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Iraqi economy slammed by former vice president | ||
| 26/05/2013 | ||
It has to be noted that Adil Abdul-Mahdi is one of the important member of Islamic Supreme Council headed by Ammar al-Hakim. He was the minister of economy of Iraq, during the reign of former Prime Minister, Ayad Allawi. Later, he was appointed as the vice president before presenting his resignation due to different political conflictions. Abdul-Mahdi has written on his personal Facebook page that the dramatic fluctuations of the currency or Iraqi dinar in comparison to the Dollars, since the start of this April are a big concern for the country. No wonder fall in dinar price has resulted in price rise in the local markets and with low salary profile people are struggling to find their way in this economic turmoil. He mentioned, “The high demand for the US dollar that we have seen for months has been widening the gap between supply and demand, at about $60 million-$70 million per day. A black market has emerged, in addition to two different exchange rates with a difference of 8%-10%.” Since the beginning of the year of 2013, the price of Iraqi dinar is falling down, which hit its nadir last week when the dinar dropped from 1,200 per US dollar — the exchange rate registered in March — to 1,300 per US dollar. Following this, parliamentary Financial Commission has stated that half of the Iraqi employees under state will be paid in dollars so that they do not have to face struggles in their daily needs. Also, last week, a little rise in the price of Iraqi dinar has also been recorded. Hussein al-Najem, a financial expert, stated that the exchange rate of the Iraqi dinar to keep advancing due to “new measures espoused by the Central bank of Iraq. He remarked to the media that the real value of dinar is strong enough – it relies on an exchange reserve of 60 million dollar. Due to the regional challenges the impact over exchange is experienced in Iraq. The CBI sells US dollars to Iraqi banks at a rate of 1,179 Iraqi dinars per dollar, provided that banks do not sell these dollars to Iraqi citizens for more than 1,189 dinars per dollar. The rate is even lower than the market rate. Abdul-Mahdi remarked these as two exchange rates. In his Facebook Page, he stated, “This is a disturbing issue that takes us back to the policies of inflation and multiple exchange rates.” He continues, “Our problem is that we have a strong dinar coming from the oil revenues within a fragile, single-product economy that depends on foreign [markets], not only for imports and tourism, but also for medical treatments, migration, residence, investment, speculation and savings.” Abdul-Mahdi believes that “if concepts and measures are not altered in tandem with the changing of regimes, they will clash — as is currently happening. When we abandon the official exchange rate for the sake of supply and demand; restraining transfers, save for a few exceptions, and we instead lift the restrictions after fulfilling the requirements; when we seek to become a civil economy and a market economy, only then, when the strong dinar is not allowed to meet its needs in dollars, will the economy be weakened.” | ||
Last Update:: 26/05/2013 | ||
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