Al-Zaidi Defends Dinar Exchange Rate Change in Parliament
At a Glance
- Prime Minister Ali Faleh al-Zaidi appeared before Parliament to explain the government’s decision to change the foreign currency exchange rate.
- Al-Zaidi said the government faced major financial pressures, including high public debt and disruptions to oil exports.
- He said the government considered compulsory savings, delayed salary payments, and further borrowing before changing the exchange rate.
- The prime minister also announced higher payments for farmers and contractors starting next month.
Prime Minister Ali Faleh al-Zaidi appeared before the Council of Representatives on Thursday to explain the government’s decision to change the Iraqi dinar’s foreign currency exchange rate, citing mounting debt, pressure on state finances, and disruptions to oil exports.
Key Statements and Focus Area
- Exchange Rate: "Previously, speculators were profiting from the difference in the dollar exchange rate." — Prime Minister Ali Faleh al-Zaidi
- Public Finances: "When I assumed office, public debt exceeded 208 trillion dinars, and the government was required to secure 10 trillion dinars every month." — Prime Minister Ali Faleh al-Zaidi
- Focus Area: The government’s financial pressures and its stated rationale for changing the dinar’s exchange rate.
Al-Zaidi said the government faced three main options as it sought to meet its financial obligations. He said these included compulsory savings, which he described as leaving employees to live on promises, paying salaries every 45 days, or borrowing more and increasing the country’s already heavy debt burden.
He added that the government managed to pay public sector salaries despite the financial difficulties.
Al-Zaidi said the government has moved ahead with a project to distribute one million residential land plots and construct new cities. He added that the foundation stones for residential land projects in Karbala, Najaf, and Nineveh will be laid next Saturday. He also said payments to farmers and contractors will be doubled next month.
The prime minister accused unnamed individuals of attempting to create divisions between the government and different segments of society, without providing further details. The appearance comes after the government changed the dinar’s exchange rate earlier this week.
The Council of Ministers approved the new mechanism on October 6, with the measure taking effect on October 7.
Parliament Speaker Haibat al-Halbousi stated that there will be no reversal or stepping back from the decision to adjust and lower the value of the Iraqi dinar against the dollar and affirmed parliamentary bloc support for the dinar devaluation decision
FYI
Iraq’s recent exchange rate adjustment has triggered parliamentary scrutiny as lawmakers seek explanations about the government’s financial position and the impact of the decision on the economy. Parliament had also been preparing to hear from the finance minister and Central Bank governor on the country’s financial situation.
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