Is it time to change the exchange rate?
link this is probably my 2nd favorite article about the Iraqi Dinar ever...
The issue of raising the exchange rate from the previous government in the Iraqi budget, which was officially approved on April 1, 2021, was a big mistake, and it was an open theft from the pockets of citizens, and we were against it.
For the record, all the blocs voted for the aforementioned budget, except for the state of law and the national approach, and 3 deputies from Al-Fateh, and it was approved by specific blocs and supported it, and in the presence of 273 deputies out of 329.
At that time, for those who remember, we considered it a big mistake. Instead of establishing a fair protection network and supporting the growing poor classes, the government went to raise taxes and the exchange rate as if the dinar depended on it and not its national currency, which logically all countries intended to invest in and prevent its deterioration, as is happening now in all countries despite inflation taking measures multiple to raise its value.
Today we collect the tweets of Prime Minister Muhammad Shia Al-Sudani, who is the closest to the State of Law bloc that did not vote for what you mentioned, and he himself refused to raise the exchange rate.
We recall, even if there were reasons previously, it was abandoned as Iraq’s coffers were filled with money and logically it had to reduce the exchange rate, even if gradually, and then go to the program to delete the three zeros so that the dinar became a respectable and strong currency and an actual strategic and national stockpile that is better than the dollar and gold together.
This is the controller.. Economist: Changing the dollar exchange rate is very possible
link where has he been ? hahaha
The economic expert, Nabil Al-Marsoumi, confirmed, on Tuesday, that the possibility of changing the exchange rate of the dollar is a possibility, in light of the policy control of the wheel of the economy in Iraq.
Al-Marsoumi said in a Facebook post seen by "The Information" that "reducing the exchange rate of the dollar against the dinar is very possible for political reasons, to gain the approval of some people, or to fulfill previous promises."
He added, that the decision to reduce may be taken "even if the decision has significant economic repercussions or costs."
He pointed out that "it is difficult to expect the new price of the dollar even if the Ministry of Finance and the Central Bank denied the possibility of adjusting the exchange rate because politics in Iraq is leading the economy."
Deputy: Re-raising the value of the dinar will take place gradually
Today, Monday, a member of the House of Representatives from the State of Law, Muhammad Al-Shammari, considered that Prime Minister Muhammad Shia Al-Sudani should focus on three files if he wants to succeed in his program, stressing that the re-raising of the value of the dinar will take place gradually.
Al-Shammari indicated that "the Sudanese are still insisting on raising the price of the dinar against the dollar, but there is an important decision, which is the budget and accounts law."IraqIt is based on the dollar exchange rate of 1448 dinars," explaining that "the re-raising of the value of the dinar will take place gradually."
Possible Revaluation of the Iraqi Dinar?
This is the article from Naders's recent video but there's no new info in it
Iraqi Prime Minister has reportedly told a press conference that his government intends to increase the value of the Iraqi dinar (IQD) against the US dollar.
Kurdistan24 quotes Mohammed Shia al-Sudani as saying that the interests of the needy were not taken into consideration when the currency was devalued by approximately 20 percent in December 2020. "We tend not to repeat that in this cabinet," he said.
But according to Asharq al-Awsat, even though more than 50 MPs have petitioned the government to reverse the devaluation, it is considered unlikely to happen, as it would increase the government's costs by more than $24 billion each year.
Al Araby also cites the Iraqi Finance Minister as saying that the dinar value will not be changed in the 2023 budget bill.
It adds, however, that former Prime Minister Nouri Al Maliki has suggested an exchange rate of 1,375 dinars per dollar, down from the current level of 1,460, but not back to the pre-devaluation level of 1,182.
Iraqi premier to raise Iraqi dinar value
Iraqi government with the help of the Central Bank of Iraq, do its best to increase the price of Iraqi dinar against US dollar, Mohammed Shia al-Sudani, Iraq’s new premier, said in a press conference on Tuesday.
“The interests of the needy were not taken into consideration in devaluing Iraqi currency. We tend not to repeat that in this cabinet,” he said.
Tackling endemic corruption in the country is one of the priorities of this cabinet, he said.
The Iraqi government work with other neighboring other countries to return Iraq’s “stolen money,” he added.
Faced by financial crisis caused by low oil prices amid COVID-19 pandemic, the Iraqi Central Bank decided to devalue the currency, setting the exchange rate at 1,460 dinars per dollar to the public.
Before the decision, each dollar was traded at 1,182 Iraqi dinars.
As Iraq’s market is heavily relied upon imports, the decision sparked public outrage and demonstrations, outcrying the rising prices of commodities.
The former Finance Minister Ali A. Allawi argued that the rising commodity prices was part of the global inflation, defending the devaluation decision as it had increased the state revenue amid liquidity crisis.
