SUDANESE ADVISOR REVEALS THE SECRET OF PRICE STABILITY: THREE EFFECTIVE GOVERNMENT TOOLS
The Prime Minister’s financial and economic advisor, Mazhar Mohammed Salih, revealed the main reasons behind price stability in Iraq despite global economic challenges.
Saleh told Al-Furat News that: “Iraq enjoys a high level of price discipline, as the government has adopted three effective tools to manage the economic and price file in a precise and harmonious manner, represented by fiscal policy, direct support for goods and services, and coordinated management between state institutions.
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He explained that “fiscal policy, in particular, contributes to supporting prices through the general budget by a percentage exceeding 13% of the gross domestic product, which is one of the highest support rates in the world,” indicating that this “is positively reflected in the general price level and contributes to a decline in annual inflation growth rates.”
Saleh pointed out that “this support includes vital areas that affect the lives of citizens, including fuel subsidies, support for farmers, as well as other forms of support in the food and medicine basket and basic government services.”
THE DOLLAR IS DECLINING.” POSITIVE INDICATORS FROM THE SULAYMANIYAH STOCK EXCHANGE AFTER THE WAR ENDED
On Tuesday, the official spokesperson for the Sulaymaniyah Stock Exchange, Koran Jabbar, linked the decline in the dollar exchange rate in Iraq to the announcement of a halt to the regional war between Iran and Israel. He stressed that any provocations or mutual escalation between regional parties could lead to slight fluctuations in exchange rates.
“The decline in tensions in the region and the emergence of signs of understandings between Iran and the United States have directly impacted the dollar exchange rate in the Iraqi market, which has dropped from 148,000 dinars to 142,000 dinars per 100 US dollars,” Jabbar told Shafaq News Agency.
Jabbar explained that “the recent decline in the exchange rate is linked to a number of political and economic factors, most notably the cessation of military escalation and the resumption of dialogue channels between Tehran and Washington. These changes have also boosted market confidence and led to a relative improvement in the value of the Iraqi dinar against the dollar.
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He added that “recent statements by US President Donald Trump have also contributed to supporting the Iranian currency,” explaining that “Iran, as one of the largest economies in the region, possesses a strong production infrastructure and has been able to build a self-sufficient economy since 1979, making it less vulnerable to collapse due to political and security tensions.”
The stock exchange spokesperson noted that “continued provocations or mutual escalation between regional parties may lead to minor fluctuations in exchange rates, but they are not expected to have a radical impact on monetary stability in Iraq or Iran in the near term.” He noted that “the current price of the dollar in the Iraqi market is acceptable and relatively stable, and is likely to continue unless severe geopolitical developments occur.”
He stressed the “need for a well-thought-out difference between the official dollar exchange rate approved by the Central Bank of Iraq and the market rate, as this plays a significant role in alleviating pressure on foreign exchange reserves and enhancing the effectiveness of financial trading mechanisms.”
The exchange rate of the US dollar against the Iraqi dinar witnessed a significant decline in the markets of Baghdad and Erbil on Tuesday evening, coinciding with the closing of the stock exchanges. The dollar exchange rate in Baghdad fell to 141,600 dinars for $100, compared to its morning level of 142,500 dinars. Prices also declined in Erbil, reaching 141,300 dinars for sale and 141,100 dinars for purchase for $100.
In June the World bank approved a $930 million loan for the Iraq railways extension and modernization project connecting Umm Qasr in the South and Mosul in the north.
This investment will boost domestic trade, create jobs and reduce reliance on oil exports which is necessary for a revalue of the IQD.
A SIGNIFICANT DECLINE IN THE VOLUME OF FOREIGN LOANS, AND IRAQ IS IN THE GREEN SIDE IN INTERNATIONAL CREDIT STANDARDS
Iraq’s external financial policy has improved its global credit rating, with external debt declining to approximately $10 billion.
Despite the rise in domestic debt, economists assert that it poses no risk, thanks to the government’s ability to set interest rates and schedule repayments.
The Iraqi government’s foreign financial policy appears to be improving, as evidenced by a decline in foreign borrowing rates.
This decline raises Iraq’s global credit rating, which is based on the size of the debt and the country’s ability to repay interest.
