Former Vice President Slams Iraq's Economic Policy

Hussein al-Najem, a financial expert, expected the exchange rate of the Iraqi dinar to keep advancing due to “new measures espoused by the Central Bank of Iraq (CBI) pertaining to controlling the flow of US dollars into the Iraqi market and to the funding of foreign trade.”

Speaking to Al-Monitor, Najem added, “The real value of the Iraqi dinar is strong; it relies on an exchange reserve of $60 billion, which is a weighty cover amid the international economic crisis. The regional challenges have impacted the exchange rate; yet the Iraqi government has contained the crisis through the CBI’s policies in regard to controlling the flow of US dollars into the Iraqi market and regulating the funding of foreign trade.”

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 aforementioned rate is lower than the market rate by 8%. This is what Abdul-Mahdi refers to as “two exchange rates.”

According to Abdul-Mahdi’s statement on his Facebook page, “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.”

“We have to enhance the performance of the economy in order to consolidate it. [We should] become more open for the sake of our society and the national economy, in order to establish a regional and international status for the dinar so as to make it more valuable and increase demand for it. We leaped forward, and our successful monetary policies began to suffer the consequences of the failed economic policies. While we were concerned about pennies, we lost dollars. We accused and detained people first, and gathered evidence later.”

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