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# I want_My_ dinar ... Iraqis on Twitter demand the return of the dinar to its previous value

2/26/2021

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Twitter Campaign Against Iraqi Dinar Devaluation
A number of Iraqis demanded that their country's currency be returned to its normal state and raised its value against the US dollar, which made the hashtag # I want_Denary among the most discussed topics on Twitter in Iraq. The Central Bank of Iraq announced a reduction in the exchange rate of the Iraqi dinar against the US dollar, last December, in the first such measure in half a decade, and coincided with a stifling financial crisis plaguing the country as a result of the collapse of oil prices.

A statement by the Central Bank of Iraq stated that the new price of the dinar against the US dollar was set at 1450 dinars instead of the previous rate of 1190 Iraqi dinars per US dollar. And the Ministry of Finance promised, at the time, that "the decision to amend the exchange rate will be a one-time only and will not be repeated in the future."
After the issuance of the decision last year, the Iraqi government reassured its citizens about the decision to reduce the value of the official currency, stressing that it would not affect the classes that depend on local goods, but experts and observers criticized the move and believed that it would increase the already high poverty rates in a country experiencing the worst economic crisis in decades . The Iraqi Ministry of Finance attributed the decision to the government's attempts to address the stifling crisis that Iraq is witnessing as a result of low oil prices, to ensure the protection of the economy and to achieve the reforms that it promised several months ago.

The decision sparked a wave of anger in the Iraqi street, but Prime Minister Mustafa Al-Kazemi defended his government's move and said that he had two options, "either the collapse of the system and the entry into complete chaos, or we enter into a Caesarean section for reform."

​Since the collapse of oil prices earlier this year, Iraq has faced an unprecedented liquidity crisis. The oil-exporting country was forced to borrow from the bank’s reserves in dollars to pay off nearly $ 5 billion a month, representing public sector salaries and pensions.


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The last pages of subjugating the state of Iraq .. subjugating the Iraqi dinar

2/26/2021

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Iraqi Dinar devaluation
Author / Mazhar Al-Ghaithi The West deals with strategy, and it is a mistake not to try to understand what they are trying to do with us through gathering information, analyzing it, and deducing future goals and plans for them so that we can confront them through tight, easy and reluctant planning that depends on loyalty to God and trust in Him and relying on His success. Here we will discuss one of the challenges that are the focus of the hour’s talk, which is changing the exchange rate, and summarize it accordingly: 1. Many observers are confused about the real reasons and motives behind the Al-Kazemi government’s feet to sell dollars at a high price to the people for reasons. Let us think out loud and say is it:

A- To withdraw cash or cash from the people, which exceeds the financial potential of the state, as it is known that the monetary properties in circulation in the market or in the possession of people are higher than what the state owns, and this in itself poses a threat to the state’s financial sovereignty and loss of its balance and threatens the failure of the financial system B - Did the instructions come from America in this regard in order to control the people and the Shiites in particular like this and simply to make it easier to fight them and implement all kinds of plans that they want to implement on them? 2. Is it that the families controlling the global economy want internal control over the Iraqi economy through the window of the World Bank, since it is arbitrary and now in the implementation of a loan to Iraq worth 5 billion and perhaps the intention is to exhaust Iraq economically and this in itself is a harbinger of affairs and has serious repercussions as:

A- Iraq owes the World Bank large sums and benefits will be imposed on it in the next stage. Iraq cannot get out of this crisis and it will be bargained for to implement their plans in Iraq. B - Is the goal of these families is to control Iraqi money, and that will not be done for them except after distorting the reputation of Iraq abroad and reducing its economic power to the bottom through its relationship with the World Bank and keeping Iraq indebted to them for longevity, and this will affect the choices of future generations as they do not They allow Iraq to deal with other countries in financial matters, in order to develop and boost its economy.

3. This stage represents the preparation for the next stage, which is the new global economic system. If the Iraqi financial system and economy are restricted and shackled, it will be soft at the hands of governments and governments, which are controlled by the royal families and they are already infiltrated. 4. If Iraq were to regain its strength and there was a possibility to strengthen the Iraqi dinar, it would be the first in the region and it would be a good supporter of the economy and vice versa, and it would overcome the region’s currencies and economies and would be a global power, and for this there would be no interest for the region’s countries to support the Iraqi dinar and save it from the system’s hegemony. Globalism.

​5. America and most of the dominant forces in Iraq deliberately keep Iraq under the terms of pressure in order to be safe in their future in the event of revolutions, especially as they are frequently repeated. Finally, if you collect everything that has been said and put with it what will happen in terms of a shift in the digital currency, especially in the dollar and digital dealings in buying and selling, in addition to some of what we have previously mentioned about some manipulating the financial balance between Baghdad and the region, it is certain that the clues and features of the next phase will be revealed to you. My brothers who have the word and fair people in Iraq and the region, the solution is simple. We know our patriotic men who defend our rights. Our salvation is by pushing them to power, and any negligence in this matter will lead to the completion of the Tamer rings that will lead not only to the families of our word, but to the shackling and families of our children and grandchildren as well.


