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Will Iraq's new government reconsider dinar exchange rate?

A number of leaders of the Coordination Framework, the bloc leading the new Iraqi government, are pushing to increase the value of the dinar in an attempt to support the poor — yet some argue the measure could backfire.
The new Iraqi dinar banknotes are shown ready for distribution at the Bank of Baghdad, as the currency is introduced for the first time, Iraq, Oct. 15, 2003.

BAGHDAD — Prominent Iraqi politician and former Prime Minister Nouri al-Maliki called on the government of Mohammed Shia al-Sudani to increase the exchange rate of the Iraqi dinar against the US dollar by 5.5% in the coming days, amid warnings by economists that such a move could spiral the economy into recession.

The previous government, headed by Mustafa al-Kadhimi, had launched a financial and fiscal reform plan known as the White Paper, mainly aimed at restoring balance to the economy, reducing the public sector and investing financial resources in improving public services and developing productive sectors. The White Paper confirmed that the previous exchange rate was detrimental to the agricultural and industrial sectors.

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