The Central Bank: The devaluation of the dinar increased foreign exchange reserves by 16 billion dollars

Obelisk - the event as it happened

12/14/2021 18:42

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  • Section : Iraq

Baghdad / Obelisk: The Governor of the Central Bank of Iraq, Mustafa Ghaleb, revealed on Tuesday, December 14, 2021, that the country’s foreign exchange reserves had risen to $64 billion, an increase of about $16 billion since the devaluation of the local currency nearly a year ago.

In a statement, the bank said that the central bank has completed the preparation of a study of the currency structure project, indicating that the timing of the project’s implementation depends on the bank’s policy and the political and economic conditions of the country.

He added that the bank has no intention of issuing new denominations of the currency, pointing to the continuation of providing new banknotes to compensate for the damaged banknotes.

And about the negative effects caused by re-exchange of the dollar to 1200 dinars in the event that the next House of Representatives issues a decision to do so, the bank confirmed that this will affect negatively and will lead to the exchange rate in the parallel (local) market getting out of control and consequently sharp fluctuations in the exchange rate lead to Harm the interests of citizens and projects, noting that this will cause a destabilization of confidence in the stability of the financial system in Iraq, and such a decision will lead to the exit of local investment and production projects from competition, and thus exacerbate the unemployment crisis as a result of these projects stopping work.

He added that raising the exchange rate led to an increase in the competitiveness of the local product and thus an increase in its market share, as well as reducing the pressure of expenditures on the Ministry of Finance by 23%, which enabled the Ministry of Finance to overcome the crisis resulting from the drop in oil prices globally during 2020 and the first months of 2021, explaining This also led to an increase in the flexibility of public finances to carry out the necessary structural reforms to achieve fiscal sustainability in Iraq.

With regard to the central bank’s foreign currency reserves, the bank stated that the total foreign reserves during the month of December 2021 amounted to 63.793 billion dollars, pointing out that the volume of net foreign reserves during the current month reached 59.980 billion dollars.

Adviser to the Prime Minister for Financial Affairs, Mazhar Muhammad Salih, revealed that the country’s external public debt has decreased to $20 billion, and that the 2022 fiscal budget will be characterized by greater revenues and less deficit.

Saleh told Al-Masala that the year 2022 will be free of financial hardships and financing restrictions.

Saleh suggested that Iraq is in recovery and will inevitably live in the next 2022 without financial hardships or financing restrictions, caused by a lack of revenues, due to the recovery of the energy market and the boom in demand for oil, in addition to the increase in the proceeds of Iraq’s oil production by 400 thousand barrels per day.

He pointed out that the issue depends on the overall spending ceilings in the budget, and if it is assumed that the spending ceiling in the 2022 budget is the same in 2021, and that the average price of a barrel of oil achieved throughout the year is not less than $75, the oil revenues will alone cover the total expenses in The budget and achieve something from the surplus availability of other non-oil revenues.


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