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The devaluation of the Iraqi dinar: the ploy of the parties to finance the election campaigns?

2/22/2021

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Salah Hassan Baban "I lost my seat in Parliament after I received more than 3000 votes in the 2018 elections, because I did not pay three million dollars to the head of the bloc that I ran with, so another losing candidate won by paying the same amount." With this "opportunistic treatment" with the candidates, SA (45 years old), a former candidate for the parliamentary seat, is likely to hold the next parliamentary elections. He says, "There are two main sources of financing party budgets for the elections, the first is through corruption in the ministries that they seize, and the second is from external support, especially Iran and Saudi Arabia."

With renewed hopes for holding parliamentary elections on October 10, talk about sources of funding for Iraqi parties in parliamentary elections has returned, raising doubts about the existence of common points or link between the depreciation of the Iraqi dinar against the US dollar and the preparation of influential Iraqi parties to finance their election campaigns, through Several outlets, the most vital of which are private banks, at a time when statistics issued by the Independent High Electoral Commission indicate that about 300 political parties and blocs have so far registered their participation in the upcoming elections with the possibility that the number of political parties and blocs will reach twice what it was in the 2018 elections, which reached 204 parties and blocs.
The political parties ’evasion in Iraq helped the law that stipulates that the parties’ work must be regulated and their sources of funding announced and not disclosed to the public opinion and the voter, provided that they have more than one source of funding, among internal sources, mainly related to ministerial contracts and investment projects that the parties obtain after their participation in The formation of the government within the political quota system in effect in the post-2003 period, specifically the large blocs, and between another external source, where candidates receive financial support from their regional sponsors, especially Saudi Arabia and Iran. While the candidate affirms p. A to “Darj” that the first step in the electoral race has really begun for the big parties by distributing some valuable gifts such as pistols and the like, in addition to food, clothes and various gifts with the purchase of the debts of some media professionals, writers, poets, as well as clerics.
S.A. believes that the political parties resorted this time to a new trick to achieve greater financial gains through lowering the local currency and raising the dollar, which would bring them huge profits, especially since most of the parties own private banks.

The Iraqi government started with the initial steps to implement the terms of the white paper that it launched and marketed a lot over the past months to support its economy by raising the price of the dollar against the local currency from 1184 dinars to 1450 dinars to the dollar at the selling prices approved by the Ministry of Finance of the Central Bank, and this step was negatively reflected on the prices of goods, commodities and needs. The daily percentage of the citizen is not less than 25 percent.
Doubts and many questions have been raised about the possibility that the influential parties in Iraq would stand behind the decision to reduce the local currency against the dollar after the collapse of the dinar, in order to benefit from it to fill the deficit of the government in which it participates and to be able to pay the salaries of its employees in addition to strengthening its budgets as the elections approach, but the Al-Kazemi government and an extension of its failure In the political, security and health files, in addition to her fear of revealing the killers of the demonstrators as she promised before her arrival to the prime minister, although they are known to her, her monetary policies caused employees to lose about 25 percent of the value of their salaries.

​Political writer Ali Al-Baidar agrees with S.A. about the existence of many political parties that own private banks that have lent to the government knowing the poor conditions of the country at the current stage, and they do not have any other means to recover their money with the interest resulting from that, which reached 13 percent, It is thus pressuring the government to force it to take this step, without having any other option to redress bankruptcy, spending on state institutions, salaries of employees and retirees, and a social protection network that includes 8 million beneficiaries.

Al-Baidar describes the Iraqi Central Bank’s submission directly to political interference as “the biggest and greatest mistakes” committed by the political system, and stresses the necessity of keeping this financial institution away from political interference, as it exercises a basic task, which is drawing and implementing monetary policy.
​A former employee of the Independent High Electoral Commission, who was among the cadres that supervised the polling process in 2018, confirms that the candidates' campaigns cost about 60 thousand dollars at least for each of them, and sometimes more than two and a half million dollars for the prominent leaders of the first row in the parties The window, 60 percent of it is spent on purchasing aid for the destitute groups who live below the poverty line, especially in the central and southern regions of the country and the capital, Baghdad, while the other percentages are distributed on organizing various festivals, seminars and celebrations to support the candidates' programs.
No two people disagree that the decline of the dinar and the rise of the dollar reflected on the life of the simple citizen, increased psychological and economic pressures on him, and his life became more bitter, especially with the rise in food prices, electricity and water services, and the pressures of the Corona epidemic on the social and economic situation.

​Journalist Hana Riyadh believes that the argument that the government relied on to approve raising the dollar and reducing the salaries of state employees and international borrowing, due to the impact of the Corona virus on the overall economic situation in the world as a whole, is no longer useful. Oil prices have risen again and exports are still in effect. The market was already affected and led to a recession in global markets, but Iraq suffers from complex problems, including the problem of financial mismanagement and corruption. She asked: “How can we absolve the government of creating a crisis? In fact, there is manipulation and intentional to confuse the citizen, and to follow a policy of trauma treatment.
​And whether Al-Kazemi is responsible for the collapse of the local currency, Riyad believes that the prime minister did not come with a popular nomination, but rather party consensus, so he is dependent on those parties.


