Former Parliamentary Finance Committee member Mohammed al-Shabaki said the Iraqi government will need at least two weeks to restructure the budget following the decision to change the US dollar’s exchange rate against the Iraqi dinar.
Al-Shabaki told dinaropinions.com that Iraq’s budget depends mainly on two factors: the dollar exchange rate and the price of oil. He said oil prices remain difficult to predict because of the changing regional situation, particularly tensions surrounding the Strait of Hormuz.
He explained that although budget projections cover three years, Iraq calculates its financial indicators annually because the budget is adjusted each year. He also stressed that changing the dinar’s value against the dollar is a separate decision from the budget itself.
According to Al-Shabaki, a change in the exchange rate forces the government to recalculate the budget using the new rate, which can create a gap between expected revenues and government spending.
He expects the government to need at least two weeks to revise the budget and adjust its financial calculations to reflect the new exchange rate.
