stability.”
For his part, the economist, Ahmed Hathal, told Al-Mada that “oil prices have short-term effects, and if oil price changes were calculated annually in the year (2021), the average would be ($68.63) annually, with a daily export rate of 2.7 million barrels.
It is equivalent to the equilibrium price of the hypothetical public budget at least, and the daily fluctuations of oil prices do not depend on its early economic results.
Hathal added, “The exchange rate has short, long or medium-term effects, whether negative or positive.
The call to return the exchange rate will cause more social problems than the problems it created when (the mistake of changing it previously), and if it will contribute to reducing prices, it will not decrease at the previous level.
Because there is no complete control over it first, and because it is linked to international markets and their fluctuations, secondly, given that most commodities are imported, in addition to the viscosity of prices declining and their flexibility to rise.”
Short Term Solutions
The economic affairs specialist presented some short-term solutions for the affected groups, including:
1 – Supporting basic commodities for the citizen, ensuring the arrival of all necessary commodities to the citizen, fighting the corruption of the Ministry of Trade and its suspicious contracts, or giving cash alternatives to the targeted citizen equivalent to the value of the budget allocated to support the ration card.
2 – Supporting the health sector, fighting the scourge of corruption in the Ministry of Health, medicine stores, hospitals and health centers, providing all treatments for the category of chronic diseases, and providing equipment for critical operations and incurable diseases.
3 – Supporting the educational process, combating school dropouts, eradicating illiteracy, increasing enrollment rates, and giving cash subsidies to those who enroll in school after primary school to ensure an educated generation with the minimum costs of study and living.
Hathal concluded, by saying that “these are three basic points that any government must start according to a budget based on programs and performance in order to diagnose failure and corruption in every sector and department of the state,” adding,
“It is not reasonable to falter with new decisions or approve a complete budget.” Without a real vision and programs that work to achieve the efficiency of spending the general budget allocations.”
For his part, the other expert in economic affairs, Faleh al-Zaidi, said that “the exchange rate process was not an economic decision, and that all the political blocs participated and agreed to that process of change, and the possibility of returning it to what it was is currently out of the question.”
And Al-Zaidi told Al-Mada that “Iraq suffers from structural imbalances in its economy by relying on only one export commodity, which is oil, which is volatile, according to supply and demand, according to global market conditions.”
He noted that “the decision to reduce the price of the dollar must be made through economic reforms first, that is, diversifying exports by establishing an industrial base by operating all government and private stalled and lagging factories, and transferring oil revenues to real non-consumer investment projects.”
Al-Zaidi continued, “The confusion in economic decisions and neglect of the rights of citizens who are creditors to the state from the farmers who marketed wheat and barley to the state and from contractors and from the owners of government bonds and banks that loaned the state,
all of this has made debts accumulate and citizens demand their rights, so the devaluation of the dinar was in favor of The state will reduce the value of the debt, but at the same time it is causing great harm to the creditors because they will receive dinars at a lower value than before.”
In turn, economic expert Salam Sumaisem said in an interview with Al-Mada that “restoring the price of the dollar to what it was before December 2020, will not necessarily lead to a return to inflation levels to what they were in the past.”
She added that “the devaluation of the dinar came within an agreement with international bodies, and it lasted for 5 years, and it cannot easily be reversed.”
And Sumaisem continued, “Unfortunately, the government did not implement the rest of its commitments that it set in the white paper, including diversification of revenues and governance in taxes, fees and border crossings, and it was satisfied only with devaluing the currency.”
She pointed out, “The Central Bank is the only party capable of taking a decision to change the value of the currency.”
The economic expert pointed out, “The central bank must abide by monetary policy, and its first objective is to achieve economic stability that is achieved through the exchange rate.”
In addition, Abu Muhammad, the owner of a shop in the Dora area, south of the capital, Baghdad, told Al-Mada that “the decision to raise the value of the dollar compared to the Iraqi dinar harmed the poor class in Iraq,” noting that
“the devaluation of the dinar caused a major economic crisis, because all Food commodities witnessed a significant increase in prices.”
Abu Muhammad added, “The government was unable to follow up on food prices and punish price-manipulators who took advantage of the dollar’s rise to raise prices even for locally made goods.”