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Is there any Difference Between Iranian Rial and Toman And Cheque Rial

2/13/2021

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Sure you are confused about the Iranian rial and toman. You are surely thinking that those are two different words with different meaning. These are the Iranian words that are used for their currency. So, there is no difference between rial and toman. Official currency in Iran is rial. The word toman is used by the local people, especially in the daily based payments and for sure, sometimes it is confusing for the ones that are not Iranians. The common bill these days is 10 000 rial bill, but the local people use tomans, which is deducting one zero. A 10 000 rial bill is called 1000 tomans bill. So, 10 000 rial is equal to 1000 toman and that is approximately $1 . We have to say that official dollar exchange rate is somewhere between 1030 and 1040, which fluctuates a bit up or down. The fluctuations are bigger in the free market. The common types of rial bills are 500, 1000, 2000, 5000, that are available both in coins and bills, and just available in the bills there are 10 000, 20 000, 50 000, 100 000. When the tourist are coming and the passing by travelers are exchanging they usually change the most in 50 000 bills. Before there were available the 100 and 250 bills and coins. Today, you can sometimes, still find here and there these 100 and 250 bills or coins. They were used to function as dime and quarters. For example, we will make you a clear image. For example, one hamburger costs 2000 tomans, which is equal to 20 000 rials and that is equal to $2. A mineral water bottle cost 500 toman = 5000 rials = 50 cents. And the exchange rate market is making quite easy and simple to pay for food or any other service when you are a tourist or a traveler in Iran. But one thing you have to remember. Never mix up the rials and toman. They are same but not same at some point. In back and official working places the official currency is rial and that is only acceptable currency there. In the everyday life, and in free market the toman can be used properly. ​
Finally, we come to cheque Rial which came as a result of the sanctions imposed by USA against Iran back in Trump Era. These are inflation cheque money and there are two cheque Rial denominations: the 500K Bill and the one Million Bill ( which is the largest denomination of Iranian currency. These two bills came to cover the market need for a large bill increase purchasing power.
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The Iraqi dinar Gone with the wind

2/7/2021

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​Iraqis suddenly woke up to the decision to lower the exchange rate of the Iraqi dinar, and were hit by a monetary shock they had not experienced in decades. They were under the illusion that their currency had reached the shore of stability, and that the fluctuations that their dinars had previously known would not witness, which generated emotional and emotional reactions in their depths that made them launch a wave of tweets in which they criticized the government decision intensely, including the hashtag #Banks_the thief, their Twitter accounts, and the demonstrations went out in protest against This decision, which afflicted the poor classes that suffer from the current economic crisis, made them worse by the process of reducing the price of the dinar against the dollar, where one fifth of Iraqis live below the poverty line.

If we review the history of the Iraqi dinar, we will find that it represents the history of Iraq, with all its fluctuations and storms, as its conditions fluctuated with the fluctuations of the summer, winter, autumn and spring seasons, and its first effect was the abandonment of coins from coins and their disappearance from circulation until the paper currency prevailed in the square. It is known that the dinar went through various political eras, as Iraq continued to use Ottoman banknotes for four centuries from 1534 to 1920, until the advent of the British occupation, which replaced this currency with the Indian currency represented by the Anna and the metal rupee, which bears the image of the British King George V to be The only currency in circulation, both paper and metal.
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In the thirties of the last century, coins were issued from all denominations, bearing the image of the face of King Faisal I, and printed in Britain. A year later, the Iraqi dinar was issued, which was linked to the British pound, and then it was decided to peg it to the US dollar without changing its value. After the second Gulf War, and due to United Nations sanctions, previous foreign-printed dinar issues, known as the Swiss dinar, were no longer available. A new banknote bearing the image of King Ghazi I was issued, and then coins bearing the image of King Faisal II were issued. With the republican era, the value of the Iraqi dinar decreased and deteriorated after the Iran-Iraq war, until its value reached low levels, and one US dollar was equal to 3 thousand dinars in 1995. After the fall of Saddam Hussein's regime, the Coalition Provisional Authority issued an Iraqi dinar that was printed at Delaro's presses in Britain with specifications that are difficult to forge, and the Iraqis approached the dream of stabilizing their dinar. Thus is the journey of the Iraqi dinar from the top until what it reached from a permanent turbulent history that has never calmed down, and the reasons for its collapse are known at the present time, which is primarily the dependence on the rentier economy and the slackness of the state apparatus with employees and retirees, which made the government lose its control over the Iraqi dinar as is the case In losing its control over arms and the economy, this economic crisis has nothing to do with the Corona pandemic or with the drop in oil prices, as the government is trying to justify its crises in its inability to find solutions since 2003.

