The Iraqi government announced the largest reduction in the national currency exchange rate ever, by more than 20 percent. The Iraqi government approved an economic plan for the advancement of the national economy, represented by the devaluation of the currency, and the viability of sectors such as industry and agriculture with neighboring countries such as Iran and Turkey, whose currencies declined by 80% and 60%, respectively.
The Central Bank of Iraq decided to raise the price of selling the dollar to banks and exchange companies to 1460 dinars, from 1182 dinars to the dollar, with the aim of compensating for the decline in oil revenues caused by the deterioration of oil prices. Noting that the main reason behind the devaluation of the dinar is to bridge the inflation gap in the 2021 budget after the collapse of global oil prices, which is a major source of Iraqi financial resources.
The Iraqi Central Bank revealed that the financial crisis that Iraq was subjected to due to the Corona pandemic had led to a large deficit in the public budget, the bank disclosed that the decision to devalue the currency came as a preemptive step and the bank was keen to avoid depleting its foreign reserves, to help the government secure the salaries of public employees. It is worth noting that Iraq depends for 95% of its income on oil revenues. The last time the dinar devalued was in December 2015, when it raised the selling price of the dollar to 1182 dinars from 1,166 dinars previously.
Source (Al-Arabiya.net, Edited)
