Iraq's Minister of Finance supports floating exchange rate

Shafaq News/ Iraq's Minister of Finance, Ali Abdul Amir Allawi, said on Thursday that he supports adopting the floating exchange rate policy in Iraq.

"The Iraqi currency is fluctuating, but the Central Bank intervenes from time to time to keep it in the range of plus or minus 5%," Allawi said in a press conference on Thursday.

"The exchange rate is not sacred as it was before. Fixing the rate leads to the accumulation of economic problems and explosion later."

"The Central bank's policy is to maintain this rate and keep the gap between the official price and the market at a tolerable range," he noted, "fixing the exchange rate is vital except in the case of economic indicators that push you towards change."

A floating currency is a monetary system that is not backed by gold or assets and tends to fluctuate in value due to supply and market expectations. Its value is also determined by global demand and the level of foreign reserves.