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Economist Recommends Re-Valuing Iraqi Dinar & Demands to revaluate the dinar, the government responds


ronscarpa
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Economist Recommends Re-Valuing Iraqi Dinar

15th November 2021 in Iraq Banking & Finance NewsPolitics

By John Lee.

An Iraqi economist has said that re-valuing the Iraqi Dinar could be considered if certain conditions were met.

Dhurgham Mohamed Ali is quoted by Shafaq News as saying:

 

"The exchange rate of the dollar should be gradually reduced to 1,300 dinars [from the current 1,460 dinars] while keeping an eye on the cash transactions to preclude creating a black market, dollar smuggling, and tighten the control over imports.

"The outcomes of the devaluation were detrimental. The inflation rates grew, poverty rates soared, while development rates remained static and foreign currency smuggling exacerbated."

 

The change proposed would increase the value of the dinar by just over 12 percent.

 

Link: https://www.iraq-businessnews.com/2021/11/15/economist-recommends-re-valuing-iraqi-dinar/

 

Another Article Follows Below

(Source: Shafaq News)

Demands to revaluate the dinar, the government responds

ReportIraqi dinar - Shafaq News -  2021-11-12 11:16
 

Shafaq News / Devaluating the Iraqi dinar in the 2021 budget has stirred the discontent of the public, and economic and financial experts alike. In spite of the warnings from its negative economic and social reverberations, the Iraqi Ministry of Finance ascribes it a breakthrough amid a stifling economic crisis that has struck the country.

Last December, the Central Bank of Iraq (CBI) opted to raise the exchange rate of the U.S. dollar from 1,182 dinars to 1,460 dinars to alleviate the ramifications of the plummeting oil revenues, bringing down the value of the Iraqi national currency and the purchasing power immediately. 

As oil prices gradually climbed beyond the 80 dollars a barrel threshold, citizens and economists voiced demands to revaluate the dinar in next year's budget or mitigate the impact of its devaluation on the community.

"The rise is an outcome of a white paper that organizes the process over three to five years. They deem it a part of the economic reform process for the financial situation and banks," economist Bassem Jamil Antoine told Shafaq News agency, "the state cannot change its currency. Still, real reform that serves the poor classes is essential."

“The currency rate is not as vital as compensation for the poor classes, which constitute the bulk of the population; social welfare, ration card availability, and job development are all critical," he said, "unemployment and poverty rates skyrocketed due to lack of job opportunities in the public sector. On the other hand, the private sector is frozen and unable to function properly." 

"The recovery of oil prices must compensate for the people, address the deficit, and provide job opportunities for unemployed youth. This will reinvigorate the market, put an end to corruption, and activate the private sector," he said.

Gradual Revaluation 

Economist Dhurgham Mohamed Ali said that revaluating the dinar shall be contingent upon several factors, "The exchange rate of the dollar should be gradually reduced to 1,300 dinars while keeping an eye on the cash transactions to preclude creating a black market, dollar smuggling, and tighten the control over imports."

"The outcomes of the devaluation were detrimental. The inflation rates grew, poverty rates soared, while development rates remained static and foreign currency smuggling exacerbated," Ali added.

Neglecting the private sector

"The government has not contributed to reducing the poverty gap and unemployment after raising the dollar rates that inflicted all the strata of society," trader Amir Mohammed al-Hasani told Shafaq News agency, "Its concern was how to pay the salaries of officials and ministers without considering the negative aspects of the devaluation."

"The government should have combated the widespread corruption in the Iraqi state, revived the private sector by eliminating the obstacles hindering its growth and activating laws that would provide support and protection to this important sector," al-Hasani said.

"The rise in the dollar has hurt us as foodstuff prices have risen to more than 30% despite the steady salaries we earn," Hussein al-Khafaji, an employee of the Ministry of Education, told Shafaq News agency.

"My salary ends by the middle of the month, forcing me to look for another job to meet the needs of the family," he said, calling on the government to revaluate the dinar.

For its part, a government source told Shafaq News agency that the dollar rates will remain unchanged in the fiscal year 2022.

"There is no change or incident that causes the exchange rate to change," the source said, adding, "the Ministry of Finance has confirmed this."

