Raising the price of the dollar against the dinar increases the suffering of Iraqis

[yota691]

Raising the price of the dollar against the dinar increases the suffering of Iraqis
Decreased purchasing power amid difficult living conditions

Jabbar Zeidan is an Iraqi journalist @jabarzed  Thursday August 26 2021 3:06
 

Low-income people and the poor classes are most affected by the rise in the price of the dollar against the Iraqi dinar (The Independent Arabia)

 

 

The rise in the price of the US dollar against the Iraqi dinar exacerbated the suffering of the people of Mesopotamia, which prompted citizens to austerity to manage their affairs, amid difficult living conditions.

Increasing the selling price of the dollar

And the Central Bank of Iraq decided last December to raise the price of selling the dollar to banks and exchange companies to 1460 dinars, from 1182 dinars to the dollar, with the aim of compensating for the decline in oil revenues caused by the deterioration in oil prices, and the Central Bank attributed the main reason behind the devaluation of the dinar to bridge a gap Inflation in the 2021 budget after the collapse of global oil prices, which is a major source of Iraqi financial resources, and he stated that “the financial crisis that Iraq was exposed to due to the Corona pandemic led to a large deficit in the general budget,” and he pointed out in his statement that the purchase price of one dollar from the Ministry of Finance. Finance will be 1450 dinars, while the price of selling the dollar to banks through the foreign currency sale window is 1460 dinars.

And the Parliamentary Finance Committee revealed earlier, that the exchange rate will remain at its current position during the next five years.

Low purchasing power

The rise in the price of the dollar and the devaluation of the Iraqi dinar caused a decrease in the purchasing power of citizens.

Ali Ahmed, the owner of a store, said that "the prices of food commodities began to rise gradually since last October, and in the past two months they witnessed a significant increase," and stressed that "the citizen started screaming about the general situation in which he is living due to the large increase in prices."

Muhammad Mohsen, a seller of fruits and vegetables in one of Baghdad's central markets, considers that the purchasing power of Iraqi families has decreased due to the dollar's rise against the Iraqi dinar, and also because of the repercussions of Corona, and adds, "Most of the professions were affected, and some of them closed their stores."

The Iraqi authorities had taken a series of measures to reduce the high prices in the local markets, but the prices continued to rise.

Government goals

Economist Evan Shaker said, "More than nine months have passed since the decision to reduce the value of the Iraqi dinar against the dollar, by approximately 23 to 25 percent, and the government's main goals behind reducing the value of the Iraqi dinar against the dollar were to support the local industry and stop dollar smuggling. outside the country by selling the currency auction, as well as covering the expenses of employees’ salaries.” Shaker believed that “the majority of the goals set by the government by devaluing the Iraqi dinar during this period could not be achieved, and failed to support and develop the local industry, and also during this period, Inflation rates jumped in record numbers, which negatively affected the citizens,” and stressed that “the government failed to stop the smuggling of hard currency (the dollar), and that its decision to reduce the value of the dinar was in a random manner without taking into account the purchasing power of citizens, and even without taking into account the overall Iraqi economy. A decision that is far from modern economic thought.

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Shaker stressed that "the government was supposed to reduce the value of the Iraqi dinar against the dollar gradually, and in a smooth manner, but the decision was implemented in a sudden manner without any prior injunction, and it did not happen gradually, which caused a great shock to the Iraqi economy, and also caused an unexplained recession. unprecedented in the Iraqi markets, and heavy losses affected most sectors."

He pointed out that "the government was supposed to reduce the value of the Iraqi dinar gradually between five to seven percent, and with the implementation of the reduction, the central bank was supposed to inject large liquidity by giving loans to small and medium enterprises, and after a certain period, and in the event Achieving the desired goal of the targeted growth rate, the second step begins by reducing the value of the dinar in the same proportion as the previous one, while pumping liquidity again in the same proportion. If the desired goal of growth was not achieved, the reduction could have stopped at a certain number, because the economy is flexible and on The decision-maker has to be flexible in managing the economic file.” Shaker regretted the “random method of devaluing the Iraqi dinar against the dollar, which harmed both the public and private sectors.”

One of the solutions

But the expert in international economics, Nawar Al-Saadi, saw devaluing the local currency against the dollar as one of the solutions that some countries resort to, the aim of which is to support the local product, to reduce the phenomenon of wasting currency in imports, or in some cases, in exporting countries that reduce its local currency, to benefit from the currency difference for importers from other countries, as is happening now in China.

Providing the right ground

Al-Saadi added, "What happened in Iraq, the exact opposite of this concept, as the government, in the beginning, when it announced the reduction of the dinar, the goal was to bridge the financial deficit in the budget, support the local product, and reduce the phenomenon of import from abroad, but in fact, the value of salaries decreased indirectly and announced, on the For example, an employee who was receiving a salary of 600,000 Iraqi dinars, the value of this salary at that time was equal to 500 US dollars, but now, the value of the same salary is equal to 400 dollars, and with the increase in prices on goods and services in general, this led to a sharp contraction In the Iraqi market, economic activity has been paralyzed in general, and inflation rates have increased by four percent, according to the Central Bureau of Statistics in Baghdad. Before going to this step, provide the appropriate ground by supporting the industrial and agricultural sectors in the country.”

Present readings

Al-Saadi continued, "We always say that without the presence of strategic projects such as the iron and steel industry, and petrochemical industries, the government's decision will not be useful in supporting the Iraqi industry, because the industry in Iraq is transformative and is limited to giving priority to products manufactured abroad, in addition to the fact that Iraqi manufacturers import all raw materials, and inevitably they will be affected by the rise in the price of the dollar,” and stressed “the need for the government to return the readings of the financial present, especially after the breakthrough in the oil variable, and the rise in oil prices again, and the development of treatments and quick solutions to remedy the situation in the country for fear of the explosion of unemployment and poverty rates and the lack of control over the effects of that.” In the near future".

The Iraqi Ministry of Planning revealed last April that the poverty rate in the country had risen to between 26 and 27 percent, amid high unemployment rates and a lack of employment opportunities in the public and private sectors.

[markb57]

I just don't understand Iraq's "financial experts". Seems all they do is against their own people. The experts need to get more lines of income for the country such a minerals and agriculture.

I don't see how Afghanistan can have a higher dollar rate than Iraq....

 

Makes no sense

 

Oh wait....Welcome to Iraq....

[horsesoldier]

I love these these Captain Obvious moments don’t you !

[Laid Back]

Uncountable articles talking about exchange rate and the high price of the dollar against the dinar.

 

Something will have to change in the near future.

 

Go Iraq 

Go reforms project 

Go development 

Go RV

[GreedyDinar07]

Yea, that’s the problem.... the near future! Is that another 18 years.... some old rehashed BS..... Next!