MP Reveals Error In Calculating Dollar Exchange Rate In Budget Draft
Information/Baghdad... Member of Parliament Mohammed Araboud revealed on Thursday a major error in the calculation of the dollar exchange rate in the draft federal budget law, stressing that the issue of oil revenues and the fate of those funds represents a “perennial problem” that has yet to be resolved.
Araboud told the Information Agency, “The issue of oil revenues and where the resulting funds go is a persistent and longstanding dilemma within the state apparatus, and it is not expected to be addressed or resolved radically in the near future.”
Regarding the impact on the approval of the budget general, Araboud explained, “We have heard of a major error in the method of calculating the dollar exchange rate in the draft budget law,” indicating that “the figures in the tables were drawn and calculated according to the previous exchange rate of 132,000 dinars per 100 dollars.”
He added that "this calculation now requires immediate and fundamental revision, as it has changed by 20,000 dinars following the recent Cabinet decision," noting that "this discrepancy necessitates a thorough review and re-examination of all accounting tables and projected revenues before the project is submitted to Parliament for a vote." End/25h
A Member Of Parliament Reveals That The Government Is Making Revisions And Additions To The Budget Before Submitting It
Information/Baghdad... Member of Parliament Jawad Rahim confirmed on Thursday that the parliament's decision to extend its legislative session was aimed at awaiting the arrival of the draft federal budget law from the Council of Ministers and voting on it.
He revealed that the government is currently making revisions and additions to the law's schedules before sending it.
Rahim told the Information Agency, “The Council of Representatives made a decision to extend its legislative session to it remains in session, allowing it to receive the budget and proceed with its legislation as soon as it arrives.”
He explained that "the law is a pressing priority because 2026 passed without a budget, and the goal is to approve the 2027 budget and avoid a repeat of the delay."
Rahim clarified that “indications suggest the government is reviewing some of the financial schedules and making additions and amendments to them.” He pointed out that "the draft law is still within the government, and Parliament is waiting for its official referral to begin discussing and approving it in the chamber." End/25
Questions Regarding Obtaining Dollars At The Official Rate!!
Written by Dr. Basil Abbas Khudair… The US dollar in Iraq holds significant importance for many individuals for several reasons. Some of these reasons relate to its purchasing power, while others concern its use as a safe and profitable means of saving. There are also significant factors that increase the desire of some to acquire dollars.
The question that is constantly raised is: why is the dollar placed at the disposal of merchants and certain groups while being withheld from the general public? These questions pertain to the official dollar, whose exchange rate against the dinar is determined by the responsible authority.
Employees and retirees, given that they receive a significant portion of the federal budget expenditures each year, seek convincing explanations for the justifications for withholding dollars from them, while they are readily available to others.
The dollar is traded everywhere, even in the simplest commercial outlets and street vendors.
They base their claim to the dollar on two main justifications: firstly, to maintain relative stability in their purchasing power, as increases in their salaries are far less than the inflation rates; and secondly, stemming from the deeply held belief among some that the dollar is a right of the citizen because its source is oil sales and natural resources.
It belongs to the people according to the provisions of the constitution, and dealing in dollars is necessary because many entities still settle accounts with individuals in dollars, including tourism and aviation companies, hotels, shops, real estate sales and rentals, and others.
Some of the reasons they point to seem convincing, including allocating a percentage (according to what is available to the state) to be paid within the salaries of employees and retirees, calculated at the official exchange rates for those who wish to do so. Some of them say that it is an experiment that was practiced after the events of 2003, when salaries were paid in dollars and this did not cause the destruction of the economy and the country.
From the perspective of some experts, distributing a portion of salaries in dollars might resolve some partial issues, but it falls short of being a complete solution. It is likely to have complex repercussions on the economy and related fiscal and monetary policies.
Firstly, it will deepen dollarization and potentially erode the identity of the Iraqi dinar.
Secondly, it will exacerbate the already evident scarcity of the issued money supply. In reality, less than half of it is in circulation, as most is held in savings outside the banking system for various reasons.
Furthermore, converting salaries from dinars to dollars will likely create significant disruptions and encourage some to exploit the situation to obtain dollars for smuggling, money laundering, or other dubious purposes.
The drive to acquire as much dollar as possible, regardless of the parallel exchange rate, could lead to market instability, such as monopolies and price hikes.
For example, someone buying dollars at the parallel rate for import purposes, intending to circumvent government regulations, will sell at the higher rate because they will incur the cost of the dollars when the price of their imports is set. Such scenarios are likely to occur. Confusion regarding what is present in border crossings and markets.
Although the opinion regarding lifting the ban on paying salaries in dollars has drawn criticism, with some believing that withholding dollars from the public is intentional, keeping them under the control of certain entities and fronts that have profited and continue to profit from the difference between the official and black market exchange rates, the gap between the two has been widening for over 20 years.
Today, the difference is significant, especially considering the current objective of changing the exchange rate is to reduce it.
The prevailing rate today is 1670 dinars (and is expected to rise), while the official rate is 1520, a difference of 150 dinars. This is the same difference that existed when the rate was 1320 and the dollar was sold for 1470 (before it increased).
The official stance on this matter is well-known. Oil sales are not fully transferred (in cash) to Iraq because they are under the protection of the US Federal Reserve, which coordinates with the Central Bank of Iraq to cover import transfers and expenditures. There is a mechanism for sending cash shipments to cover some needs, but according to a statement made a few days ago by the Deputy Prime Minister for Economy, these shipments have stopped following the events unfolding in the region and subsequent discussions.
Agreements have been reached and will continue to reach the country with $3 billion for the remainder of this year, equivalent to what Iraq used to receive in an entire year.
Some are asking, if things are so rosy, why were traveler remittances reduced from $24,000 annually to $12,000 at a rate of $2,000 every two months, and then amended at the beginning of this month to $18,000 at a rate of $3,000 every two months?
They further question the reasons for withholding currency exchange for land travel for those unable to travel by air or who wish to travel by land, and why currency exchange is withheld for citizens traveling to certain countries due to America's stance on them.
The issue is between them and those countries, and because of this, dollars are withheld from Iraqis who have the money. If travel to those countries is permitted for all purposes, but currency exchange is prohibited, doesn't this put pressure on the demand for dollars and increase its price in the markets?