Fixing the dollar exchange rate
Fixing the dollar exchange rate
5-11-2023
Majid Zidan
The exchange rate of the dollar rose again despite the promises of senior government officials that it would return to the official rate of 1320 soon, and measures were taken to stabilize its price, and nearly three months have passed since that, but it is not sufficient and the situation is as it is, and the last statement to Prime Minister Muhammad al-Sudani last Thursday blamed On the banks, of which he said that the majority of them do not contribute to the development process, and that the application of the electronic platform ended the distorted trade, and had it not been for the government’s measures with the Central Bank, we would not have been able to face the exchange rate crisis due to compliance standards, stressing that the dollar exchange rate will be fixed at the official rate .. which is contrary to the words With the reality and the diagnoses of many economists and academics who blame the government’s economic and financial policies, ignoring the main reason that is due to the Iranians buying dollars from the parallel market, and as soon as they stopped at the beginning of last April, the parallel exchange rate against the dinar fell to 1400,But it seems that Iran has returned once again to withdraw the dollar from the Iraqi market with the increase in Iraqi imports, including 10 billion dollars, and due to the availability of large quantities of Iraqi dinars as a result of paying the bills of Iraqi merchants in the Iraqi national currency and the increase in trade with it, and in order to stop this depletion of hard currency, it must be Stopping the smuggling of Iraqi dinars and dollars, developing local products and supporting them as quickly as possible to build a diversified economy that does not depend on oil alone.
Among the indications that indicate and threaten to return the price to what it was before the application of the electronic platform was the increase in the Central Bank’s sales in the currency auction at unprecedented levels in the past days, and the necessity requires reviewing the procedures and limiting the imbalance that led to this deterioration before it escalates and becomes difficult to treat.
We need effective and flexible monitoring that moves quickly, not long waits, and gives the opportunity to speculators to nibble on millions of cash and harm citizens. Also, the huge trade with neighboring Iran and Turkey will put pressure on our national currency and make the stability of its exchange rate in light of the current policies very difficult.
By the way, since fixing the exchange rate of the dinar until now, the citizen has not felt a decrease in the prices of consumer goods and others, and this fluctuation does not allow the merchant and the seller to take the new price, as he still measures everything on the dollar, and he does not trust that the economic and financial policy is effective and achieves for him a commodity commensurate with Its incomes, how much the bank’s policy and procedures are still slow and do not provide for large and small merchants the necessary cash that covers the prices of their imports in the required time, which pushes them to secure them from the black market.
The measures taken are not enough to stabilize the officially decided exchange rate of the dinar, especially since the corrupt find methods that enable them to access them, which require prosecution, knowledge of them, review and closure, toughening of the penalties taken against them, and the amendment and legislation of stricter laws commensurate with the offense they commit.
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