MP says Iraq faces a 'fundamental problem'

Iraqi parliamentarian attributes dollar rate decline to seasonal factors

BAGHDAD, December 26 — A member of Iraq’s Parliamentary Finance Committee says a seasonal drop in demand for U.S. dollars is the reason behind a decline in the exchange rate as commercial and financial transactions come to a year-end close.

Coupled with festive celebrations and a spike in travel, MP Jamal Kujer told Al-Araby Al-Jadeed, “The decline is not guaranteed and is due to reasons related to the decrease in demand for commercial transactions and financial exchanges, as countries celebrate the New Year.”

“The Iraqi financial market is dominated by groups of speculators who determine prices according to the nature of their work in the market,” he added,  emphasizing that government regulators have been unsuccessful in stemming the role that speculators play in the financial market.

Kujer asserted that the country faces a “fundamental problem” in its economic and financial structure due to heavy reliance on oil exports. That reliance is further exacerbated by the need for U.S. dollars to cover expenses, including imports, in the absense of adequate domestic production, he said.