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The recent reduction in the price of the Iraqi dinar came, by a decision from the Minister of Finance and in agreement with the ruling parties, explaining this by implementing the white reform paper as a magic wand, that is, raising the dollar exchange rate to 1,450 dinars after it was 1,120 dinars, considering it an approved price for sale from the Ministry of Finance to the Central Bank And the promotion that this reform paper had received support from the major countries, the International Monetary Fund and the World Bank. The main reason for this reduction is due to the Ministry of Finance borrowing from banks and re-deducting them with the Central Bank in large sums, under the pretext of paying salaries, and meeting other spending needs related to services provided to citizens who are essentially non-existent.

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What increases the current crisis is the fact that Iraq imports almost all of its goods and needs, and makes payments in dollars. In this, the central bank is imagining that the new price will address the crisis, that is, it will act as a balance to meet the government's needs for liquidity without studying the fundamental causes of the great economic deterioration that the Iraqi economy suffers from, and without assigning the sensitive jobs in finance and banks to experts in this field. These talents and experts have always warned about the necessity to move away from the rentier economy and move towards agriculture and industry, supporting small businesses and so on.
Reducing the dinar will not contribute to achieving development that lacks scientific plans. Rather, it would exhaust the Iraqis and increase their troubles in circumstances in which dollars are smuggled into Iran, as this contributed to the exacerbation of the crisis after the imposition of sanctions on it, and Iran is the only beneficiary of the decline The Iraqi dinar against the dollar.

Iraqis fear that the value of the dollar will continue to rise to record numbers, and here the history will repeat itself, that is, the specter of the days of the siege on Iraq looms on the horizon, as the conditions of the Iraqi people have become complicated, and the past of the economic collapse of the recent past is still present, and it is possible that the dollar is equal to about three Thousands of dinars, after the Iraqi dinar was equal to three US dollars in the seventies and eighties. There is no guarantee in the future to stop the deterioration of the Iraqi dinar.

​Undoubtedly, lowering the exchange rate of the Iraqi dinar has negative repercussions on the citizen and the economy alike, because the dinar has lost 20% of its value, while the local market depends on imported goods, which will lead to higher prices, which in turn will increase the number of Iraqis who live without The poverty line is where Marx's maxim is fulfilled: the poor get poorer and the rich get richer.


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Economist: Deleting zeros from the Iraqi dinar leads to the collapse of the Iraqi economy

2/7/2021

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Baquba (NINA) Economic specialist Jamal Shaker ruled out dropping zeros from the Iraqi currency because it leads to the collapse of the country's economy and the Iraqi dinar. He told the correspondent of the Iraqi National News Agency (NINA) today that removing the zeros from the Iraqi currency needs a strong economy and a hard currency in order to be able to re-evaluate the price of the dinar, and this is unlikely in light of a collapsed economy, but the only treatment to gradually strengthen the exchange rate of the Iraqi dinar is an economic plan and exploitation Natural resources, activating investment, controlling outlets, developing oil fields, and completing the large FAO project. He added that floating the currency does not serve the Iraqi economy and causes great harm to the market
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Deleting zeros or printing a new category? .. The Iraqi government's options to save the dinar from collapse

2/6/2021

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A new storm hit Iraq this time with the local currency depreciating against the US dollar after political, security and health storms preceded it with the outbreak of the Corona virus, the decline in oil prices, the government reaching the stage of deficit in paying its employees' salaries, and the House of Representatives having to vote on the internal borrowing law to fill the deficit. The government started with the initial steps to implement the provisions of the White Paper that it launched and talked about a lot over the past months to support its economy by raising the price of the dollar against the local currency from 1184 dinars to 1450 dinars to the dollar at the selling prices approved by the Ministry of Finance of the Central Bank, and this step was negatively reflected on the prices of goods, commodities and daily needs. For the citizen, with rates not less than 25%.
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The crises were exacerbated by this step economically and preceded by health after it was limited to the political and security sides, and all of this came at a time when Iraq is considered a rentier country that depends about 95% on oil to cover state expenditures, especially salaries.
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Loss of currency difference
Economic studies and research conducted by institutions concerned with economic affairs indicated that the Central Bank's sales for the years 2004-2020 amounted to about $ 582 billion, with a loss estimated at 20.7 billion, as a result of the difference between the official dollar and its black market price. The decision to reduce the local currency - which came into effect a month ago - provides about 10 trillion dinars (6.9 billion dollars), targeting the segment of employees who were greatly affected by the decision and lost about 30% of their income due to the high prices of basic commodities that are imported from abroad, including mainly food. Followed by medications.
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Rescue alternatives

Some opinions saw the necessity of finding alternatives to save the dinar and prevent its deterioration further against the dollar, and to overcome this problem came back to talk about some solutions, specifically canceling zeros or printing a higher cash denomination such as 100,000 dinars, but the two possibilities seem to be outside the government's reform measures and the central bank, because there are many Another obstacle is the lack of logistical supplies. This comes at a time when the volume of cash transactions is very large in Iraq, and the vast majority of daily transactions are in cash without banking transactions. Note that less than 25% of Iraqis have bank accounts, and after the devaluation of the dinar against the dollar by about 23%, the exchange value increased by about 25% because most of the goods in the market are imported from abroad and in dollars.

