economy| 10:11 – 28/01/2023
Baghdad – Mawazine News
The Prime Minister’s adviser for financial affairs, Mazhar Mohammed Saleh, put forward proposals on Saturday to confront the continued rise in the exchange rate, including a solution he described as national and comprehensive to provide price stability.
Saleh said, “As long as the fall in the exchange rate is linked to the ability to open up foreign trade and provide a highly flexible commodity supply when needed (through the financing tool represented by the Central Bank of Iraq window for the sale and purchase of foreign currency – the US dollar in particular), which links the speed of financing to the credibility and transparency of trade documents for importers from the private
He added: “As long as government trade is highly governance and outside this restriction by adopting documentary credit mechanisms, which is the traditional rule for trade financing, so that the commercial market can reorganize itself, its contracts and foreign purchases, and in order to contain fluctuations in the exchange rate in a small scale, we propose that government foreign trade (as a wholesale trader) expand currently to provide the
He continued: “We find in the state’s intervention in the field of import trade a comprehensive national solution to provide price stability and provide an atmosphere of counter-competitive (of monopoly cartels) that send negative signals towards the stability of the Iraqi dinar exchange rate.”
He pointed out that “the government commercial economy is the decisive solution and the lever of stability in two directions: the first is to provide a stable commodity supply and reassuring stocks of important goods, especially the necessary goods with low flexibility in demand for them and affect the consumption of the people daily basis, which helps to stabilize the consumer price index and stabilize the standard of living. The second: The abundance of goods supplied through government trade at the official exchange rate is a compensatory supply for foreign currency, and the demand for them is equivalent to helping to reduce the gap between the exchange rates (central exchange rate against the parallel exchange rate), and reduce the impact of these differences in exchange rates on inflation expectations in the economy.”
Saleh stressed in an interview with the official news agency and followed by Mawazine News that “the temporary state intervention in the economy is the best solution until the commercial market adapts to the governance of its import operations from the world markets and the discipline and transparency of its requests before external compliance institutions.” Finished 29/n33