Dinar devaluation will save Iraq 12 trillion dinars in 2021: parliamentary finance committee member

ERBIL, Kurdistan Region — The devaluation of the Iraqi dinar will save the country 12 trillion Dinars (approx. $8.3 billion) this year, a member of the Iraqi parliament’s finance committee told state media on Sunday.

“The step to devaluate the dinar to fill the deficit will save 12 trillion Dinars,” Ali Saadun, a member of Iraqi Parliament’s Finance Committee told Iraqi state media on Sunday.

The MP also emphasized that their committee is in constant meetings with Prime Minister Mustafa al-Kadhimi. “He has suggested multiple possible ways to improve the economic situation in Iraq,” Saadun said.

“The price of the dollar will remain stable at around 147,000 Dinar per $100,” Patriotic Union of Kurdistan (PUK) MP and member of the finance committee Shirwan Mirza told Rudaw English on Sunday.

Iraqi state media announced on December 19 that the Central Bank would set the dollar at 1,470 IQD for the public.

The devaluation of the Iraqi dinar is a step towards reform and creating a “financial balance” that will revive the economy, Iraq’s Minister of Finance said at the time.

Influential Shiite cleric Muqtada al-Sadr voiced his skepticism of the measure’s ability to alleviate public suffering.

“The Central Bank and all other banks are prisoners of corruption and corrupters. The government and parliament must seek specialized methods to end this and liberalize it immediately. It is not,” Sadr tweeted on December 19. 

Iraq’s economic woes have worsened since the start of the coronavirus pandemic, which saw oil prices plummet – bad news for Iraq’s highly oil-dependent economy. 

Iraqi demonstrators took to Baghdad’s protest epicentre Tahrir Square on December 21 to air their discontent after the government decision to devalue the country's currency.

The October 2019 protest movement also called for economic reform, with masses of young people demanding better services and an end to unemployment.