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money smuggling

Economic expert Aqeel Al-Ansari believes that the last procedure does not take into account the reality and future of the Iraqi economy, nor other risks, especially in printing a new currency denomination with a value of 100 thousand, stressing to Al-Jazeera Net that large groups facilitate the process of smuggling and laundering of money to increase its value and decrease its size and thus facilitate smuggling or taking it out. Al-Ansari cites - for the above reasons - what the European Central Bank did to cancel the € 500 denomination in 2019. As for deleting zeros, it is the goal closest to the ambition of the citizen - according to Al-Ansari - as well as the dealer, because of its great facilities, especially in banking and account transactions, which reduces arithmetic errors and facilitates daily dealings of the citizen and the merchant.

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But he warns at the same time that any change at the present time is added to the changes that have occurred and are expected to happen after the approval of the 2021 budget and the entry into force of the white paper, which will increase the confusion in the markets and the Iraqi economy, which is looking for stability. For this, the economist proposes a two-year process plan based on the seriousness of relying on electronic banking transactions, and reducing the need for cash because of its great benefits, including “saving the costs of printing currency, controlling the movement of money, controlling the market, reducing money laundering operations and knowing the volume The real income of the individual and companies and the provision of security for the dealer, in addition to transparency, and after two years the market and the citizen are ready for the process of deleting zeros.

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As for the present time, neither the Iraqi economy nor the markets are ready for such a change, especially after the confusion that occurred after the devaluation of the dinar against the dollar, according to his opinion.

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​impossibility

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In turn, the Central Bank does not agree with making any change to the local currency or addition, whether it is deleting zeros or printing the 100 thousand denomination in the current stage because of the lack of logistical supplies and the need for a long period of time, but it supports at the same time the second option more than the first in the case of differentiation between The best of them - says a bank official, attributing the reason to the impossibility of collecting all these quantities of the local currency within a short period in addition to the need for a long period to print the new currency. A member of the Parliamentary Finance Committee, Jamal Cougar, supported the difficulty of printing a new currency, at a time when the decision was made to reduce the dinar against the dollar.

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In an interview with Al-Jazeera Net, Cougar ruled out the Central Bank going to at least one of the two options, the current stage to restore the dinar to its previous state against the dollar, while continuing to print the 50 thousand denomination below 100 thousand, a trend that has nothing to do with the devaluation of the dinar. The government was forced - as Cougar asserts - to go to the decision to reduce the dinar against the dollar to fill its deficit on the one hand and to support local production, which has declined significantly in recent years, in addition to relieving many of its burdens on the other hand.

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The decline of the Iraqi dinar: Accusations of insulting the government and fears of collapse

2/6/2021

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Iraqis are facing a new phase of crises. The dinar collapses against the dollar and is reflected in rising inflation, and on widespread poverty, in a country floating on oil and its inhabitants plunged into suffering. For the second week in a row, prices of consumer and construction materials have soared in the markets. The reality is getting more and more difficult and complex, which prompted economists to warn of the escaping living problems, and increased popular discontent that has been accumulating for years. The dollar on the main struggle for trading in hard currency in Baghdad recorded a record against the dinar, as it closed Thursday, which is the last day of weekly trading, at 1,320 dinars, up from 1,200 dinars in early December.
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Experts said that the new rise is caused by the government's endeavor to raise the exchange rate of the dollar so that it can reduce the gap between imports in hard currency from selling oil and what it spends on the country's operating budget, as Iraq sells oil worth about $ 3.4 billion, the equivalent of four trillion dinars, which is no It suffices to pay the salaries of employees, which amount to about 6 trillion dinars per month, and with the devaluation of the dinar, the deficit will decrease and the volume of public revenues will be enhanced.

Speculators considered that this official trend was translated into the leak of the draft of the Iraqi state budget for the year 2021, and included setting an exchange rate of 1450 dinars to the dollar, which led to a rush of citizens to buy the US currency with the escalation of fears of the monetary crisis. The draft budget included other controversial paragraphs, including significant reductions in employee salaries, and the imposition of fees on gasoline and cigarettes. A number of MPs stopped the process of leaking the draft budget by criticizing the government.
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The politician and former MP, Izzat al-Shabandar, said in a tweet on Twitter that “the leakage of the Prime Minister’s Office of the draft budget that includes a proposal to raise the price of the dollar, with the Central Bank continuing to sell $ 250 million a day at a price of 1,190 dinars to banks, which led to the collapse of the dinar so that the poor became poorer and the thieves became more despicable. ". Parliament member Thamer Theban accused leaders of political parties who own banks of being behind the dollar's rise, explaining in a press briefing that Parliament had not received the 2021 draft budget.

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For her part, Representative Najiba Najib said, in an interview with Al-Araby Al-Jadeed, that "the high exchange rate of the dollar against the dinar has greatly affected the prices of goods in the Iraqi market, especially imported consumer goods." She added that "95 percent of the Iraqi market supply is imported goods in hard currency, which means it is directly linked to the dollar price, and thus the rapid reflection on the purchasing power and the standard of living of the individual, who suffers from poor cash liquidity due to delayed salaries and high unemployment to alarming levels."

