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Abu Dhabi, UAEMonday 8 March 2021

Iraq's MPs call for emergency session over currency devaluation

Public protests erupt against government decision

An Iraqi protester carries a placard denouncing the devaluation of the country's currency during a demonstration at Tahrir Square in central Baghdad, Iraq, on December 21, 2020. EPA
An Iraqi protester carries a placard denouncing the devaluation of the country's currency during a demonstration at Tahrir Square in central Baghdad, Iraq, on December 21, 2020. EPA

Iraq's parliament called an emergency session on Tuesday to discuss the latest implications of the currency devaluation as protests against the decision broke out across the country .

The move was intended to close the gap in the 2021 budget inflation after a collapse in global oil prices, which is a major source of the country’s financial resources.

“We are pushing for the session to take place because there is great concern the decision will mean a rise in the price of goods, which will have a huge impact on middle and lower classes,” Jaber Al Jaberi, a member of parliament, told The National.

The exchange rate ranged from 1,200 to 1,240 dinars against the dollar before the announcement was made – that rate will soon hit 1,400 dinars.

The parliamentary session, which is expected to take place on Wednesday, will call for debate Prime Minister Mustafa Al Kadhimi, Finance Minister Ali Allawi and Mustafa Al Ghaleb, the governor of the central bank of Iraq.

“We want to discuss reasons for lowering the exchange rate, how the new financial policy will be implemented and failures in the government's performance,” according to a statement signed by the MPs and seen by The National said.

“We want to ensure that the government takes direct responsibility for failing to save the economy from collapsing and entering a dark tunnel,” said the statement put forward by

deputy parliament speaker Hassan Al Kaabi and signed by more than 80 members of parliament.

Ala Talabani, an MP, said she was one of the first to push for the request because of her “parliamentary responsibility towards the poor, vulnerable and households of low income”.

Angry protesters stormed the streets of Baghdad and other southern cities demanding the government change tack on its decision.

Protesters are furious at the first devaluation in half a decade.

"The government should collapse before the dinar," read a sign held by a young protester in Baghdad.

Iraqi security forces and anti-riot police were stationed over the weekend near central bank headquarters, state banks and other financial offices in Baghdad.

Hundreds of people took to the streets of Kut, a city in the east close to the border with Iran, where businessmen said imports would be hit because they used dollars to buy goods from outside.

Mr Al Galeb said that the central bank agreed to the devaluation on the condition reforms are carried out in the finance ministry.

The draft 2021 budget includes plans for an income tax, lower tariffs on electricity and other ways to try to cut spending, in addition to the devaluation.

Nationwide protests erupted last year against the government's inability to provide adequate public services and employment opportunities.

It resulted in the killing, arrests and forced disappearances of hundreds of people whose families are still waiting for news of their fate.

Since the start of the protest movement, demonstrators say they will not leave the streets until their demands are met. These include the establishment of a new government independent from foreign influence, government institutions that are funded internally and implement just laws, accountability for criminal acts within government and the end of foreign militias in Iraq.

Updated: December 22, 2020 06:27 PM


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