What the barrel loses will be made up by the exchange rate. A look at the financial situation and the opportunity to change the dollar’s price.
What the barrel loses will be made up by the exchange rate. A look at the financial situation and the opportunity to change the dollar’s price.
2025-10-11 | 03:45
SumerianNews-Economy:
Although the elections dominate the political and popular atmosphere, the financial issue is strongly present on the scene. However, the lack of information and conflicting indicators render the issue’s voice muted. The reality indicates that salaries are sometimes delayed, but they continue, and investment activity in the streets continues. Meanwhile, representatives and politicians say there is a hidden financial crisis that will become apparent in the next government.
Parliamentary statements indicated that “inflated operating expenses and the inability to provide the funds to cover them could lead to salary cuts,” but this inevitable outcome is postponed until after the elections.
These statements are countered by government assurances that salaries are fully secured and are a priority. Iraqi government The term “priority” means that the government will allocate any money it receives to salaries, even if it has to cut all other investment and operational spending, including stopping spending on electricity, for example.
But arriving at the truth of the financial situation requires reviewing the numbers, and when excluding all spending on investments or current infrastructure, and focusing on current operational expenses only, we find that Iraq More than 9 trillion dinars are needed monthly to cover these expenses, including salaries, which equates to 300 billion dinars per day.
These 300 billion dinars, with oil exports at 3.5 million barrels per day, mean that the price of a barrel of oil must not fall below 85,000 dinars, equivalent to $65 per barrel.
Oil prices have already hovered around this level over the past few weeks and months, which makes salaries sustainable and secure. However, investment projects have forced the government to borrow domestically from banks, and this is the first sign of a crisis.
However, with the announcement of an agreement Gaza With the ceasefire, oil prices fell to around $62 per barrel, the lowest price since April 2025 and March 2021. At the current export rate, this means it is $3 less than the price required to cover operating expenses of $65 per barrel.
The price of oil lost about $5 of its price with the cessation of the Gaza war, and if the cessation of the Ukraine war is achieved, it could lose another $5, bringing the price of a barrel to $58.
If Iraq’s operating expenses stabilize at their current level of 300 billion dinars per day, which requires 85,000 dinars per barrel, this amount will not be achieved from the $58 per barrel unless the dollar exchange rate changes. Converting $58 to 85,000 dinars means that the price of one dollar should be 1,460 dinars. This is for the Ministry of Finance, i.e., the price at which the Ministry of Finance sells the dollar to the Central Bank. From the Central Bank to banks, it will be 1,470 dinars, and from banks to consumers, it will be 1,480 dinars per dollar.
This option is now actually being considered in the political arenas, as it is believed, and many economic experts have even begun to talk about it, as changing the exchange rate will give…State treasury Half a billion dinars a day.
alsumaria.tv
