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.
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.
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.
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."
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."
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.
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.
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