Iraq devalues dinar to ease cash crunch, leaving traders in limbo

The government hopes a weaker dinar will help pay salaries, but traders face rising import costs and uncertainty.

The Iraqi government devalued its currency by nearly 15 percent last week to pay salaries and cover the oil-rich country's revenue shortfalls [AFP]

Baghdad, Iraq – Sitting anxiously in his small office in Jameela market, one of Baghdad’s main wholesale markets, food trader Hamza al-Rudayni is waiting to see what the coming days will bring.

A decision by the Iraqi government to devalue the country’s currency, the dinar, against the US dollar has left traders like him facing sudden losses and uncertainty over the prices they should charge for their goods.

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“I don’t know what to do,” al-Rudayni told Al Jazeera after the devaluation reduced the dollar value of his dinar holdings, leaving him with less money to purchase imported goods.

“All I know is I woke up a few days ago to discover that I had lost 25 million Iraqi dinars (roughly $16,500 at the new exchange rate) because of this decision, while larger merchants lost billions,” he said.

Al-Rudayni entered the wholesale trade market last year after losing his previous job at a private Iraqi bank that he says was sanctioned by the United States Treasury. He sold his car and used his savings to start trading with a larger merchant before recently launching his own business.

With exchange-rate fluctuations making prices unpredictable, al-Rudayni said he and many other traders have chosen to suspend buying and selling until the situation stabilises.

“Market activity has ground to a halt,” al-Rudayni said. “Traders buy goods in dollars but sell them in dinars, as regulations prohibit them from selling in dollars.”

That is the root of the problem for traders: A weaker dinar means they have to pay more in local currency for goods imported in dollars, while making it harder to determine the right price they should charge customers for goods they already have in stock.

On October 7, the Iraqi government introduced a new official exchange rate against the US dollar, in an attempt to ease a financial crisis triggered by the US-Israeli war on Iran and the disruption of oil exports through the Strait of Hormuz.

Before the war, Iraq exported around 3.5 million barrels of oil per day through the Strait of Hormuz, accounting for 90 percent of Iraq’s government revenue.

The Central Bank of Iraq decision set the rate at 1,520 dinars per US dollar for cash sales to the public. It was previously set at 1,320 dinars per dollar.

Devaluing the Iraqi dinar by almost 15 percent against the dollar allows the government to receive more local currency for every dollar of oil revenue it converts, helping it cover public spending, including government employee salaries.

“It is my decision and I am responsible for it,” Iraqi Prime Minister Ali al-Zaidi said during a meeting with parliamentary leaders on Thursday.

“I was facing three challenging options to cover salaries and other mandatory expenditures,” al-Zaidi added. “The first is to cut salaries by 35 percent … the second is to pay the salaries every 45 days … while the third is to resort to foreign loans.”

Al-Zaidi, a former banker, also said that his government had inherited public debt exceeding 208 trillion Iraqi dinars ($139bn at the new rate) when it took office in May. He said the government needed approximately 10 trillion dinars ($6.7bn) each month to cover salaries and other essential expenditure.

A shortage of liquidity

The crisis in the Strait of Hormuz had caused a severe financial squeeze for the Iraqi government.

Although the situation has eased somewhat in recent weeks after Iraq’s oil exports partially recovered, they have yet to return to their pre-war levels.

Mudher Mohammed Salih, the Iraqi prime minister’s financial adviser, said in August that the Central Bank of Iraq’s foreign currency reserves had declined from $106bn to approximately $80bn.

To make up for the loss of revenue, the Iraqi government has also turned to borrowing from domestic banks to cover salaries and other expenses.

A Finance Ministry official told Al Jazeera that ensuring salaries were paid on time remained the government’s main priority, describing this issue as a matter of domestic economic stability.

“Our hands are tied regarding the revenue and how to maintain enough money to ensure that we can pay the salaries,” the official, who asked to remain anonymous because he was not authorised to speak publicly, said.

Economists have warned that while adjusting the exchange rate could ease some immediate fiscal pressures, it would not address the deeper weaknesses in Iraq’s economy.

“Nothing in economics is sacred, including the exchange rate,” said Nabil al-Marsoumi, professor of economics at Al Maaqal University in Basra. “It can be adjusted, but only after all other options have been exhausted.”

“In any case, the exchange rate shouldn’t be used as a cover-up for failures in the state’s economic and fiscal policies,” he added.

