The state “does not own the dinar” due to the lack of dollar sales. What it gets is enough for 32% of salaries only, and it may turn to “printing”!
The state “does not own the dinar” due to the lack of dollar sales. What it gets is enough for 32% of salaries only, and it may turn to “printing”!
2023-01-21
Yes Iraq: Baghdad
It seems that the Iraqi government is facing a new problem caused by the decline in hard currency sales through the window of the Central Bank. In addition to inflation and the rise in prices that citizens have begun to suffer from, the central bank treasury is close to being empty of the Iraqi dinar, as dollars accumulate in the central bank as a result of monthly sales of oil. , At a time when the central bank is not able to obtain the dinar through the currency sale window by selling the dollar due to the lack of sales.
Iraq’s monthly revenues at the present time from the sale of oil amount to about 8 billion dollars, and the Central Bank needs to sell 5.4 billion dollars of it, in order to be able to provide 8 trillion Iraqi dinars in the local currency that it withdraws from the market by selling dollars to it, to provide the Ministry of Finance with it to pay salaries. amounting to 8 trillion dinars per month.
Providing 8 trillion dinars per month, which requires the sale of 5.4 billion dollars per month, and while the currency sale auction opens only 22 days a month due to holidays on Friday and Saturday, that is, at least the Central Bank must sell 245 million dollars per day in the currency sale window, to provide this amount of Iraqi dinars for distribution as salaries.
At a time when the weekly sale rate of the central bank currently ranges between 350-420 million dollars per week, which means only 80 million dollars per day, meaning that the central bank sells 32% of the dollar sales that it is supposed to sell to save the dinar, meaning that the central bank began to drain the dinar And he can’t find it, while dollars are piling up on him.
And the British “Middle East Eye” website reports, in a report, that the government is now facing a shortage of dinars, which made it struggle to pay public sector salaries and fulfill its other monthly obligations, according to a senior official in the Central Bank of Iraq, stressing that “the problem facing Iraq is scarcity.” Dinars, not dollars.
The report indicates that the dinar shortage is usually covered by currency shares held by the central bank, through internal loans between the bank and the government, or by printing more currencies, or by other financial activities.
And the British website quoted a senior official in the Central Bank of Iraq as saying that “the bank currently owns about 83 trillion dinars, and there is a need for quick solutions.” Accordingly, what the central bank possesses is not even sufficient to implement the budget items, which are expected to reach 140 trillion dinars. .
Information indicates that the Central Bank wants to solve this problem by “printing more currencies,” which means more inflation and a decline in the value of the Iraqi currency, amid political discussions about this step.
yesiraq.com
