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Confidence in the Iraqi dinar is eroding… and the prospect of removing zeros

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Iraq is witnessing a severe financial crisis that began with the outbreak of the Corona virus last year and the decline in global demand for oil, which represents nearly 91% of Iraq’s financial imports.

With the continuation of the financial crisis and the failure to pay the salaries of employees last year, the government resorted to what was called the Iraqi government reform paper (the white paper), which included the devaluation of the Iraqi dinar against the US dollar, and the decision entered into force at the beginning of this year.

With the rise in oil prices globally, the Iraqi government has been thinking about long-term financial strategies that may protect the country from falling into a financial crisis that may be more influential. One of these strategies was put forward by the economic advisor to the Prime Minister, Mazhar Muhammad Salih, and is represented in deleting 3 zeros from the Iraqi currency, Without specifying a date for the implementation of this step.

In every economic equation, the ratio of profit and loss is calculated, which is indicated by the economist Hammam Al-Shamma that this ratio will not be equally present in the equation, warning of psychological disturbances in the Iraqi market in the event of deleting zeros.