The Ministry of Finance: The paragraph to change the dollar exchange rate has not yet been presented in the budget
The Ministry of Finance has denied, on Monday, the proposal to reduce the dollar exchange rate within the budget law for the next year 2023, until now.
The financial advisor at the Ministry of Finance, Abdul Hassan Jamal, said in a statement, "The ministry has actually started preparing the 2023 budget, and soon it will be submitted to the Council of Ministers."
Jamal added, "Adjusting the dollar exchange rate is within the policies of the government and the Council of Ministers, and it is he who takes the decision, but in the budget it has not been presented so far."
He explained, "The budget law will be sent to Parliament as soon as possible."
Finance Minister Taif Sami had previously confirmed that the budget law for 2023 will be a priority for the new government.
3 alternative options for the Sudanese after excluding the idea of changing the price of the dollar
Today, Thursday, economic expert Abdul Rahman Al-Mashhadani reviewed 3 alternative options for changing the dollar exchange rate and returning it to the previous rate, because of its significant negative effects on the .economy
Al-Mashhadani told (Baghdad Today), "A decision to return the price of the dollar will cause major economic problems, so the government has no options but to allocate part of the budget funds for the purpose of increasing the numbers of those covered ". by social care and increasing their salaries
He added, "Citizens must also be supported with food baskets, as these measures will mitigate the effects of the exchange rate hike on the poor classes," noting that "the previous government did not implement these measures on the pretext of the lack of a budget and the absence of political agreements, while it achieved economic ." gains on the Calculate Social Gains
Prime Minister Muhammad Shiaa Al-Sudani had confirmed that changing the dollar exchange rate is dependent on what the Central Bank deems according to its powers only, stressing the government's commitment to the Central Bank's vision regarding .this file
The Central Bank confirmed on more than one occasion that it did not intend to change the exchange rate of the dollar against the dinar or return it to its previous rate, stressing that it would cause major economic problems and reduce confidence .in the Iraqi banking system
Will Sudani Adopt the Previous Iraqi Government’s Economic Policies?
These days, we are seeing increasing speculation, especially among Iraqi elites and economists, about the extent to which the country’s new prime minister, Mohamed Shia al-Sudani, can reverse some of the critical economic decisions that the Coordination Framework had criticized Mustafa al-Kadhimi’s government of taking. Topping the list are the decision to devaluate the Iraqi dinar and a couple of other economic policies.
Dr. Nabil Al-Marsoumi, an academic and economist, said the program put forward by Sudani’s government did not mention reversing the decision to devaluate the currency by over a fifth - with 1,480 rather than 1,180 dinars becoming the equivalent of one US dollar.
The failure to reverse the decision of the former government demonstrates that its critics, most of whom are part of the pro-Iran Coordination Framework, had exploited the devaluation and its ramifications for the Iraqi people’s purchasing power as a pretext to undermine Kadhimi’s government.
“There was no amendment to the exchange rate in the government’s 2023 budget,” Marsoumi stressed. This affirms that Sudani’s government - and with it, the Coordination Framework deputies who dominate parliament - has backtracked on the exchange rate.
Marsoumi added that reversing the decision taken by Khadimi’s government and bringing the US dollar exchange rate back to 2020 levels would increase the government’s budget by 24 billion dollars.
He noted that over 50 MPs recently petitioned the government to reverse the decision. Sudani’s government, however, did not show any enthusiasm for this step, meaning that the decision taken by the former government had been correct despite the sharp criticism that had been levied at it at the time. Indeed, it is a decision several figures and platforms close to the Coordination Framework continue to criticize it.
Moreover, other economists have noted that the new government’s program did not mention the economic agreements that Kadhimi’s government had concluded with Arab countries.
Many within the Coordination Framework had criticized this decision and fiercely opposed it, especially those that are particularly close to Tehran.
Among them is the accord to sell Iraqi oil to Jordan at a discount and the economic agreements concluded with Egypt and Jordan, and the electric grid agreements with the Gulf states and Türkiye - more evidence that “Iraqi political forces usually pursue their private interests.”
While Sudani had called for reducing the salaries of high-ranking Iraqi officials, which he said would save the government 500 billion dinars (about 400 million dollars) a month, this seems unlikely. Indeed, many observers have said that they doubt Sudani will be able to do that since most ministers and senior officials are affiliated with the parties and groups in power. They are not simply going to roll over and surrender their privileges.
Experts believe that instead of a reduction in salaries, we could see Sudani make cuts to the privileges and financial incentives that come with such positions. In fact, they often cost the government multiples of the officials’ salaries. These incentives often take the form of funds allocated to the minister or official’s office, as well as a budget allocated for security.
An economist explains the damages of decreasing the dollar exchange without prior preparation
Duraid Al-Enezi told {Euphrates News}: "There are observations on the government program, especially with regard to the dollar exchange rate, which is an economic issue."
