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Iraq reveals the truth about reducing the price of the dinar against the dollar
Today, Sunday, the Central Bank of Iraq denied reducing the exchange rate of the dinar against the US dollar, stressing that the exchange rate is fixed and has not changed.
The central bank said in a statement reported by the Iraqi News Agency (INA) this morning, that the statements that have spread recently regarding (reducing the exchange rate of the Iraqi dinar against the dollar) represent the viewpoint of those who stated it and do not represent the official position of the Central Bank, and this was accompanied by a number of rumors that The speculators launched it, which affected the price (temporarily). ”
The bank stated in its statement that the exchange rate is fixed and unchanged, and that its monetary policy is clear and transparent. Although Iraq is the second largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC), it finds itself caught between economic crises, escalating social unrest, and a state of increasing instability.
Iraq has been suffering due to low oil prices since mid-2014; Prices have fallen from an average of $ 100 a barrel to less than $ 40, meaning that a barrel has lost 60% of its value, as Iraq relies on oil to finance 97% of its government budget.
Iraq lost $ 11 billion in oil sales proceeds during the first four months of this year, due to the decline in oil prices, following the Corona virus crisis, according to the Ministry of Oil.
Iraq's oil exports constitute 98% of foreign currency flows to the country, as oil constitutes 45% of GDP and 93% of general budget revenues.
It seems that the oil price crisis will be prolonged in light of the high number of infections with the Coronavirus, and a recent World Bank report says that if oil prices are stable within the low $ 30 limits and no reform measures are taken, the World Bank estimates indicate that the budget deficit will exceed 29% Of GDP in 2020, and total financing needs will reach $ 67 billion (more than 39% of GDP).
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