Al-Khuzai warns: The continued devaluation of the dinar in the budget will crush the vulnerable classes

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Al-Khuzai warns: The continued devaluation of the dinar in the budget will crush the vulnerable classes

Policy  

2021-02-15 | 04:50

A member of the Committee for Monitoring the Implementation of the Governmental Program and Strategic Planning for the Saeron Bloc, Anaam Al-Khuzaie, expressed her grave concern about the failure of government performance to achieve its set and planned goals.  

Al-Khuzaie said in a press statement that “after two months of devaluation of the Iraqi dinar for development reasons, as announced by the government, the allegations of revitalizing the national product have not been realized.




The Budget Law: Changing the exchange rate despite its inclusion in the text of the draft budget.

Al-Khuzai stressed that "the initiation of devaluation of the dinar for development reasons needs many introductions, of which Iraq cannot achieve a small part of it in the short term."

And she continued, "The devaluation of the dinar in a deflationary situation increases the economic situation and threatens to widen the depth of the existing recession and generate inflationary waves that seriously crush low-income classes, especially with the weak social protection programs necessary to absorb the impact of the exchange rate shock on the vulnerable classes."

Al-Khuzai indicated that "the goal of reducing the dinar exchange rate was double-faced and with financial and monetary motives. The financial motives are represented in the government's desire to maximize oil revenues in dinars to reduce the size of the financial deficit."

Al-Khuzaie added, "As for the monetary motives, they represent the central bank’s desire to reduce its sales of dollars to the market, which is currently achieved at the expense of high prices. Instead of reducing the value of the dinar, work to reduce current spending and reduce the sources of demand for the dollar to maintain price stability and reduce depletion." The dollar reserve at the central bank, instead of reducing the value of the dinar in order to maintain the greed of current spending and sacrifice price stability in Iraq. "

Al-Khuzai called for "to avoid the negative effects of reducing the value of the dinar by (adjusting the exchange rate in the federal budget 2021 to suit the living standards of the poor and low-income people, by amending the exchange rate policy. As was previously done in Article 50 of the 2015 budget when the House of Representatives set dollar sales with a ceiling $ 75 million with equity in the sale. "





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