Secretary of the Central Committee of the Iraqi Communist Party, Comrade Raed Fahmy, said, “The high exchange rate of the dollar once morest the dinar, and its reaching record levels, was directly reflected in the general conditions of the people, especially the vulnerable groups, given that the country imports most of its needs from abroad. A rise in the exchange rate means a rise in prices, especially with the presence of a section of traders and dealers in the market, who raise prices at rates that exceed the rise in the exchange rate, which causes multiplying effects.
Fahmy said in an interview with “Tariq al-Shaab” that “this reality has an impact on the economic and commercial movement, as the seller cannot price his goods as it should, given that the purchase of the goods is variable in connection with the exchange rate, nor can the buyer make a purchase expecting that the price may change during Coming days. Thus, there is paralysis in economic life.” And he indicated that “the problem is huge and its economic and financial effects are profound, and there will be social effects that may generate great feelings of anger, rejection and protest.”
Powerless tools
Fahmy pointed out that “the tools available to the Central Bank are unable to stop the rise in the exchange rate and pressure on the demand for the dollar, and I have made some directions and proposals that have not yet been implemented, including dealing with countries from which imports are made in their currency in order to reduce pressure on the dollar.” But this seems not to have been done yet. The other aspect is related to the organization of banks and the number of outlets for selling currency and delivering it to citizens, and there has actually been an increase in the number of outlets, but it is not sufficient.
And he added, “There is another measure that can be taken, which is to increase the number of banks that are entitled to enter the currency auction. This was previously a monopoly for a category of banks within a specific classification, and it is possible to expand it by adding other outlets to provide currency.
Fahmy stressed that “these tools are not yet able to stop the pressure, and that there are other measures on the table, some of which are related to regulating foreign trade. There are importers who resort to transfers in order to pay their obligations or to import, and the central bank wants them to switch to credits. But this process for small merchants is costly, and I do not think it will be completed in a short period.
Addressing people’s conditions
Comrade Raed Fahmy stressed that “the urgent matter is related to people’s conditions and living conditions and the duty to alleviate them, and the current situation requires a greater role for the state in the trade balance. As long as the state owns the dollar, it is able to import, especially for basic materials that fall within the consumption of vulnerable families, and on the other hand, it strengthens the ration card, its vocabulary, and its availability.
He added that the state can “import materials and supply merchants with them away from market speculation, and we believe that it can supply some materials to cooperative markets and put them within the reach of consumers, thus masking the effects.”
The bad thing regarding this large center of citizens, and we believe that the state should regulate the commercial sector open to these speculations and others, and therefore the intervention of the state may help in revitalizing other sectors and providing funds for them.
external factor
And Fahmy indicated that “one of the sources of the increase in demand for the dollar is what its sources are external, and it is said that the neighboring countries use the Iraqi market in order to supply the dollar to provide their needs, or that part of Iraq’s obligations are paid in dinars, and this dinar that goes to it returns and enters our local market, and in exchange for dollars.” It goes abroad, meaning that control over border crossings must be tightened, in addition to reducing the demand of neighboring countries.”
Fahmy commented on the measures taken by the government, saying that it “promised to secure and improve the ration card, and took certain measures, such as providing hard currency for travelers. However, these measures are not sufficient to reduce the burden on citizens, given that the spread of the ration card is limited, and the demand for the dollar will continue to rise as long as the factors we mentioned are in place, and with it the continuation of the US government’s measures to control and scrutinize remittances.
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