"Over the previous nine months, the ministry has constantly followed the indicators of devaluation against the dollar," the Ministry of Finance stated on October 5, 2021.

The exchange rate alteration has contributed to a rise in the Central Bank's foreign reserves to 60 billion dollars in April 2021, up from 54 billion dollars in December 2020.

According to the Finance Ministry, the currency rate shift also helped "reduce the demand for foreign currency, lower the dependence on imports, and enhance local production."

"In the context of the crisis, there has been a clear recovery in corporate activity in the last nine months of this year," the Finance Ministry stated. 

According to the ministry, it is working to "reinvest the revenues of the funds achieved to build a target production base outside the oil sector and rely on other sectors, which will contribute to the decline in demand for the dollar as a result of compensating some of the goods produced."

Since the current government's formation, the ministry has adopted plans and mechanisms to reform Iraq's fiscal policy, culminated in adopting the "White Paper", which outlined future economic and financial policy steps to promote domestic production and reduce imports for the country.

 

Link: https://shafaq.com/en/Report/Demands-to-revaluate-the-dinar-the-government-responds

Edited by ronscarpa
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9 hours ago, ronscarpa said:

  "The exchange rate of the dollar should be gradually reduced to 1,300 dinars  

from the current rate 1,460 to 1,300 is just a very very small increase and this isn't what we want it. on the other hand, thanks god, this is just economist's opinion / someone's opinion and i guess the CBI will never listen to them because the CBI will make up their own decision and no one will be able to control and tell the CBI what to do.

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4 hours ago, hspotman said:

Well I forgot what it was when I got into this 12 years ago, wasn't it around 1180 WheresmyRV? ?  So even though we can't treat this thing like a stock, "I'm" not in the green until then.

 It got down to 1166 then went up to 1180 before the current rate. However, that same year Shabibi did try to revalue at a much greater value but Malarki squased that like a bug and Shabibi ran to avoid being arrested.So for those saying the GOI has no say in this RV is a bunch of hogwash. Marlarki installed a new CBI governor who was a patsy for Malarki. And now you know the rest of the story...

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19 hours ago, GreedyDinar07 said:

They haven’t been telling us, they have been showing us by not increasing the exchange rate.  Nothing is going to happen....we will be in this same situation this time next year....!!

New guru. I dont believe any of it, thats been proven time and time again. I just wait and see. I hodl my dinar and keep working till that day or die at my work bench. 

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Reading the headline...” the Government responds “ sent chills down my spine. 

Governments are bloated and the Lions share of bureaucrats are criminals concealing themselves very carefully behind party agendas, country first, we’re here to help you, well you know the rest.

In Iraq’s case, they hide nothing and it’s all in your face. The people rose up not so long ago & and were murdered, maimed & tortured as a result. Lessons learned the hard way. Iraqis are a clever & resourceful people. 

Thankfully we’ve seen tremendous progress since those dark bloody days; in a relatively short time, although it may have not appeared so.

 

Fingers crossed the newly elected government hits the ground running, implementing those things so desperately needed to move the ball, finally into the End Zone.

 

The Best to y’all...Merry Christmas & putting the power of prayer for a healthy & prosperous 2022 to one & all !!!!

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2 hours ago, horsesoldier said:

Reading the headline...” the Government responds “ sent chills down my spine. 

Governments are bloated and the Lions share of bureaucrats are criminals concealing themselves very carefully behind party agendas, country first, we’re here to help you, well you know the rest.

In Iraq’s case, they hide nothing and it’s all in your face. The people rose up not so long ago & and were murdered, maimed & tortured as a result. Lessons learned the hard way. Iraqis are a clever & resourceful people. 

Thankfully we’ve seen tremendous progress since those dark bloody days; in a relatively short time, although it may have not appeared so.

 

Fingers crossed the newly elected government hits the ground running, implementing those things so desperately needed to move the ball, finally into the End Zone.

 

The Best to y’all...Merry Christmas & putting the power of prayer for a healthy & prosperous 2022 to one & all !!!!

"People rose up not so long ago"! All around the world, they were!

Then they released the virus! The loss of life is not important as we are just worker 🐝.