On the other hand, Ahlam Saeed, a teacher from the New Baghdad district, said in an interview with Al-Mada that “the salary of the month is no longer sufficient to meet the family’s special needs, because all commodities have increased significantly.”
She explained that “the central bank’s decision affected the poor and middle class, as they are the ones who are affected by the slightest rise in the value of goods in the markets.”
Saeed called on the government and the concerned authorities to “work to restore the exchange rate to its previous state, especially since oil prices have witnessed a significant improvement, and therefore there is no excuse for the government to take this measure.” https://almadapaper.net/view.php?cat=258891
During A Meeting With The Blocs, The Governor Of The Central Bank Refuses To Reduce The Exchange Rate Of The Dinar
Last update February 21, 2022 The Independent/- According to the meeting, which lasted for five hours with the Governor of the Central Bank, Mustafa Ghaleb Mokhiv, in the presence of all the blocs, the most prominent topics discussed were currency smuggling, the exchange rate and the currency auction.
Mokhif was quoted as saying: “The dollar exchange rate is not in the hands of the Central Bank or the House of Representatives. It is a matter related to all parties, especially the central bank’s dealings with the International Monetary Fund.”
And the head of the Kurdistan Justice Bloc, Representative Soran Omar, quoted in an interview with “Al-Sabah” newspaper, which was followed by the independent, that the governor indicated that “the bank raised the reserve from 48 billion to 64 billion dollars,” noting that “raising the dollar exchange rate or reducing the value of the Iraqi dinar two years ago.
It was at the request of the current Minister of Finance and the approval of all parties, because the government was unable to pay the salaries of employees in light of the drop in the oil price at that time to $30 per barrel,” stressing that “it is impossible to reduce the price of the dollar and go back, and that the rise in oil prices is not It is stable, and we will face many big problems if the exchange rate is returned to what it was before.”
Regarding the rise in the prices of goods and materials in the markets, the head of the Kurdistan Justice Bloc quoted the governor as saying that “the rise in local market prices is caused by the lack of government oversight,” and that he “personally is against raising the exchange rate and devaluing the Iraqi dinar, but it is an imperative matter that cannot be reversed.”
And the meeting came out The aforementioned formed a temporary fact-finding committee regarding the Central Bank and the Ministry of Finance and Markets, and to prepare a report to be delivered to the House of Representatives.
In turn, the economic expert Maytham Laibi told Al-Sabah: “The decision to change the exchange rate of the Iraqi dinar against the dollar falls within a common formula, in which the priority comes to the Central Bank of Iraq in accordance with Law 56 of 2004 and its amendments, which guarantees its independence completely, and the Central Bank participates from On the other hand, with the International Monetary Fund in obtaining advice and expertise in the field of monetary policy, while the government comes in third place in the list of parties that can influence the decision to determine the exchange rate of the dinar against the dollar.
The expert explained that “the role of Parliament, according to the constitution, is related to the accountability of the Central Bank and its people to the deputies in order to justify and defend its policies, not to interfere in its decisions and policies,” stressing “the negative impact on the exchange rate and the economy in general due to the interventions of some members of Parliament in the work of the Central Bank through Their non-specialized statements. https://mustaqila.com/خلال-اجتماعة-مع-الكتل-محافظ-البنك-المر/
Planning: Inflation In Iraq Within The Logical Rates
Economie| 08:51 – 20/02/2022 Baghdad – Mawazine News The Ministry of Planning announced, on Sunday, that Iraq has not witnessed a wild rise in inflation rates, while revealing measures to ensure that it does not rise in the coming years.
Ministry spokesman Abdul-Zahra Al-Hindawi said that “many internal and external factors affect the annual inflation,” noting that inflation indicators during the current year witnessed an increase in their rates compared to what they were in 2021.”
He explained, “Inflation indicators witnessed an increase of about 6 percent compared to what they were in the past year,” noting that “the factors of rising and declining inflation depend on the size of the currency in circulation, as well as the volume of investments and imports.”
He added, “Inflation in Iraq is rising at reasonable rates according to the economic reality, in addition to the size of the monetary mass in circulation and the percentage of investment,” stressing that
“Iraq has not witnessed a wild rise in inflation rates, and it is not expected to witness this in the coming years, especially since the monetary mass Trading is witnessing stability in the markets, in addition to the investment movement throughout the country witnessing a remarkable improvement, especially in the housing sector and the implementation of government projects.
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