An expert warns against adjusting the dollar exchange rate and outlines a solution to address the decline in oil prices. Go RV!!
An expert warns against adjusting the dollar exchange rate and outlines a solution to address the decline in oil prices. Go RV!!
2025/08/21
Economic expert Salah Nouri confirmed on Wednesday that adjusting the dollar exchange rate falls within the purview of the Central Bank of Iraq, noting that this measure is a monetary policy tool aimed at achieving economic stability and combating inflation or deflation.
Nouri stressed to Al Furat News Agency “the need to achieve harmony between the monetary policy managed by the Central Bank and the fiscal policy undertaken by the Ministry of Finance through the general budget.”
The economic expert explained that raising the dollar exchange rate—i.e., devaluing the dinar—increases the amount of Iraqi dinars the Ministry of Finance receives from the Central Bank to cover budget expenditures. However, he warned that this measure leads to a decline in the purchasing power of citizens, especially those with limited income.
In contrast, Nouri explained that depreciating the dollar—i.e., increasing the purchasing power of the dinar—reduces the amount of dinars the Ministry of Finance receives, creating difficulties in implementing the general budget, particularly the operational portion. He pointed out that the decline in global oil prices further complicates this problem, as it impacts the state revenues needed to finance the budget.
The economic expert noted that many governments around the world are adopting austerity measures in public spending, particularly regarding unnecessary benefits, to ensure the sustainability of the general budget and meet only basic needs. Nouri concluded his statement by emphasizing that such measures are a necessary solution to support the budget in light of the current economic challenges.
alforatnews.iq
