December 20, 2020 | banking

Iraqi dinar exchange rate will hit 1,450 per dollar next week: MP

ERBIL, Kurdistan Region — From next week, the exchange rate of the Iraqi dinar will be pushed up to 1,450 dinars per US dollar and will not go lower, according to a Kurdistan Region member of the Iraqi parliament.

“Starting Sunday, the Central Bank of Iraq will set the value of 100 dollars at 145,000 dinars,” Jamal Kochar, an MP with the Kurdistan Islamic Union, told Rudaw’s Hawraz Gulpi on Thursday.

“The Iraqi government will try to keep the exchange rate at 1,450 dinar per dollar and will try to keep it from increasing, however the government will not let it go lower than that,” he added.

The exchange rate has risen recently, reaching more than 1,300 on Thursday, when the Iraqi parliament’s finance committee called for an urgent meeting to discuss the matter.

The government has reportedly planned a currency devaluation as part of a draft 2021 budget.

“The government has set 1,450 dinar per dollar as the exchange rate, however by the time the money enters the market and is available to the people, the rate could go up to 1,600 dinar per dollar, due to exchange markets adding interest,” Fazel Nabi, former deputy finance minister, told Rudaw.

Iraq and the Kurdistan Region have had a rough year financially amid nationwide protests against the government, low oil prices, and lack of a budget for the year. The parliament last month passed the Fiscal Deficit Coverage Bill that allows the government to borrow 12 trillion dinars ($10 billion) from the central bank in order to cover the fiscal deficit and pay civil sector employees for the rest of the year. The bill passed despite a walkout by Kurdish MPs.

While deadly anti-government protests rocked cities and towns in parts of the Kurdistan Region, a Kurdish delegation arrived in Baghdad last week to settle the prolonged budget dispute between Erbil and Baghdad, but they are yet to reach a deal.

“I ensure that negotiations are ongoing, and will go on until we reach a good deal,” Deputy Prime Minister of the Kurdistan Region Qubad Talabani said on Tuesday in response to rumors that negotiations have failed.

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