Fiscal and monetary policies succeed in undermining the parallel dollar, 28 MARCH

  Fiscal and monetary policies succeed in undermining the parallel dollar

Economical  03/27/2024  Baghdad: Haider Falih Al-Rubaie

The exchange rates of the dollar in the parallel market witnessed a noticeable decline, reaching yesterday, Monday, around 146 thousand dinars per 100 dollars, a number that specialists believe may decline further in the coming periods as a result of the success of the financial and monetary policies, stressing that the superiority of the official market, represented by the platform for selling the dollar. The Central Bank, in meeting the needs of foreign trade, led to a decline in the effects of the parallel market for the green currency, while specialists attributed the reasons for this decline to the introduction of the customs automation program (ASYCUDA).

 According to specialists, this decline constituted a positive factor in controlling the prices of goods and materials in local markets. They expect inflation rates to decline in the coming periods if monetary policy continues to succeed in meeting foreign trade financing.

In an image that confirms the solidarity of the executive and legislative authorities to confront the effects of the parallel market, the Parliamentary Finance Committee hosted earlier the Governor of the Central Bank, Ali Al-Alaq, to ​​discuss a number of important files, most notably the procedures for addressing the large gap in the sale of the dollar between the official price and the parallel market, as well as foreign trade remittances.

Through (the platform).” Al-Alaq indicated during the hosting that there were ongoing meetings with the US Treasury, and it was agreed to reconsider the sanctions imposed on Iraqi banks, and that such decisions should not be issued in the future except after discussing and informing the Central Bank of Iraq, as it concerned with monitoring its activity.

In the midst of this, the financial advisor to the Prime Minister, Dr. Mazhar Muhammad Salih, believes that “economic policy played a major role in imposing a climate of stability in the general level of dollar exchange rates,” indicating that “the state of superiority of the official exchange market in financing Iraq’s foreign trade caused a decline in the effects of the market.” Parallel and receding Its illegal activities.

Saleh pointed out to the Iraqi News Agency, “INA,” that “the decline in parallel market rates in favor of the official exchange rate is a tangible success in the cohesion of the country’s economic policy in its three aspects: financial, monetary, and commercial,”

Pointing out that “work and high coordination of policies led to providing an incubator of stability embodied in Relative price calm and containing seasonal price fluctuations for high-demand items, specifically providing basic goods related to consumption and daily living for citizens,” noting “the importance of using the customs policy, which was represented by (reducing customs tariffs and diversifying imports without quantitative limits for basic and necessary goods) as part of the performance of the financial policy in providing stability.” price and guarantee the supply of food and essential goods and production supplies at the official exchange rate and in accordance with the requirements of the national economy.”

Confirming the views of the government advisor, the economic expert, Manaf Al-Sayegh, pointed out that “the existence of coordination measures between the financial and monetary policies indicates the presence of a sound reading among the pillars of the Iraqi economy, and that the strategy that was developed to enhance the value of the dinar has begun to bear fruit.”

However, Al-Sayegh, during his talk to “Al-Sabah,” urged the necessity of knowing the real measures that led to the decline in the parallel exchange rate to ensure its sustainability during the coming periods, with the aim of absolutely controlling the green currency and preventing its rise again, stressing that this decline in the exchange rate could achieve a number of economic gains, The most prominent of which is controlling the prices of goods and materials in local markets, and reducing the rise in inflation rates during the coming periods, and therefore this is in the interest of Supporting individual economics.

Al-Sayegh pointed out that the past few days witnessed a clear decline in the demand for the dollar in the parallel market, which led to a decline in its exchange rate, indicating that the decline in demand resulted from meeting the needs of financing foreign trade by the Central Bank, and therefore the dinar can gain a lot during the coming periods if it is filled. Most of the external financing needs of the private sector.

In turn, the specialist in economic affairs, Dr. Ali Daadoush, attributed controlling the exchange rate and reducing it in the parallel market, to the recent measures represented by the introduction of the Customs Data Automation Program (ASYCUDA) system, stressing that this important government measure is an essential part of reducing the rise in the price of the dollar in Parallel market.

Dadoush also believes during his talk to “Al-Sabah” that “this decline will positively affect the level of per capita income, and will also push people who hoard the dollar to give it up and sell it, which could contribute to the continued decline in the exchange rate, indicating at the same time that this decline in the currency Green prices will ultimately lead to a positive effect of controlling the prices of some goods necessary for the individual, while the rest of the goods, especially luxury goods, will remain high as a result of their connection to global prices, which are high mainly as a result of global inflation.   LINK