Central Bank, the exchange rate of the dinar / Zia, Rahim Mohsen

Central Bank, the exchange rate of the dinar / Zia, Rahim Mohsen
Thu, 30 May 2013 Time: 14:44

Since the duration and we see Iraqi dinar exchange rate, which declined after it was maintaining a stable exchange rate somewhat, which comes with a big question, what is the reason for the decline in value of the dinar; Is that the reason for this is due to the weakness of economic policies pursued by the Bank Central? Or are there other reasons?

Distal and proximal know the composition of the Iraqi economy, it is the economy yield is working on two contradictory; first axis: that the state's economy is dominated by 80% of GDP, or the so-called generation of national income; addition to his responsibility directly responsible for providing 99% of the cash inflows foreign exchange; and subsequent direct correlation issuance of central bank monetary movement of those flows. The second axis: the market economy, which has the largest in the effectiveness of indirect management of the results of the state's economy, which is reflected in the general budget in government expenditures, which represent 60% of total government spending. And يؤشره freed for this market flows emerging from the country of foreign exchange, and the desire of the market in the possession of the accumulated foreign currency reserves of the Central Bank, which represents a cover for those rights.

When is dominated by the free market on the course of events in the economy, and the launch of liberty in the process of foreign exchange in addition to the use of open-door policy in foreign trade to the private sector, and with the lack of vision for the strategic growth and development and the advancement of economic reality, the economy is turning into a bilateral severe rentier in the supply of foreign currency to foreign trade and import trade finance consumer nature, which makes the Iraq incubator for consumption and export to the economies of other countries.


The work of the Iraqi Central Bank to grab the stick from the middle to achieve a balance between Tnaqdan namely: the state's economy and keep pace with the economy rent, and the other to keep up with the free market; serving the marketing activity of procedure and the movement of funds towards the outside regardless of the results envisaged to build an economic model generates traffic flows inside and outside foreign currency Aside from these bilateral or extreme polarization between different economies (the state's economy and market economy), and the inflows of foreign currency provided by the state economy, and other foreign currency out of the gasping behind the private sector.


Against all this, what was the reaction of the monetary authority of the Central Bank of Iraq?

I March CBI policy intervention in the exchange market to reach a stable level of the exchange rate, "which noted the citizen throughout the period in which Mr. Shabibi Governor of the Central Bank," so that managed the monetary authority to maintain a stable level of prices, fell inflation levels are ranked ten-to ranked decimal per Add to that the rise in central bank reserves of foreign exchange to the ranked ten-dollar terms, "the highest in the history of the country," However, the central bank could not resolve the battle between the market economy and looked forward to a profit, and between the state's economy and the fact that uniqueness in an attempt to search for profit social; They look lacking economic vision for the movement of Iraqi economic system.

Which made the Iraqi economy lost in an attempt to find effective solutions, which resulted in a deterioration in the exchange rate of the Iraqi dinar, the trend towards economic freedom, and swap foreign currency rights maintained Dinars for the purpose of achieving economic stability, the imposition of a burden on the monetary policy of the Central Bank to interfere with daily to sell the dollar in an attempt to maintain the stability of the exchange rate of the Iraqi dinar against the rest of foreign currency, which needs to be bold decision illustrates the general lines of the economy; As for moving to an open door policy with bear all the consequences as a result of attrition happening in oil revenues to ensure the well-being of the individual and stability "in the absence of a clear development policy in the rest of the productive sectors," which is determined by the political leadership in the country and entered the Central Bank which due to incomplete landmarks economic system of the country after a lot of talk about the transfer of $ 180 billion between 2003 and 2012, generated by the economy of the state after spending for the same period via Almoisant public the amount of $ 450 billion, remained there for Development Economics absent for lack of a climate attractive for investment and unresolved economic vision for this contradiction, and release mechanisms of the free market as you want it to emerging economic powers after the year 2003, the results of economic stability will continue vague and will make the country to live with the parallel exchange markets turmoil to an unknown term in the results, and perhaps will be consequences in the stability of prices and the standard of living and a painful daily concerns in the economic life of the Iraqi families and the general economic activity.

We hope that the monetary authority will reconsider its foreign exchange system.

And determine the value of parity in foreign currencies through the adoption of economic policy integrated with specific goals, and thereby to reduce inflation and to approach the equilibrium state of economic macro-level, which works to contribute to improved economic stability National, and contribute to addressing the deficit in the balance of payments.


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