##### Economists Divided Over Deletion Of Zeros on Iraqi Dinar

October 1, 2013


The Central Bank of Iraq (CBI) has been attempting to delete three zeros from the Iraqi currency since 2003. This project has raised many concerns among the Iraqi public and within the business community, and Iraqi economists are divided.

While some support the project and consider it a chance to decrease inflation and unemployment, others warn of economic shocks that may prevail over the Iraqi market as a result of the project’s implementation.

Following amendments made by the CBI, implementation of the project has been postponed several times.

 This is because of fears that are mostly related to the lack of security, the presence of a market open to foreign commodities without any restrictions, the prevalence of counterfeit money in the market and rampant corruption in the country.

The independent Iraqi News Agency (INA) quoted Abdul Hussein al-Yasiri, a member of the Iraqi parliamentary Finance Committee, as saying that 2014 will witness the deletion of zeros from the Iraqi currency.

He noted that the deletion will occur in coordination with the CBI, and that as a result of the project, the number of banknotes in circulation will be reduced from 4 billion to 1 billion.

Haider al-Abadi, the head of the Iraqi parliamentary Finance Committee, told Al-Monitor that while deleting zeros from the current currency is possible, this has been postponed until after parliamentary elections.

 He noted that studies are being carried out to ensure that, following the currency change, counterfeiting is limited and that Iraqis don’t go back to trading in the old currency.

The step to delete zeros from the currency has been postponed several times, leading the parliamentary Economic Committee to demand that the CBI accelerate this project, as Al-Sharqiya reported.


In a news conference held July 6, the Economic Committee confirmed that the deletion of zeros will lead to an increase in the value of the Iraqi dinar and will have positive repercussions, including a reduction in unemployment and poverty rates in the country.

Nafee Elias, a financial advisor at the North Bank, told Al-Monitor that the step to delete zeros is merely an administrative process, and the currency equation should remain the same. This means that the purchasing power of the new currency should be equal to that of the old currency. 

He added that the two currencies should both remain in the market for a period not exceeding three years, then the old currency should be gradually withdrawn. 

Elias expected problems to arise if debtor-creditor transactions are not set according to the new currency, or there are defects in withdrawal or payment transactions.

 He added that it is unlikely the change will affect inflation or poverty rates.

Ahmed Faizullah, deputy head of the parliamentary Finance Committee, agreed with Elias. Speaking to Al-Monitor, he noted that the deletion of zeros will not affect the Iraqi dinar’s purchasing power, because the latter is linked to the size of industrial production and imports. 

He added that the CBI’s hard currency reserves have saved the Iraqi dinar and served as a cover for it. Faizullah called for not applying the project at the moment, because it will confuse Iraqis and disrupt the market.

(note, this has been taken care of and will not be a problem)
"Amid these views, Enas Mohamed, deputy director at Naseem Al Shemal Brokerage Company, told Al-Monitor that the stock market will be harmed the most by a change of currency and the deletion of zeros"

The price of a share is one dinar, so currently 1,000 dinars are equal to 1,000 shares. Following the deletion of zeros, the new dinar will be equal to 1,000 shares, which would further confuse the stock market, which is already muddled as a result of the security situation.



http://www.al-monitor.com/pulse/originals/2013/10/dinar-currency-iraq-plans.html#ixzz2gVxkOfRf

This is the same article as above



New Iraqi currency .. Soon




CBI seeks to delete three zeros from the Iraqi currency since 2003. A project that raises many concerns on the street level and the business community of Iraq, and it seems economists are divided between supporters of the project see it as an opportunity to reduce the rates of inflation and unemployment, among forewarned of economic shocks may prevail Iraqi market due to implementation of this project.



The delayed implementation of the project yet to enter the central bank, as amended, most of the time because of fears predominantly based on the uncontrolled security situation and the open market to foreign goods without restrictions and counterfeit currency circulating in the market in addition to the rampant corruption in the country.

And was independent Iraqi news agency quoted a member of the Finance Committee in Parliament Abdul Hussein al-Yasiri on the fourth of September / past as saying that the year 2014 will see the deletion of zeros from the Iraqi currency, to be done in coordination with the Central Bank. The Yasiri explained that this project will lead to reducing the size of the national currency in circulation than four billion Iraqi dinars to one billion.

For his part, the head of the Finance Committee in the House of Representatives Haider al-Abadi for "Almonetor" It is possible to delete the zeros from the current currency, but it has been postponed until after the parliamentary elections, pointing out that studies are now safeguards are in place to reduce fraud, and making sure not trading again in the current currency.

The process of deleting the zeros had been postponed more than once, until called on the Economic Committee in the House of Representatives, according to reported channel "Oriental" on the seventh of July last year from the central bank, accelerate the process of deletion of zeros from the Iraqi currency is tight in a press conference held on the the process of deleting the zeros will increase the value of the Iraqi dinar and will be reflected positively on the issue of reducing the rate of unemployment and poverty in the country.

But financial advisor in the "Bank of the North," Nafie Elias said in an interview to "Almonetor" The process of deletion of zeros is an administrative process only, and the equation cash to be kept as it is, ie that the purchasing power of the new currency should be equal to the currency old. Elias said he must التدوال two currencies both for a period of up to three years old to withdraw gradually from the market. Elias predicted that highlights the unresolved problems if the creditor and the debtor or if they hit any defect in payments and withdrawals. But he ruled that affect the rates of inflation or poverty.

For his part, the Vice-Chairman of the Finance Committee in the Iraqi parliament Ahmed Faizullah for "Almonetor" What went him wholesome Elias, pointing out that the deletion of zeros will not change the purchasing power of the Iraqi dinar because it is linked to the size of the industrial production and import. He added that what saved the Iraqi dinar is owning the central bank cash reserve of hard currency Osafth the cover have formed the dinar. Faizullah called to the lack of implementation of the project at this time because it would disrupt the market and Iraqi citizens alike.

Amid the views Director noted the High for "North breeze Company" to trade stocks Inas Mohamed said in an interview to "Almonetor", that the stock market will be more affected by changing the currency and delete the zeros. Stock still sold in dinars, and a thousand dinars is worth a thousand shares, while one will become the new dinar after the deletion of zeros is equal to A shares, which would disrupt the stock market where the confused movement in the base because of the security situation in the country.

* Golden safe and media researcher in the field of political economy and trainer in the field of oil and energy journalism. She holds a Ph.D. in "American policy of containment."


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