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Najeeb explained that "most of the buying and selling operations inside the Iraqi market and transactions such as selling cars, real estate and rent allowances are paid in dollars, so the effects of the high price of the US currency will cause societal problems in the coming days, unless the Iraqi government and the Central Bank reconsider the financial and monetary policy and control the hard currency market." in the country". According to Jamal Cougar, a member of the Finance Committee in the Iraqi Parliament, there is a government approach to raise the price of the dollar with the aim of reducing the large deficit in the budget bill next year.

Cougar explained, in a press briefing he gave in the parliament building to reporters, that "there is a government approach to gradually increase the exchange rate, because the 2021 Budget Law has a large fiscal deficit, and one of the ways to reduce this deficit is to increase the price of the dollar."

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And he indicated that "the price of the dollar will continue to rise in the coming days, which will greatly affect citizens." Also, a member of the Economy and Investment Committee in the Iraqi Parliament, Nada Shaker Jawdat, confirmed the existence of "great popular concerns about the high price of the dollar against the Iraqi dinar." It showed the danger of this rise on the prices of goods, "where the affected are the poor, who constitute the largest proportion of Iraqi society." She explained that the primary beneficiaries of this are currency dealers, in addition to a number of merchants, stressing in a statement the need for the Iraqi government and the competent authorities to put in place quick solutions to control the money market.

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Iraqi citizens complained about the exorbitant price hikes that affected many goods and consumer goods that are in high demand in such days. In an interview with Al-Araby Al-Jadeed, citizen Mahmoud Al-Jumaili said, "The rise in the price of the dollar suddenly, along with talk about the possibility of its rise to more than 1500 Iraqi dinars, confused the Iraqi market and caused a noticeable rise in prices."

He pointed out that the rise in the dollar pushed citizens to buy their essential needs for fear of being affected by the exchange rate, which led to an increase in the prices of these materials by more than 20 percent. Al-Jumaili added that “the Iraqi market is soon affected by the rise in the price of the dollar due to the greed of some merchants who live on Crises, to raise the prices of goods, taking advantage of the absence of state authority and market control. "

He drew attention to "the continuation of the exchange rate of the dollar to rise in addition to the loss of control over the Iraqi market foreshadowing a real catastrophe that would lead to an explosion of anger on the Iraqi street, which suffers from very miserable living conditions." Citizen Uday al-Akidi said in an interview with Al-Arabi Al-Jadeed that the value of the Iraqi dinar began to gradually collapse, accompanied by a significant increase in prices within the market.

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And he indicated that "the living situation in Iraq is getting worse and there is no hope for the Iraqi economy to recover again, in light of the corrupt's control over the state's capabilities and resources." He added that "all that is imported into the local market, including building materials, electrical appliances, foodstuffs, and auto parts that are often sold in dollars, there has been a big jump in prices, inconsistent with the size of the rise in the dollar exchange value." The World Bank had expected in a previous report that the Iraqi economy would contract due to the drop in oil prices and the outbreak of the Corona pandemic, and as a result, it was likely that the double deficit would increase and increase pressure on the exchange rate and the reserves of the Central Bank. Connotations

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The results of the devaluation of the Iraqi dinar

2/2/2021

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The Iraqi government decided, through the Ministry of Finance, to reduce the exchange rate of the dinar to finance the financial deficit with monetary issues. This decision has serious negative consequences, foremost among which is the deterioration of the citizens' already deteriorating living standards. However, the ministry sees the reduction in several positive aspects. On March 12, 2020, the Central Bank of Iraq website published a report by the governor entitled “Reducing the exchange rate of the Iraqi dinar. Determinants and alternatives ”. He highlights several disadvantages of lowering the exchange rate of the dinar, concludes the necessity of not resorting to this process, and suggests alternative mechanisms. This report, despite the valuable efforts exerted on it, does not address the real crisis of widespread corruption and mismanagement of financial affairs, especially from the spending angle.
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On December 19, the Ministry of Finance issued a decision to lower the exchange rate. And it listed various financial, commercial, investment, industrial and tourism gains.

Why is this apparent contradiction?
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It appears that the central bank report was written before the outbreak of the Corona pandemic, which led to a decline in oil prices and thus to a decline in general budget revenues and a deterioration in the trade balance. These revenues decreased as of last May. But the difference is wide between two things: The first is the timing of the currency devaluation decision. The second is the pros and cons of this process. The above justification is related to the first and not to the second. It is inconceivable that the devaluation of the dinar would lead to negative results before the Corona epidemic and positive after it. The negatives and positives are related to the Iraqi economy and how it is managed. The devaluation of the dinar resulting from issuances to finance the fiscal deficit necessarily leads to an inflation of the monetary mass, which reduces the purchasing power of citizens. This negative impact across the board occurs in the presence or absence of this or that epidemic.

