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Iraqi dinar devaluation exacerbated financial and living crises

Iraqi dinar devaluation

Iraqi dinar devaluation has increased the financial hardships experienced by the Iraqis, and increased the living difficulties that haunted them in light of the deterioration in the economic indicators in recent years.

Iraqis are increasingly demanding the government to reduce the devaluation of the dinar as revenues increase along with the noticeable rise in oil prices.

Iraqi dinar devaluation

The reasons that prompted the Iraqi government to reduce the value of the dinar and increase the suffering of the citizens, can be compensated for by the high price of oil.

The Iraqi financial authorities said the devaluation of the Iraqi dinar led to a decline in the monthly costs to less than $4 billion.

The devaluation of the Iraqi dinar caused an increase in the living crisis in the oil-rich country, as prices rose and purchasing power decreased. At the same time, the Coronavirus repercussions continued affect jobs and incomes. The dollar ever since has become a new commodity that worries Iraqis and increases their daily concerns.

A new movement began within the Iraqi parliament that keeps pace with the street, and aims to re-adjust the exchange rate of the Iraqi dinar.

The Central Bank of Iraq had fixed the selling price of the dollar to banks and exchange companies at 1,450 dinars, instead of 1,182 dinars per dollar, with the aim of compensating for the decline in public revenues in the country and closing the inflation gap in the 2021 budget after the collapse of global oil prices during the last period.

Parliamentary action

Representatives in Parliament assert that there is no justification for keeping the exchange rate low with the return of the recovery in oil prices.

Some experts believe that the decision cannot be easily reversed and that it will create great confusion in the market, which may be greater than the one caused by the devaluation of the dinar for the first time in December of last year.

On the other hand, others believe that the parliamentary movement to be populist, while others support the demands of the representatives, as they are a pressure that may alter the prevailing government policies.

In turn, MP Sabah Al-Ugaili says that the dollar exchange rate has not changed as a result of supply and demand, but rather by a decision by the Iraqi government and the Central Bank to reduce the large deficit in the general budget.

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