SULAIMANI (ESTA) — The exchange rate of the Iraqi dinar is set at 1,470 dinars per dollar, the Iraqi Central Bank said on Sunday.
The Central Bank of Iraq said in a statement that it had set the value of one dollar at 1,460 Iraqi dinars for the banks, while it would be 1,470 dinars per dollar for people.
Already, the value of the dinar is falling on the street, with exchange houses in Sulaimani selling the dollar for 1,380 Iraqi dinars.
Discussions about devaluating the Iraqi dinar, which has been pegged to the dollar for decades, have been going on for weeks as the government worked to finalize the 2021 budget.
The draft law, which has to go through a parliament vote first, gives an anticipated exchange rate of 1,450 Iraqi dinars for the dollar — a significant drop from the central bank’s current official rate of approximately 1,182 dinars for $1.
The government plans to cover its deficit in the draft federal budget law for 2021, which is estimated at 58 trillion dinars ($48.698 billion).
Income is set at 92 trillion dinars, with oil revenue standing at 73 trillion. The price of a barrel is set at $42.
As the draft made rounds on social media, the Finance Ministry expressed “resentment and deep regret over the unauthorized publication” of the proposed law, saying public hysteria would impact the neutrality of the legislators. The parliament is to discuss — and introduce possible amendments — to the draft in a session scheduled for Saturday.
In an October interview, Finance Minister Ali Allawi said the devaluation was being considered seriously in talks with the International Monetary Fund.
The IMF has proposed a rate of 1,600 dinars to the dollar, which the Iraqi government deemed “politically difficult”, AP cited a senior-level official as saying.
