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Iraq Devalues Dinar to Push Economy Forward Ahead of Deficit

IRAQ-DAILY LIFE

Photographer: Ahmad al-Rubaye/AFP/Getty Images

Iraq, which devalued its currency by about 20% against the dollar, said one main reason for the move was to push the economic cycle forward and activate private sector and local production to avoid a severe budget deficit, according to Finance Minister Ali Allawi.

The finance ministry, which controls the reserves from oil sales, will sell its dollars to the country’s central bank at an exchange rate of 1,450 dinar per dollar, which will in turn resell to local banks at 1,460 with a marginal benefit, Allawi said in a televised interview on the state-run Iraqiya channel.