The reasons for the deterioration of the value of Iraqi dinar

2012-05-19 11:49:30


BAGHDAD (Iba) exposed the Iraqi dinar since a few months due to the crisis of political reasons, and other related international sanctions imposed on Iraq's neighbors, Syria and Iran.

According to economists, during the past few weeks the price of the Iraqi dinar exchange in the domestic market against the U.S. dollar from less than 1200 dinars to 1280, and arrived at certain times to 1300, which means that the dinar fell by about 9% against the dollar.

Economic expert on behalf of Anton attribute this decline to increased demand for the dollar, by virtue of the political conditions in the region, in general. Indicates Anton said in an interview with talk that the smuggling of large place of the dollar abroad during the past months, which led to rising demand for U.S. currency.

Officials at the central bank that the bank was selling a day worth $ 160 million, before the withdrawal of U.S. troops from the country late last year, but demand is rising remarkably in the recent period and arrived in a few days to $ 400 million. Analysts say the reasons why the merchant and the citizen simple request to the dollar in this period, many, including the political crisis experienced by the country after the U.S. withdrawal and lack of confidence with the growing local economy. Map analysis, but it expands with the events of the spring linked to the Arab and Western sanctions on Iraq's neighbors, Iran and Syria.

Iraqi Planning Minister and former chief economist veteran Mahdi Al-Hafiz says that both Iran and Syria, living a suffocating economic crisis because of international sanctions imposed on them what pushed them to the attack on the Iraqi market for hard currency. Says the former minister that the overlap of economic and political of the two countries with Iraq, allowed them to get a dollar of it, pointing out that large quantities smuggled to them and that the continuation of this will reflect negatively on the local currency.

Iran is suffering a blockade imposed by the international hamper export its oil to world markets because of doubts about its nuclear program. Asttalt series with the financial and economic sanctions on Syria since the outbreak of protests in mid-March last year, and the feet of the regime of Bashar Assad strongly suppressed.

Central Bank of Iraq in an attempt to curb the smuggling of dollar issued in the past three months a series of measures including an emphasis on monitoring the conversion factors of large and regular to the dollar. Called the Central all banks and banking companies to provide official documents about transactions to convert U.S. dollar, and the closure of shops banking is licensed, according to Vice President appearance of the central bank's favor.

Recognizes the existence of an imbalance in favor of the dinar exchange rate, but he denies saying Ptdhorh. He says the dinar against the dollar fell naturally in the presence of two neighbors, namely Iran and Syria were subjected to a major economic crisis.

He adds that the open-door policy and the freedom of foreign exchange and the relative stability of Iraq in the economic field are all factors that help to smuggle the currency. Precautionary measures to restrict the movement of large sums abroad revealed According to Vice-President of the Central Bank that the majority of big customers were not prepared for such changes.

He says surprising: Some come to the bank to transfer to another state in his hand, millions of dollars, but he does not have a bank account. In addition to problems with neighbors and the sanctions imposed on them, experts attribute others weak dinar to the internal crisis between the poles of politics and eagerness of the government of Nouri al-Maliki to impose its influence on the bank Central.


The Federal Court has interpreted the Iraq early last year affiliation of independent bodies to the Prime Minister contrary to the provisions of the Constitution, which was considered independent bodies such as the Central Electoral Commission, an infringement on their independence.


Says Vice President of the Finance Committee in the Iraqi parliament, Ahmed Osman Faizullah from the Kurdistan Alliance said the government's attempt to control the Central Bank and annexed to the Council of Ministers is dangerous and undermines confidence in the economy of the local currency.

He adds that the central bank continued to Parliament under the Constitution, but the prime minister is trying to control him and other independent bodies, and indicates that the government is seeking for years for the use of Iraqi cash reserve of 60 billion.

And previously directed the Iraqi List, similar accusations against the prime minister, that he seeks to control the monetary and fiscal policy.

The spokeswoman said the Iraqi List, Maysoon al in a press release mid-last month: The Prime Minister wants to authoritarianism on the central bank to control the issuance of currency to finance wasteful government on the one hand, and to support the economies of two adjacent subjected to the economic blockade on the other hand, in reference to Syria and Iran.

These interactions lead, according to political observers to the loss of confidence in national currency and the continued demand people to replace them, so that many of the staff remit part of their salaries to the dollar. (End)


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