政府希望第纳尔贬值有助于支付工资，但贸易商面临着不断上涨的进口成本和不确定性。

伊拉克政府上周将本国货币贬值近 15%，以支付工资并弥补这个石油资源丰富的国家的收入缺口。[法新社]

伊拉克巴格达——食品贸易商哈姆扎·鲁代尼焦急地坐在巴格达主要批发市场之一贾米拉市场的小办公室里，等待着未来几天的发展。

伊拉克政府决定让该国货币第纳尔对美元贬值，这使得像他这样的贸易商面临突如其来的损失，并且对商品定价也感到不确定。

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“我不知道该怎么办，”鲁代尼在货币贬值导致他持有的第纳尔美元价值下降后告诉半岛电视台，这使得他用于购买进口商品的资金减少了。

“我只知道，几天前我醒来后发现，由于这个决定，我损失了 2500 万伊拉克第纳尔（按新汇率约合 16500 美元），而更大的商家则损失了数十亿，”他说。

鲁代尼去年失去了在一家伊拉克私营银行的工作，他称这家银行受到了美国财政部的制裁。之后，他进入了批发贸易市场。他卖掉了自己的车，用积蓄开始与一家大型贸易商合作，直到最近才创办了自己的公司。

由于汇率波动导致价格难以预测，鲁达伊尼表示，他和许多其他交易员已选择暂停买卖，直到局势稳定下来。

“市场活动已经完全停滞，”鲁代尼说。“商贩们用美元购入货物，却用第纳尔出售，因为法规禁止他们用美元进行交易。”

这就是贸易商面临的问题根源：第纳尔贬值意味着他们必须用当地货币支付更多费用来购买以美元进口的商品，同时也让他们更难确定应该向顾客收取多少库存商品的合理价格。

10 月 7 日，伊拉克政府推出了对美元的新官方汇率，试图缓解因美国和以色列对伊朗的战争以及霍尔木兹海峡石油出口中断而引发的金融危机。

战前，伊拉克每天通过霍尔木兹海峡出口约 350 万桶石油，占伊拉克政府收入的 90%。

伊拉克中央银行决定将现金购钞汇率定为1美元兑1520第纳尔，此前的汇率为1美元兑1320第纳尔。

伊拉克第纳尔对美元贬值近 15%，使得政府每兑换一美元石油收入就能获得更多本国货币，从而有助于支付公共支出，包括政府雇员的工资。

“这是我的决定，我对此负责，”伊拉克总理阿里·扎伊迪周四在与议会领导人会晤时表示。

“我当时面临三个棘手的方案来支付工资和其他必要开支，”扎伊迪补充道。“第一个方案是削减35%的工资……第二个方案是每45天发放一次工资……第三个方案是求助于外国贷款。”

曾任银行家的扎伊迪还表示，他的政府在5月份上任时，继承了超过208万亿伊拉克第纳尔（按新汇率约合1390亿美元）的公共债务。他说，政府每月需要大约10万亿第纳尔（约合67亿美元）来支付工资和其他必要开支。

流动性短缺

霍尔木兹海峡危机给伊拉克政府造成了严重的财政困境。

尽管近几周来伊拉克的石油出口有所恢复，局势有所缓和，但尚未恢复到战前水平。

伊拉克总理的财务顾问穆德尔·穆罕默德·萨利赫在8月份表示，伊拉克中央银行的外汇储备已从1060亿美元下降到约800亿美元。

为了弥补收入损失，伊拉克政府也开始向国内银行借款，以支付工资和其他开支。

财政部一位官员告诉半岛电视台，确保按时发放工资仍然是政府的首要任务，并将此问题描述为关乎国内经济稳定的问题。

“我们在收入方面束手无策，不知道如何才能维持足够的资金来支付工资，”这位官员说道。他要求匿名，因为他没有被授权公开讲话。

经济学家警告说，虽然调整汇率可以缓解一些眼前的财政压力，但这并不能解决伊拉克经济更深层次的弱点。

“经济学中没有什么是神圣不可侵犯的，汇率也不例外，”巴士拉阿尔马卡尔大学经济学教授纳比勒·马尔苏米说。“汇率是可以调整的，但前提是所有其他选项都已用尽。”

“无论如何，汇率都不应该被用来掩盖国家经济和财政政策的失败，”他补充道。