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It appears that the Central Bank has retreated from its point of view, as it participated, along with the Ministry of Finance and other institutions concerned, in preparing the white paper calling for the devaluation of the dinar and defending it vigorously. The Ministry of Finance issued a statement addressed to citizens in the form of questions and answers. The ministry’s opinion includes the implications of lowering the exchange rate of the dinar. We will discuss this opinion here and focus on five points.

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Imported goods According to the ministry’s statement, the prices of “some commodities will rise at once, to compensate for the exchange rate adjustments.” The exchange rate adjustment should encourage the growth of domestic alternatives to imports. In due course, this will lead to price stability… ”. The Ministry believes that the growth of these alternatives will lead to many positive results, including an increase in job opportunities. The ministry's answer is vague, raises several questions, and is inaccurate. When do commodity prices rise once, twice or multiple times? What is the meaning of good time? In fact, the devaluation of the exchange rate leads in all countries to higher prices for imported goods. Which affects the standard of living of citizens. And the vulnerability increases because of the importance of import in the Iraqi rentier economy. The matter does not stop at the various industrial tools, but rather extends to the main food products and energy. Naturally the imports are in dollars. And since the rate of reduction of the dinar was 22.6%, the prices of imports rise, as a general rule, by the same percentage.

Savings
The Ministry of Finance differentiates between two cases: The first case if the savings are in dollars. Adjusting the exchange rate leads to an improvement in its value. The second case if the savings are in dinars. A person would earn a return on it if it was in the banks. According to the ministry, the devaluation of the dinar leads in both cases to gains. This position has nothing to do with scientific analysis and objectivity in the proposition. It neglects the most important and broader case of the savings of individuals without going through the banking institution or in a foreign currency. This money necessarily loses its purchasing power. Nor should it be said that the reduction leads to an improvement in savings in dollars. The ministry confuses value with quantity. There is an increase in the number of dinars, but there is no improvement in its value.
​As for bank deposits that receive interest, they have lost their value due to the depreciation. The dollar exchange rate moved from 1182 dinars to 1450 dinars, meaning the value of the dinar decreased by 22.6%. Thus, in order for the value of these funds not to be affected, the interest rates must be at least equal to this ratio. At present, the deposit interest rate is only 7%. Meaning, these deposits lost 15.6% of their value. The lower the incomes, the greater the suffering. Those with limited incomes The Ministry of Finance poses the following question: What is the effect of the exchange rate on people with limited incomes? It provides the following answer: The government will take measures to offset the negative consequences of the exchange rate adjustment on the poor: increase social welfare allocations.


Retired
The Ministry divides retirees into three categories according to their place of residence. First class: Residents of Iraq. The ministry does not see any negative impact on the level of their salaries. Class II: Residents of the Gulf, Jordan, and European countries. The purchasing power of their salaries changes due to the reduction. Third class: Residents of Turkey, Egypt, Lebanon and Iran. The purchasing power of their salaries will not change because the currencies of these countries have fallen against the dollar.

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Travelers abroad
The ministry believes that Iraqis traveling to Turkey, Lebanon, Egypt and Iran will not be affected by the devaluation of the dinar because the currencies of these countries fell against the dollar. Meanwhile, the costs of travelers to Europe, America and other industrialized countries are rising. The ministry compares the sums in the currency of the host country, which the Iraqi used to get years ago, and the amounts in the same currency that he is currently getting. For example, an Iraqi allocates one million dinars for tourism in Egypt. Before November 2016, the dollar exchange rate was 11.5 pounds in Egypt and 1182 dinars in Iraq. One million dinars was equivalent to 9,729 pounds. Now, the dollar exchange rate is 15.7 pounds in Egypt and 1450 dinars in Iraq. That is, one million dinars became equivalent to 10817 pounds.
Retired The Ministry divides retirees into three categories according to their place of residence. First class: Residents of Iraq. The ministry does not see any negative impact on the level of their salaries. Class II: Residents of the Gulf, Jordan, and European countries. The purchasing power of their salaries changes due to the reduction. Third class: Residents of Turkey, Egypt, Lebanon and Iran. The purchasing power of their salaries will not change because the currencies of these countries have fallen against the dollar.

​

The decision to reduce the par value of the dinar was taken for one reason only, which is to finance the budget deficit, which reached an unprecedented amount. The matter has reached such a degree of danger that the government has become the next option: either to stop fulfilling its financial obligations, especially not paying employees' salaries or reducing the exchange rate. For this reason, the reduction does not produce positive results regarding local production, tourism, investment or employment opportunities. On the contrary, this monetary measure has several effects, all of which affect the decline in the standard of living of citizens, especially those with low incomes.

The devaluation of the dinar does not represent a solution to the financial crisis that the country has been suffering from for several years due to the failure of economic policy due to government options and rampant corruption. Rather, it is a logical and inevitable consequence of this policy. Thus, this crisis can only be addressed with a fundamental change in this policy.

