Raising the dinar exchange rate

Finance Minister announces raising the dinar exchange rate

The Iraqi Minister of Finance, Baqer Jabr Al-Zubaydi, described the budget of 2007, as “ambitious” seeking to resolve the problems of the country in the area of security, investment and unemployment, and expressed his hope that it will to contribute to increased economic growth to 8 or 10%.

The minister said in a press interview that oil resources forms 93% of the budget, while the rest will be secured from taxes and fees. He referred to the allocation of more than ten billion dollars for investment eight billion for security, in addition to about seven billion dollars to support the Ministry of Oil.

He pointed out that the latter amount came from the sale of oil derivatives to citizens, in addition to three billion dollars, for the implementation of projects and building new refinaries.

As for the role of the budget in raising the value of the dinar against the dollar, Azzubeidi said that a decision was made to raise the value of the dinar against the dollar in the budget, and the rate was determined purely by 1260 dinar, hoping to return to its normal state like the Gulf currency, as befits a country rich in oil and other wealth, and hoping to decrease the rate of the dollar to 1000 dinar during the three or four years.

And on the subject of lifting support from oil derivaives, he pointed to an agreement with the International Monetary Fund, which pledged to cancel $ 100 billion of Iraq's debt in return for the implementation of economic reforms, pointing out that these reforms developed by international experts, in coordination with the Iraqi government, the Ministry of Oil and Iraqi economists.

He pointed out that the Ministry will continue to support oil derivatives with about seven billion dollars this year, by providing the refineries with free crude oil by 400 thousand barrels a day. The ministry then will sell oil derivatives to citizens, in order to allow it to recover the outstanding amounts estimated at seven billion dollars for the implementation of projects, in addition to allocating three billion dollars of the budget to develop the drilling of oil wells, extending oil transport pipelines and building new oil refineries. He explained that the increase in the prices of oil derivatives will include high-quality imported gasoline, used by luxurious cars, according to the source.

He stressed that dealing with inflation lies in the dinar, since its low rate against the dollar is the main cause of inflation, in addition to obstructing the arrival of goods to the Iraqi depth. He pointed out that the current inflation is temporary and the high prices of oil derivatives are another cause for it, since it affects the prices of other goods and services.

He emphasized that the crisis of the arrival of goods from the border outlets to the Iraqi market, caused by the deteriorating security situation, the presence of criminal gangs, and administrative corruption, which led to the loss of large quantities of goods and the revival of smuggling operations.

He pointed out that the port of Basra is unable to complete unloading cargo, as some ships delayed more than a month from the date of discharge, which costs the authorities huge fines. He also revealed that his ministry is preparing a study for the rehabilitation of “Khafar Al-Mai” outlet between Iraq and Saudi Arabia, associated to the Saudi port “Al-Ameeq”, to provide a route for the entry of goods into Iraq.

Source: IRAQdirectory.com