25 Jul 2014 01:29 PM PDT KT News: The Kurdistan Regional Government (KRG) is considering paying public sector salaries for the month of June in US dollars rather than Iraqi dinars. IraqiNews.com quotes a KRG source as saying: “the reason for the replacement process in the distribution of salaries is due to a lack of cash of the Iraqi currency in the region because of the financial crisis and the non-payment of its budget planned by the federal government …” Oil revenues will be paid to the KRG in US dollars and the central government is restricting the supply of Iraqi dinars (there is little left in the Kurdistan Region’s banks).
It is uncertain whether 1.4 million Kurdish civil servants would lose or gain from this and whether it would benefit the economy generally.
Public sectors employees are regularly being paid late due to the budget crisis – they received their May salaries yesterday and the payment for June is expected to be made after the Eid holiday.
A decision to pay them in dollars could be seen as another step towards the Kurdistan Region’s separation from Iraq – although, in a separate development, the Baghdad parliament today voted for Kurdish candidate Fuad Ma’sum as Iraq’s new president.