As oil prices hurt revenue, Central Bank of Iraq devalues diner

Central Bank of Iraq has increased the sale price of U.S. dollars to banks and currency exchange companies by 16 dinars, or 1.37 percent, as government of Iraq is intending on compensating declining oil revenue.
The Central Bank said in a statement that the sale price of the dollar "has been adjusted to 1,182 dinars."
Mudher Saleh, a top economic adviser to Prime Minister Haider al-Abadi and former deputy central bank governor, noted that the previous price was 1,166 dinars for a dollar.
Mr. Saleh stated, "This is a small adjustment, it's not a devaluation. It will increase government revenue to meet local needs."
A global oversupply of crude oil has pushed prices to below $40 a barrel from more than $100 a barrel in June 2014. The government depends on oil sales for 95 percent of its revenue.
Abdul Rahman Najm, an economics professor at several universities in Baghdad, said, "It may be the first of many steps to reduce the budget deficit and increase the local income. As no improvement in oil prices is expected, there will be more steps to reduce the value of the dinar versus the dollar."
He added that Iraq at present needs revenues to continue its fight against Deash. Iraq's armed forces on Sunday said they are preparing to launch a new offensive to capture Ramadi, the capital of the western province of Anbar that fell to Islamic State in May. Other cities that also remain under the militants control are Falluja and Mosul, Iraq's second-largest city.
The oil price decline forced the government to cut its spending to 105.8 trillion dinars in the 2016 budget, compared with a spending forecast of 119 trillion dinars in 2015. The budget deficit next year is set at 24 trillion dinars, about the same as this year's 25 trillion-dinar forecast.