Clare
Article: “Plunging Oil Prices Jeopardize Iraq’s Budget: Will the Government Resort to Dollar Revaluation?"
Quote: "Iraq is bracing for renewed economic turbulence as oil prices fall below the critical $65 per barrel mark—five dollars short of the benchmark adopted in the country’s federal budget.
The slide in global crude markets threatens to erode the very foundation of Iraq’s oil-dependent economy , prompting speculation over potential fiscal and monetary policy shifts..
Quote continued: "...The central bank’s hard currency reserves, considered a last line of defense, are unlikely to be tapped under current circumstances. Still, one policy instrument remains within reach—and contentious: the exchange rate. Economic expert Ahmed al-Ansari noted that while Iraq’s reserve fund is generally safeguarded for emergencies, adjusting the value of the Iraqi dinar relative to the U.S. dollar remains a plausible option. “We’re unlikely to see the reserves touched, but a revaluation of the dinar, coupled with domestic borrowing, could help bridge a potential deficit,” al-Ansari explained."