************** Determined by the value of the dinar monetary policy

9/22/2014 0:00

Questions about the reasons for their persistence despite the increase in oil production
BAGHDAD Mustafa al-Hashemi

Iraq has seen in the last ten years a rise in the production and export of oil at a time which saw the value of the dinar remarkable stability without the high mention in purchasing power, at a time when citizens consider that the rapid increases in oil production ensures practically greatly enhanced the Ddinraly over the coming years, but it is surprising that this is not decided yet.

And is looking forward to the Iraqi individual reflections on the positive direct their standard of living through these steady increases in production and exports, but there are some things about the concealed memories illustrated by an economist appearance of Mohammed Saleh saying: that this issue for monetary policy in Iraq.

Saleh explained in a statement (morning) that the first phase of monetary policy was to eliminate inflationary expectations, stressing that the nominal exchange rate is less than the real exchange rate due to a surplus in the current account in the balance of payments, noting that all the process of the surplus should be offset by an improvement in the exchange rate of foreign currency.

I've added However, the central bank this point because he believed that the surplus came to GDP including representing 8 to 18 percent over the previous years, he noted, and on this basis, the reform program adopted by the Central his agreement with the Paris Club and the International Monetary Fund after 2005 in what respect to the stability of the currency and reduce inflation through what is called the installer nominal expectations Altdkhmah.utaba: on this basis, began to monetary policy, raising the value of the dinar gradually through direct intervention in the market where able to raise the exchange rate of the dinar and reduce the value of the dollar from 1450 to 1166 dinars to the dollar.

Saleh said that during this period, stability, prices fell from two places decimal places (which is considered dangerous and rampant inflation) to the rank of one decimal place as that was a major achievement for the economy This period also witnessed an amendment in the standard of living to double the wages and salaries of government, where he was with the improved exchange rate doubled salaries.

He said that if he continued to improve the exchange rate with the salary increase Fsnsal to the stage is not commensurate with the productivity of the economy, and therefore should be placed balancing this equation by increasing production to achieve the increase in incomes, stressing that the most successful monetary policy is to maintain the stability of the exchange rate provided increased productivity .


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