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.
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.
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.
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.