************************* Open market operations (to the dollar), a successful tool in maintaining the value of the Iraqi dinar

Thursday, February 19, 2015



Of the most important tools mission and methods used by the Central Bank is the (legal reserve and the discount rate), including open market operations, the descent of the central bank to the market as a seller or buyer of government bonds, but now we see that the central bank did not do this tool fully to prevent inflationary waves through bond put up for sale, as well as to prevent a recession through the purchase of government bonds from individuals, and I see in this is a good way because the bank did not lose anything in the activation of this tool and considered pure tool in terms of cost and maintain monetary stability, and derive its own strength of the force law.



Now that the fluctuation of the value of the dinar against the dollar, it could be this tool (open market operations) are effective in the process of selling the dollar, as crowned dollar selling process exclusively in the central bank, is to buy the dollar by the banking companies and banks, but we find and follow-through that There is a vast difference between the central bank rate and the sale of the dollar in the Iraqi market and banks, we find the dollar, which is sold at the central bank does not exceed (1200danar) per dollar, if we assume that banks and banking companies have bought at this price, they will be bound by the bank to sell the dollar margin very simple to reach individuals at a price not to exceed (1202danar) per dollar.

The central bank sold dollars at the official rate, but we find a significant difference between the official price and the market price, as a sale of the dollar in Alasouk Price (1250danar) for each one dollar, a very large difference between the bank rate and the market price, as reported (125000danar) for each ($ 100), any difference (5000danar).

The reason for this difference, which leads to an imbalance of the Iraqi Alasouk that suffer from a lack of national goods originally, the mafia is rampant corruption in the banking system, which issued the laws are irrelevant to the national economy as well as the lack of control over the government and private banks, including banking companies.

So suggested the central bank what comes ..

1. activation tool on the open market sale of the dollar and the descent of the central bank to market as a seller and a buyer of dollars to be able to maintain the value of the dinar on the one hand and keep the returns from the sale of oil money laundering operations on the other hand.




2. tighten controls on banks and banking companies, by setting strict banking laws on money-laundering operations.




3. give part of the staff with the dollar and the national currency, to enable individuals to cope with inflationary waves caused by the rise of the dollar against the dinar.


http://www.kitabat.com/ar/page/19/02/2015/44954/عمليات-السوق-المفتوحة-للدولار،-الاداة-الناجحة-في-المحافظة-على-قيمة-الدينار-العراقي