Iraqi central bank announced on Saturday that it will devalue the Iraqi dinar by over 20 percent in response to a severe liquidity crisis sparked by low liquidity oil prices, a measure that has outraged the public as the government fights for payments. Riot police were deployed outside the central bank headquarters in central Baghdad before news of the devaluation sparked protests.
A leaked draft state budget bill for 2021 caused a sensation on the Iraqi streets last week when it confirmed plans to devalue the dinar. The new rates represent a dramatic reduction from the previous official rate of 1. 182 IQD. It is the first cut in exchange rates the Iraqi government has made in decades.
In a statement, the central bank set the new interest rate for the dinar, which is tied to the U.. S.. . Dollar at 1. 450 IQD on sale to Iraqi Ministry of Finance. The dinar becomes 1. 470 IQD to the public and to 1. 460 IQD sold to other banks. The devaluation increased the chances that the dinar will weaken further in the street.
The rate is already at 1. 400 IQD per U increased. S.. . Dollar on Saturday, down from 1. 300 IQD in the last week, at exchange offices.
Since an oil price crash earlier this year, Iraq has been grappling with an unprecedented liquidity crisis. The raw-exporting country had to borrow from the bank’s dollar reserves to pay the nearly $ 5 billion monthly fee for public salaries and pensions. The oil revenues, which make up 90% of the budget, brought in an average of $ 3. 5 billion.
Efforts to introduce reforms met resistance, and to date the government has borrowed internally to pay the state bills. Devaluation would give oil-rich Iraq, which imports almost all of its goods, more dinars to make urgent payments. However, setting a new interest rate was a delicate balancing act to meet the government’s liquidity needs without affecting the average Iraqi.
(Disclaimer: This story was not edited by www. republican world. com and is automatically generated from a syndicated feed. )
Iraq, Iraqi dinar, finance, central bank, devaluation, Iraqi central bank
World news – AU – The Iraqi central bank devalues dinar by 22%
Donnez votre avis et abonnez-vous pour plus d’infos
Vidéo du jour: