BAGHDAD, Dec 20 (NNN-NINA) – Iraqi Prime Minister, Mustafa al-Kadhimi, warned of the collapse of social and political systems in Iraq, and overwhelming chaos, if the country does not go through financial reform.
Al-Kadhimi made his comments during an extraordinary session of the Iraqi cabinet, to discuss the federal budget for the fiscal year 2021, which came after the Central Bank of Iraq (CBI) decided to devalue the national currency, due to the economic crisis that resulted from the decline in oil prices.
“The political crisis in Iraq is linked to three issues: power, money, and corruption. We are working to address the crisis from an economic standpoint and with a bold decision to overcome the obstacles of corruption and money,” al-Kadhimi media office said.
Earlier, CBI decided to reduce value of the Iraqi dinar to 1,450 dinars per one U.S. dollar in the central bank, instead of its previous price of 1,119 dinars per dollar.
CBI attributed the decision to the financial crisis that resulted from the decline in oil prices and the pandemic, which led to a large deficit in the state budget, forcing the government to borrow money from banks, to pay salaries and to cover other expenses.
In a separate statement, Iraqi Minister of Finance, Ali Abdul-Amir Allawi said, “It became clear that urgent reforms are needed in various economic fields, including the currency exchange rate.”
“Despite the difficulty of this decision, we are forced to take such a step, to address a large part of the crisis, and to ensure protection of the Iraqi economy by achieving a brave reform step,” Allawi added.