That gave countries a reason to stomp down those protests, and continue with thier globalist agenda and let the petro dollar continue and endless dollar printing continue and the US bonds contine to be bought and the US debt continues to climbs, where No president wishes or is able to fix it in the time they have in office and if they do fix it it would only stop the massive spending that our government officails do not want to stop.

As people see the massive debt spending scheme and are loosing confidence in our governments. More and more people are ending up as economic casualties, and more and more poor people are are flooding our country who are more dependent on government handouts who vote for the party that hands out more, untill we have taxed to death all that have money, the ones that have not fled our corrupt government. 

Our fiat currency $$dollar/ no longer gold backed/that all countries are involved in is coming to a end. The price of gold and silver which has been manipulated, so that the confidence of the dollar remains strong will end one day along with the confidence in the dollar and the rest of the world will revert Back to a gold backed currency. 

Global reset?

Resist, everyone! If we HODL togather it has been proven we can win against these government tyrants. Good luck to all, even luigi.

 

Edited by jg1
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Well this is malarkey......troops withdrawal dec 31st, budget takes effect when Finanical management law kicks in 1st of Jan also start of new fiscal year for Iraq!     Didn’t the financial management law mentioned a rate or need change?? Acccoridng to last years articles?.. I say if we see no rate change by jan or feb March at latest then we wait another 12 months!

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1 hour ago, screwball said:

Well this is malarkey......troops withdrawal dec 31st, budget takes effect when Finanical management law kicks in 1st of Jan also start of new fiscal year for Iraq!     Didn’t the financial management law mentioned a rate or need change?? Acccoridng to last years articles?.. I say if we see no rate change by jan or feb March at latest then we wait another 12 months!

Also if they pay Kuwait off here soon they will hopefully get released from Chapter 7.

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6 hours ago, dinarham said:

The rest of the story goes... Maliki is gone now , and as of December 12 , a new Governor of the CBI .

And yet the corruption remains. Malarki ain't gone or why the heck do we still read about him in these god forsaken articles. He may not be PM but he still holds some semblance of sway in Iraq or do you think unicorns still fart rainbows?

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10 minutes ago, Theseus said:

And yet the corruption remains. Malarki ain't gone or why the heck do we still read about him in these god forsaken articles. He may not be PM but he still holds some semblance of sway in Iraq or do you think unicorns still fart rainbows?


...hang on ! You telling me Unicorns don’t fart rainbows ????

 

My Dad told me that’s where rainbows come from when I was only 5 years old. I’m 66 now and I’m shocked my Dad would tell such a fairytale. While we’re here, Puhlease don’t tell me Fairies are well, a fairytale.

 

OKAY, all kidding aside: Two Thumbs Up to your post. Well, except for where rainbows come from. 
 

All the Best & thank you in advance for your appreciation of HS somewhat warped sense of humor :tiphat:

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2 hours ago, Theseus said:

And yet the corruption remains. Malarki ain't gone or why the heck do we still read about him in these god forsaken articles. He may not be PM but he still holds some semblance of sway in Iraq or do you think unicorns still fart rainbows?

corruption will always remain, as long as they delete the zeros dont really care......they can be as corrupt as they want...look at kuwait they are corrupt and have sacked a number of politicians and parliament numerous times. they want the money just as much as the rest of us

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question on this whole raise/lower value thing ,

they lower the value of the dinar exchange, it hurts the street markets { as in the shops who make pennies on the dinar for shirts and food} ,they raise the value of dinar and all of a sudden they can buy a freaking house, nice cars ,

when else where in the world the value of the currency is a stop gap to percentage movement in big BIG  money { as in over 100 k   buys and bank to bank reserves .

guess i am over thinking this , but wondering why just a little adjustment is such a  hit on the local market?

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9 hours ago, jeepguy said:

question on this whole raise/lower value thing ,

they lower the value of the dinar exchange, it hurts the street markets { as in the shops who make pennies on the dinar for shirts and food} ,they raise the value of dinar and all of a sudden they can buy a freaking house, nice cars ,

when else where in the world the value of the currency is a stop gap to percentage movement in big BIG  money { as in over 100 k   buys and bank to bank reserves .

guess i am over thinking this , but wondering why just a little adjustment is such a  hit on the local market?

has to be atleast for 1:1

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