Government spokesperson says budget release will counter dinar depreciation
Shafaq News/ The Iraqi government hopes that the scheduled release of budgetary funds next month might trigger currency stabilization, a government spokesperson said on Sunday.
This comes amidst an undercurrent of currency speculators leveraging strategies with origins tracing back to the 1990s to manipulate the foreign currency market.
Government spokesperson Basim al-Awadi, in a statement to Shafaq News Agency said, "The budget's release ensures the availability of funds, raising liquidity channeled towards ministries, general directorates, independent entities, and all state institutions."
"Numerous financial advisors in the government anticipate that the inflow from the budget could serve as a significant catalyst in decreasing the dollar exchange rate substantially."
He attributed the recent hike in exchange rates to the decision of barring 14 Iraqi banks from U.S. dollar transactions, observing a detrimental reflection of this move in the market. This, coupled with the savvy performance of currency speculators, created a volatile financial landscape. "These currency speculators possess extensive expertise since the 1990s, operating with remarkable dexterity and subterfuge," he added.
"For the past five months, our measures have been transparent. While the exchange rate oscillates, the government remains resolute in its strategies, operating in tandem with the Central Bank's blueprint."
Contradicting government optimism, economic experts speculate that the dollar rate could stabilize in parallel markets at levels surpassing 150,000 dinars for every 100 dollars. Despite recent endeavors, the Central Bank of Iraq has struggled to rein in the parallel currency market and recalibrate the exchange rate to the official figure of 1,320 dinars per dollar.
Al-Awadi concluded, emphasizing the government's legal adherence, "We deal with dollar speculators according to the law, necessitating legal measures spearheaded by economic security and state agencies in this direction."
