Dubai, United Arab Emirates (CNN) – The Central Bank of Iraq, on Saturday, reduced the value of the dinar against the US dollar, in light of the economic challenges facing the country, especially with the decline in oil prices and the effects of the Corona virus crisis.
The bank announced the exchange rate of the dollar against the local currency, to become 1460 dinars per dollar instead of 1182 dinars (the selling price in banks).
Central Bank Governor, Mustafa Ghaleb Makhaif, said in a press statement that “sober precautions enable us to stabilize prices … and the abundance of dollars will make it stable in the market.”
For his part, the advisor to the Iraqi prime minister for financial affairs, Mazhar Saleh, said, Saturday, that “reducing the exchange rate is a measure in a rentier economy like Iraq, directly related to financing the state budget.”
According to the Iraqi News Agency, Salih added that “the reduction has positive effects for holders of real wealth of foreign assets, such as the rich in dollars or owners of foreign assets, such as gold, cars, and others.”
Whereas, “the affected person remains the most affected by lowering the exchange rate, and in all cases with limited income and the poor and vulnerable groups in society, as the purchasing power of their incomes in the local currency will decrease by a decrease in the external value of money, due to the high prices … which requires a government program to compensate the affected.”
On Saturday, Prime Minister Mustafa Al-Kazemi said that his government is working to address the crisis from an economic standpoint.
Al-Kazemi added, during a cabinet meeting to discuss the new fiscal budget,: “Since 2003 we have been suffering from the wrong establishment that threatens the political and social system to completely collapse … Either the system collapses and enters into complete chaos, or we enter a Caesarian operation for reform.
Al-Kazemi, who took office last May, stressed that it is “unreasonable to submit to the previous corruption equation … either we correct the situation or we laugh at the people.”
He continued, “We adopted a white reform paper. All the developed countries of the world, such as South Korea, Singapore and the UAE, made difficult decisions and started with bold steps and a spirit of sacrifice.”
The Iraqi Prime Minister indicated that “the White Paper and the reforms that we are carrying out have received international, regional and political support.”
Prime Minister @MAKadhimi: – Since 2003 we have been suffering from the wrong establishment that threatens the political and social system to completely collapse. Either the system collapses and enters into complete chaos, or we go into a cesarean section for repair. It is unreasonable to submit to the previous corruption equation. https://t.co/GYxdlyM19A
