Baghdad-INA
The financial advisor to the Prime Minister, Mazhar Muhammad Saleh, confirmed on Saturday that the government, headed by the Prime Minister Ali Falih al-Zaidi, has taken measures to preserve the purchasing power of the dinar and curb inflation.
Saleh told the Iraqi News Agency (INA): “The policy of stabilizing the official exchange rate is based on a fundamental goal of protecting the external value of the national currency and maintaining the stability of the general price level,” noting that “the stability of the exchange rate has contributed to strengthening confidence in the Iraqi dinar and supporting the purchasing power of citizens.”
Saleh added that “the relationship between the stability of the exchange rate and the stability of prices of goods and services in the local market has remained close, given the limited impact of the parallel market on the pricing system and the effectiveness of monetary policy,” explaining that “financing imports through the official banking system and relying on the state’s foreign reserves has contributed to providing imported goods at stable and controlled prices.”
He added that “government policies to maintain stable prices for goods and public services, along with the expansion of modern commercial distribution patterns, particularly cooperative stores and advanced marketing formulas, have strengthened competition and contributed to reducing inflationary pressures and supporting price stability.”
Saleh explained that "among the most prominent factors that put pressure on the value of the national currency are the decline in official reserves, uncontrolled monetary expansion, and excessive reliance on oil revenues, which are currently subject to geopolitical restrictions imposed on the freedom of energy markets, as well as political and regional tensions and their effects on foreign exchange flows and economic confidence."
He stressed that “raising the value of the Iraqi dinar is not achieved through quick administrative decisions, but rather through a long-term reform process based on the stability of monetary and financial policies, diversification of national income sources, and strengthening confidence in the local currency,” noting that “the stability of the dinar remains a direct reflection of the stability of the macroeconomy and its ability to cope with local and international changes, which is what the government is working on through a package of measures to strengthen the value of the Iraqi dinar, including working to strengthen foreign reserves, diversifying the national economy and reducing dependence on oil, achieving stability in the balance of payments, as well as controlling the parallel market, reforming the banking system, expanding the use of electronic payment tools and promoting financial inclusion.”