BROADCASTS.com

To see this article in full and MORE  go to: My FX Buddies Blog

Demands to revaluate the dinar, the government responds

link

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.