A source reveals a "trick" behind raising the dollar's exchange rate
Yesterday , 15:20 Economy 2860
Baghdad - IQ
An informed source revealed, Friday (December 18, 2020) a government "trick" behind raising the dollar's exchange rate.
The source, who declined to be named, told IQ NEWS, "The government resorted to raising the price of the dollar, as an alternative to the option to deduct salaries from employees directly, in order to avoid any significant excitement or any negative reactions against the government."
He added, "The proposal to raise the dollar exchange from 1190 to 1450 in the 2021 budget is consistent with the required deduction rate, which is 20 percent, despite their knowledge of the seriousness of resorting to this option, and the problems related to it in terms of currency inflation and high prices."
According to the initial draft of the 2021 budget, which was circulated by the media yesterday, Thursday, the exchange rate of the dollar will stabilize in the 2021 budget by 1450, or 145 thousand dinars for the 100 dollar category.
The leakage of the draft budget for 2021 led to confusion in the exchange rate of the dinar after the leaked draft determined an exchange rate of 1450 dinars to the dollar, which caused a rapid rise in the price of the dollar, which jumped to more than 1,350, up from a margin between 1280 and 1320 in the past days.
In addition, a member of the Parliamentary Finance Committee, Abdul Hadi Al-Saadawi, said in a televised interview, that the governor of the Central Bank, Mustafa Ghaleb Makhif, informed the committee that the Central Bank will raise the exchange rate of 100 dollars to 145 thousand dinars, starting tomorrow, Sunday.
Earlier in the day, Finance Minister Ali Abdul Amir Allawi said that the previous dollar exchange rate "distorted and damaged the Iraqi economy," referring to the adoption of an exchange rate of 1450 dinars per dollar in the fiscal budget for 2021, while he considered that the rise in salaries and pensions "has become A cause for concern, as it now accounts for 120 percent of oil revenues.
Allawi said in a statement reviewed by IQ NEWS, that "the 2021 budget adopted an exchange rate of 1450 dinars per dollar, because the previously approved exchange rate of 1182 dinars per dollar is distorted and does not reflect the actual reality," noting that
"the previous exchange rate harmed the Iraqi economy." As a result, commodities are being paid from neighboring countries, which has negatively affected the local product.
He pointed out that the government "managed the financial crisis with very limited resources without any support from the international community, and that the failure to issue the Federal Budget Law for the year 2020 created additional burdens when preparing next year's budget, and the reason for not knowing the real numbers required in the spending," noting that
"The rise in salaries and pensions has become a cause for concern, as they are now around 120% of oil revenues."