He added, "There are observations on some economic figures in the ministries, and they need an economic committee, and we are against decreasing the exchange rate of the dollar, and they are the same observations that were made in changing the basic exchange rate, but it is in a different direction. exchange the dollar.
Al-Enezi stressed, "There must now be other requirements that are different from the previous ones, in order to cover the problems to restore or reduce the exchange rate."
Prime Minister Muhammad Shiaa al-Sudani said yesterday that the Central Bank of Iraq is the only party responsible for decreasing or changing the dollar exchange rate.
Al-Sudani said in his first press conference after assuming the premiership: “This government is committed to implementing laws, as well as to the law of the Central Bank, which authorizes this institution to formulate monetary policy, and the decisions and policies that the Central Bank deems necessary. the topic".
And he indicated that "the decision to change the exchange rate in the past was not accompanied by protection measures for poor, middle and low-income students, and this exacerbated the problem and its negative repercussions on citizens."
The Central Bank comments on Al-Maliki's proposal to reduce the dollar exchange rate
An official source in the Central Bank of Iraq commented today, Wednesday, on the proposal of the leader of the State of Law coalition, Nuri al-Maliki, regarding reducing the exchange rate of the dollar against the Iragi Dinar to to 1375 dinars against the dollar The source, who requested anonymity, told "Baghdad Today", "The Central Bank of Iraq does not intend to change the exchange rate of the dollar against the Iraqi dinar, during the next stage at the near or far level, and any manipulation of this price will have significant negative .consequences for the Iraqi dinar." Iraq's economic situation
And he indicated that "the Central Bank of Iraq will keep the current exchange rate as it is without any manipulation, and this matter was resolved and the new government was informed of this decision according to an economic vision that supports the Iraqi economy at the near and ".long levels Today, Wednesday, the leader of the State of Law coalition, Nuri al-Maliki, proposed a "compromise" to the issue of changing the dinar's exchange rate against the dollar, after Prime Minister Muhammad Shiaa al-Sudani aborted the hopes of those expected to reduce the price of .the dollar by the new government
Al-Maliki considered that setting the price of the dollar at 1375 dinars per dollar, to pay the damage on the citizen and the national economy, after economists confirmed the extent of the damage caused to the national economy in the event of returning the price of the dollar to the .previous price of 1190 dinars to the dollar Prime Minister Muhammad Shia Al-Sudani had confirmed that the exchange rate is subject to .what the Central Bank deems, stressing his government's commitment to the bank's vision
Al-Eqabi: The 2023 budget will be explosive...and reveals the reason for Al-Najjar's resignation
Al-Uqabi said; For the “Al-Mastra” program broadcast by Al-Furat satellite channel this evening: “After changing the exchange rate, the 2023 budget is sure to be explosive, and we expect its actual revenue to reach 120 billion dollars, equivalent to 160 trillion dinars, but the important thing is the mentality of dealing with the budget.”
He stressed, "the importance of changing the mentality of spending in the budget and moving away from the methodology of formulating our wrong budgets, and they must be based on the higher interests of the state and the real suffering of citizens and the vital investment and service sectors."
Al-Uqabi added, "The current form of the budget is what the Iraqi state has been accustomed to for the past 100 years, and we hope to change it in terms of form and content. 90% of the budget value goes to useless expenses, 45% of salaries, 25% of social benefits, 15% of loan installments and interests, and 5% of subsidies." "
And he indicated that "the 2021 budget was dreamy and unrealistic, with loans of more than 56 percent, and our oil revenue in 2022 by 95 percent. If the oil price drops to half the current price, we will be unable to pay salaries," stressing "the need to develop the tax and customs sectors to enhance oil revenues."
Al-Uqabi pointed to "Iraq's need for strategic planning to develop the productive sectors, and the oil revenues planned for the 21st budget are 20 trillion dinars, and the non-oil revenues are 12 trillion dinars."
He added, "The negative effects of the decision to raise the exchange rate must be addressed, and employees who receive salaries of less than one million have been affected by the raising of the dollar, as well as those entitled to social assistance," stressing "Iraq's need for 125 billion dollars to complete the lagging projects."
Al-Aqabi called for “structuring the state and placing power in the hands of national competencies capable of achieving, as some governors did not spend the money due to their inability to accomplish, and the necessity of limiting spending to vital sectors such as agriculture and industry, which need 5 years to reap the fruits of strategic investment plans.”
He continued, "The oil-producing governorates are suffering and the actual expenditure of petrodollars must be increased to address the negative effects of the projects. Previous governments failed to withhold these allocations, and educational and educational infrastructures were neglected over the past years, and the sums recycled for the development of the region can be invested centrally."
Commenting on the resignation of the head of the National Investment Commission, Al-Uqabi concluded by saying, "Suha Al-Najjar had nothing to do with investment and she did not manage the commission, but other people appointed by the former prime minister and brought to certain accounts linked to the person of the prime minister."
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