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No foreign reserves support the Iraqi dinar for years * Zwanah: Issuing a new currency needs economic and financial ground and political support

1/31/2021

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​Iraqi dinars are tearing up in the streets of Mosul and other areas under the mob campaign organized by the American occupation forces in Iraq, while many are wondering about the fate of the Iraqi currency and the future of monetary dealings in Iraq, and some analysts believe that as long as the fate of Iraq and its people is no longer clear, how can one expect what the fate of the dinar will be. ?! Will the current currency remain, or will it be exchanged and which central bank will issue it, and where are the corresponding reserves, or will the American dollar replace it at any price, or will barter operations be within the Iraqi market are the most popular ?! The Iraqi dinar declined inside Iraq and after the fall of Baghdad In the hands of the occupiers, the price of the dollar becomes between 3500 and 4000 Iraqi dinars compared to 2000 dinars at the beginning of the war, while it is still the currency in circulation there and is being dealt with in some markets of neighboring countries, including the Jordanian market, in small quantities and a narrow range.

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Mr. Zayan Zawana, an economic and banking marketing expert, believes that the Iraqi currency of all its Swiss and other editions has lost its value in all the correct legal and jurisprudential meanings and concepts of the currency, and that is not now, but for a long time, due to the lack of foreign currency reserves against it, explaining in a statement to the "Constitution" that the issuance of the Iraqi currency For more than ten years, it was a matter of managing the affairs of people inside Iraq, as they were not based on any monetary or financial support and were not matched by reserves that supported the legal currency, especially in light of the restriction imposed on Iraq for a period of 13 years, and the Iraqi government did not control its resources Of the oil exports that were in the hands of the United Nations under the memorandum of understanding.

The expert Zwanah, who was one of the former senior officials in the Central Bank of Jordan, stated that the prices of the Iraqi dinar, in its various canceled and used versions, were the result of dealings and speculation in the markets, stressing that the price difference between the different versions of the Iraqi dinar has no value in relation to the evaluation of the currency. The Iraqi dinar is the Iraqi dinar. . He said that it is difficult to predict what will happen to the future of the Iraqi dinar in light of the chaos and chaos that we see today in Iraq and the absence of an Iraqi administration or authority for monetary affairs, a “central bank,” so forecasting the future cannot take place in this situation He explained that what makes the matter more difficult is that the situation that prevailed before the occupation is the existence of an original Iraqi dinar, but it is officially canceled, but it is dealt with in the northern areas under the control of the Kurdish parties, while there are other editions of the dinar used in all regions of Iraq, and there was a price for each who are they. In response to a question about the possibility of issuing a new Iraqi currency, Mr. Zawana pointed out that any new currency must be based on a monetary, financial and political economic scenario, and this does not exist now, in addition to that Iraq, as it is known, does not now have any foreign reserves that it can rely on to issue a new currency. .

​He said that the new monetary issue should have strong political support, and he wondered about the extent of the Americans ’desire to issue a new Iraqi currency for which they would provide support so that stability returns to life in Iraq, including monetary stability, stressing that monetary stability is very important for the continuation of life in a normal manner. He said that no one now is He pays attention to the importance of monetary stability, which is one of the most important and sensitive matters that should concern every Iraqi citizen, as currency is the life of the people, the economy and the nation, indicating that people now occupy themselves by analyzing what happened militarily and politically and do not pay attention to their lives and to the extent of the destruction that befell them and their institutions, including the bank Central and dinar.

Mr. Zwana clarified that the ability and desire of the Iraqi monetary parties, experts and cadres of the Central Bank, and the Ministry of Finance must also be taken into consideration in dealing with the new data after the occupation, and this undoubtedly will place a great responsibility on the Americans in dealing with officials and experts of the Central Bank and Finance if they wish to do so or Bringing experts from abroad, indicating that any new monetary arrangement must take into account coordination between the United States and the International Monetary Fund to set up clear mechanisms and take the matter into all its legal and practical dimensions in light of the current conditions in Iraq.


On the issue of the Iraqi currency that has been canceled since the beginning of the nineties and is being circulated in the north of Iraq, he said that no one can make a change in this matter based on the data that we see now, especially since this matter has political implications. On the other hand, the Americans, the other currency is used among all the Iraqi people in all regions. No one can expect which of the two currencies will be exchanged in the future. On the possibility of substituting the dollar in principle as another or alternative currency, the expert Zwanah said that “dollarization” may be part of the solutions imposed by the nature of the market in light of unstable conditions and the absence of monetary authority until a new currency is issued with economic, monetary and political data.

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On the other hand, foreign exchange market sources in Amman indicated yesterday that the trading price in Iraqi dinars remained stable yesterday, as the price of one million Iraqi dinars of the Swiss edition bearing the image of horses ranged between 25,000 Jordanian dinars for purchase and 28,000 dinars for sale. While the price of the print bearing Saddam Hussein's image per million Iraqi dinars ranged from 11 thousand Jordanian dinars for purchase and 14 thousand dinars for sale, and it is noticed the expansion of the margin between the sale and purchase price as a result of the increased risk of carrying the Iraqi currency, and the values ​​of the circulation of the Iraqi dinar in Amman in a narrow range with some money changers.

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