Article quote: “The recommendations stated on several alternatives to make up for the deficit in the financial budget instead of the new peace, most notably float currency for the high price of the dollar against the Iraqi dinar…”
Haitham Al-Jabouri apparently doesn’t realize that most currencies in the world that float are internationally traded and used to purchase imports. Iraq isn’t there yet. All of this would be a great idea if Iraqi’s could buy Turkish tomatoes with dinars, right now they can’t.
The IMF has told them many times they need to get the street rate within 2% of the official rate and so far, they haven’t had much luck maintaining that.
Why would Jabouri believe they could add value to the dinar when they can’t maintain the value now? Move to Article VIII, which will essentially remove demand for the dollar, and then the dinar will begin to rise as the economy grows.
Heck, it’s clear what Iraq’s motive is, they want to save the GOI money.
If they thought the dinar would rise, they wouldn’t spin it as an alternative to cutting the salaries. In the end, Iraq and the CBI control the value of the dinar through the auctions, history has proven that to us.
When they capped the auctions in February the dinar started to slide, in April the rate fell to 1300-1. Add in the tariffs and the dinar lost further value.
They need a solid foundation before they turn this thing loose in a float, IMO.