PM Al-Zaidi explains 1,500-dinar dollar rate to parliament

Shafaq News- Baghdad

Iraqi Prime Minister Ali Al-Zaidi on Thursday outlined to parliament the reasons behind the government’s decision to change the dollar exchange rate.

Addressing lawmakers during a meeting with parliament’s presidency, Al-Zaidi said the government had faced three alternatives: compulsory savings that would leave employees relying on promises of future payment, paying salaries every 45 days, or borrowing more money and adding to Iraq’s existing debt burden.

“When I took office, our economy was under severe pressure because oil exports had stopped and the Strait of Hormuz was closed,” he said. Public debt exceeded 208 trillion dinars, while the government needed 10 trillion dinars each month, but salaries were still paid despite the crisis.

Al-Zaidi added that speculators had previously benefited from the gap in the dollar exchange rate.

Parliament Speaker Haibet Al-Halbousi said the exchange-rate decision would not be reversed and had the support of political bloc leaders.

Earlier today, Central Bank of Iraq (CBI) governor Nizar Hussein informed parliament’s Finance Committee that the new official rate of 1,500 dinars per dollar was fixed, with the draft federal budget already built around it, according to a parliamentary source. The CBI’s new rates, effective October 7, set the dollar at 1,500 dinars for purchases from the Finance Ministry, 1,510 for banks and 1,520 for the public. Iraq receives almost all government revenue in dollars from oil exports and exchanges those dollars through the central bank for dinars used to finance public spending, including salaries.