Iraq monitary policy

[rockfl9]

The MOF does not want the IQD to become an openly traded currency.  IF it were allowed to trade on the international market as a currency they would loose the stability of the PEG or so called "program rate" and would have to compete with all the other currencies and more dollars would escape..  I know dinarians think that the real rate should be much higher like 1 too $1.  But really the MOF/CBI actions have been to artificially hold the rate steady using loans and financial mumbo-jumbo like not paying debts and salaries on time. Instead of 1190 the rate should really be in the area of 1500. But politically they cant change it that fast.

But that would cause rampant inflation and political turmoil.

Initially  they may have expected that the drop in oil was temporary , but it wasn't . They used reserves and borrowed to cover the budgets of 2015-18 and will borrow again 2019 IF they can.

The failure to get a new government going on time only puts stress on a new budget , if late they will resort to extending the old budget on a monthly basis which  makes the hole deeper.

WHY the push for financial inclusion, I think it is to get the people into the mood of borrowing against the future that way there is a way to smooth out the coming difficult times.