Sometimes the world countries attempt to decrease the value of
their national currency, to return the balance of trade.
Reducing the price of the currency is exchanging the formal price
opposite another. in a way increasing some points of the national currency
opposite the foreign currency, for instance, already in the Iraqi central bank
the price of (100) $ was (119,000) Iraqi Dinar (IQD), now (100) sells to
(147,000) (IQD). So, the (IQD) lost its values roughly (25%).
Decreasing the value of a national currency due to
the return of
the trade balance and reducing the deficit of budget is a proper pace. This
policy helps to reduce the pressures on the foreign currency in the central
bank; it is one of the Iraqi government and central bank justification,
presently, the foreign currency in the central bank about (70) billion dollars.
Declining the value of national currency causes to raise the price
of imported goods and raise the desire for local productions, however, (90%) of
the Iraqi commodities import from outside.
If the step got successful, the importing productions will be
decreased; the sums that went out previously reduce and circulate locally. If
the government couldn’t do the economic situation got worst. Few countries do
that for the sake of encouraging national production, growing economy and make
a hindrance to jobless through job vacancy.
A two-sided weapon, sometimes decreasing the worth of national
currency has negative impacts. It may destroy the economy of the country or
inflation hits the top such as flying the price of electricity and the imported
instruments and requirements. At that time Iraq cannot develop its economy
because it sends nearly (48) billion dollars outside to purchase goods yearly.
The influences on the employees
In reality, around (6) million people live on the salary, if any
Iraqi family consists of five people, it demonstrates that (70%) of the Iraqi
populations live on salary. Thus, this decision harms their livelihoods. If the
monthly food will not provide by the government the poverty will increase which
is (23.5%) at that time.
Finally, due to the political, economic, security and street anger
instability. It depicts that this step has made to increase the amount of (IQD)
and nothing else. Moreover, the Iraqi financial policy changes in (2021), the
employee’s salary will decrease, this pace will not unify with the deflation in
the market, once again the salary takers and poor classes pay the price.
The content of this article explores the view of author