Central Bank of Iraq sales expected to rise to nearly $500 million per day
Central Bank of Iraq sales expected to rise to nearly $500 million per day
2025-01-24
Shafaq News/ The “Iraq Al-Mustaqbal” Foundation for Economic Studies and Consultations expected, on Friday, that the daily sales of the Central Bank would reach nearly 500 million dollars in light of the increase in the size of government spending.
The head of the institution, Munar Al-Obaidi, said in a report published today that in 2024, the average monthly spending of the Iraqi government amounted to about 12 trillion dinars, and with the addition of loans and advances obtained by government agencies and ministries, which are estimated at about two trillion dinars per month, the total government spending reaches 14 trillion dinars per month.
He explained that the government sector usually works for 20 days a month, which means that the daily spending rate is approximately 700 billion Iraqi dinars, noting that “to cover this level of spending, the Ministry of Finance needs to sell at least 400 million dollars daily to the Central Bank, so that the latter can provide the cash needed to cover government expenses.”
Al-Obaidi believes that the Central Bank cannot provide the Iraqi dinars needed by the Ministry of Finance except by selling the equivalent in dollars. Therefore, the Central Bank’s dollar sales are directly linked to the increase in government spending. The more spending there is, the more the Central Bank needs to sell larger amounts of dollars.
He pointed out that “if this trend continues, we may reach a stage where the market witnesses daily sales ranging between 400 and 500 million dollars through the various mechanisms adopted by the Central Bank, which reflects the direct impact of the rise in public expenditures on the currency market.”
The head of the institution continued by saying that it is not important to focus on the daily dollar sales rates, but rather the need to focus on the daily spending rates that impose an increase in daily dollar sales.
shafaq.com
