An economist calls on the government to restructure the rentier economy and move away from the option of devaluing the currency

Wednesday 28, October 2020 09:51
 
Baghdad / NINA / The specialist in economic affairs, Hussein Shaker Tahilo, called on the government to resort to a comprehensive economic reform of the Iraqi economic structure by diversifying the production structure across various economic sectors, such as industry, agriculture, services and even the oil sector, and moving away from the option of devaluing the Iraqi currency. "One of the most important problems facing the economies of different countries is the problem of the relationship between the national currency and other foreign currencies,

" Tahilo told the Iraqi National News Agency ( NINA ), noting that the foreign exchange rate links prices to two different countries or several countries and is a standard through which all prices are translated.

He pointed out that "Iraq suffers from a three-dimensional crisis, which is (economic-political-health) and all of these crises have their negative effects on Iraq in general and on the economic structure in particular, indicating that what is being raised now in the corridors of the Iraqi government through its reform paper Al-Bayda on reducing the exchange rate of the Iraqi dinar that the reduction means (making the value of the monetary unit of the national currency equal to a smaller number of foreign exchange units), which is the currency whose value becomes higher after the reduction. That is, the gap in the exchange rate of the dollar against the dinar between the official and parallel markets is large, This will negatively affect the Iraqi economy. "

He explained, "The main reason that pushes Iraq to reduce its currency is the deficit in the balance of payments, and this is what Iraq suffers under the rentier state," stressing that the reduction will generate monetary inflation and lead to an increase in the prices of goods and services and that higher prices will be reflected in this currency relationship. The country has the rest of the currencies, which may push the government to devalue the currency. / End 8

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