Al-Sudani’s advisor presents a “national solution” to confront the rise in dollar prices

Al-Sudani’s advisor presents a “national solution” to confront the rise in dollar prices

01-28-2023 11:38 AM

Al-Sudanis advisor presents a national solution to confront the rise in dollar pricesToday, Saturday, the advisor to the Prime Minister for Financial Affairs, Mazhar Muhammad Salih, put forward proposals to counter the continued rise in the exchange rate, including a solution that he described as national and comprehensive to provide price stability.

Saleh said: “As long as the exchange rate decline is linked to the ability to open up foreign trade and provide a highly flexible commodity supply when needed (through the financing tool represented by the Central Bank of Iraq’s window for buying and selling foreign currency – the US dollar in particular), which links the speed of financing with the credibility and transparency of commercial documents for importers.” from the private sector, which is still faltering at a rate that has not risen to 25-30% of the total actual demand for external transfer to finance trade.

He added, “As long as government trade is highly governed and outside this constraint, as it relies on the mechanisms of documentary credits, which is the traditional basis for financing trade, and so that the commercial market can reorganize itself, its contracts and foreign purchases, and in order to contain fluctuations in the exchange rate within a narrow range, we suggest that trade expand.” The government foreign ministry (as a wholesale trader) is currently in order to supply the market with the most important commodities that have a wide impact on people’s lives, which flow according to the fixed official exchange rate of 1460 dinars to the dollar.

And he continued, “We find in the state’s intervention in the field of import trade a comprehensive national solution to provide price stability and provide an atmosphere of anti-competition (cartels) monopolizing trade, which sends negative signals towards the stability of the Iraqi dinar exchange rate.”

He pointed out that “the government’s commercial economy is the decisive solution and the lever of stability in two directions: the first is to provide a stable commodity supply and reassuring stocks of important commodities, especially essential commodities with low elasticity of demand for them, which affect the people’s daily consumption, which helps to stabilize the consumer price index and the stability of the standard of living.” And the second: the abundance of commodities supplied through government trade at the official exchange rate is considered a compensatory supply of foreign currency, and the demand for it is equal to what helps reduce the exchange rate gap (the central exchange rate versus the parallel exchange rate), and reduce the impact of these differences in exchange rates on inflationary expectations. in economics.”

Saleh stressed, “The state’s temporary intervention in the economy is the best solution until the commercial market adapts to the governance of its import operations from world markets and the discipline and transparency of its requests in front of external compliance institutions.”