Many experts were discussing this issue for last two weeks that Iraq will have to devalue its currency to deal with IMF in its next meeting. It was expected that IMF will ask finance ministry of Iraq to devalue Iraqi dinar for next installment in the loan.
IMF is allowing soft loans to Iraq to rebuild the country and its infrastructure. Contrary to all these expectations, the IMF Iraq Mission Chief announced that Iraq need not to devalue its currency to get loan from IMF. He said the recent situation does not allow Iraq to further devalue its currency in international market. Iraqi Dinar is already facing the worst level of currency value in its history.
The mission chief said Iraq is one of the top oil producers in the international market for years. The main source of revenue of Iraq is export of crude oil in the world market. If the country devalues its currency in the international market, a flood of inflation will occur in the economy of Iraq. Iraq is already facing a huge inflation problem for years and devaluation will destroy the country economy to its extreme level. Iraq is the importer of almost all consumable goods from international market like wheat, rice, fruits etc.
Devaluation of currency in this situation will directly impact the life of a common man in Iraq. It will make their life harder and complicated. IMF has also invited other major institutes of the world to take part in the rebuilding of Iraq. Al Anbar is the province that is badly affected by the terrorist attacks. The city is under the control of Iraq force but it is ruined completely. The infrastructure is badly affected by recent fights between Iraq security forces and militants. Iraq only produces some vegetables and fruits along with some cash crops on limited scope in Kurdistan.
The production of such goods is not enough to meet the needs of the whole nation. This is why; the country has to import almost every thing from international market to meet the needs of its people. The country just exports the oil and gas in the international market and everything else is imported from surrounding countries. Iraq is focusing on the production of agricultural products to meet the need of its people but in the recent security situations, it is so difficult to do something on wider scale.
The parliament finance committee has suggested supporting Erbil and some other cities of Kurdistan near river to enhance its agricultural products in the country. Report says Kurdistan will be provided with finance in next budget to raise crops in the region to support its country needs.