DEPARTURE OF the CENTRAL CURRENCY AUCTION gradually & resort to «float the doll
News of the departure of the central currency auction «gradually» .. and resort to «float the dollar»
Sunday-8 Nov 2015 No. 1373
Baghdad, Mustafa Mohammed
spin in the corridors of the joints of the government's talk of asylum authorities to "float the dollar," to overcome the financial crisis in the country, after the "failure" to ask international financial bonds and the application of a new salary scale, provides 3 trillion dinars to the state treasury.
Insiders say, close from political circles, that the Council of Ministers may ask the Central Bank "soon" to leave the currency auction and resorting to "float the dollar"; because according to sources provides state what it called "significant returns Dinareh", to feed the state treasury, the dollar exchange rate.
and sells government Next US dollar from oil revenues, the central bank in exchange for the Iraqi dinar that you use in public spending, such as salaries, etc., and if the price of the Iraqi dinar dropped against the US dollar, the government will be the first to benefit.
But the appearance of Mohammed Saleh Economic Adviser to the Prime Minister, between "the world" that such a decision does not need a government directive, it is from the central bank the power, directly responsible for monetary policy in the country.
And founded the Iraqi Central Bank independent bank under the law issued on the sixth of March 2004, as an independent body, which is responsible for maintaining the stability of the Price and implementation of monetary policy, including exchange rate policies. Bank being daily for the sale and purchase of foreign currencies sessions except public holidays.
It seems that the benefit of not in favor of "floating"; it suggests "broadening the tax base" out of the crisis.
There are more than 40 percent of Iraqis covered by the tax, they are still evading paid.
She close to the decision-making sources in an interview to the correspondent of "the world", said the government may ask the central bank will soon stop selling the dollar through auction public .. gradually, in preparation for the floating exchange rate entirely, "adding that" the aim is to allow the dollar to rise to the extent that generate returns Dinareh more on the public treasury, to face the consequences of failure in the implementation of a new ladder of salaries.
"experiencing global oil prices since the middle of last year continuous decline, because of the use by some countries to increase Marodha against the lack of demand for it, what the cause of a severe financial crisis in Iraq , whose economy depends on crude proceeds.
The cabinet in the thirteenth of last month's decision to amend the salary scale for state employees, which included significant reductions in most of the workers in government departments allocations.
obligatory decision in a timely manner severe reject by many of the staff, who went out wide demonstrations in Baghdad and the provinces, to demand its cancellation and considered "unfair".
also saw demonstrations of green to the staff of the three presidencies of all the region denounced corruption and "counterfeit reforms" adopted by the government. And called on the religious authority, on October 23 last, to study the new salary scale again by the owners of expertise and competence to ensure justice for all.
It is Adviser to the Prime Minister for Economic Affairs appearance of Mohammed Saleh said at the time, that the new salary scale provides three trillion dinars. In the wake of that, the government acquiesced in the November 3 current, popular pressure, declared the Information Office of the Prime Minister Haider al-Abadi, said the new salary scale decision did not cover state employees allocations, noting that the decision was a special salary exclusively.
As Finance Minister, Hoshyar Zebari, such as call Move two days later that the reduction in staff allocations provided 1.3 trillion dinars. The new prime minister Haider al-Abadi, a week ago, his warnings of the financial situation in the country as a result of the current financial crisis caused by the decline in oil prices and the war against al "Daash" that drain big money from the budget. Banking sources said, in 9 of last September, the government will start a campaign promoting international bonds being issued for the first time in nine years; where the government is seeking to cover the shortfall in their budgets, because of falling oil prices and the war against "Daash."
The yield on the Iraqi dollar bonds 10.37% , due in 2028, while up in Iraq's neighboring countries to less than 2% according to the private borrowing from the international market data. Prior to the bond offering, Iraq received a negative credit rating of my organization, "Standard & Poor's" and "Fitch", based in the United States, where They noted the existence of credit risk.
Because results are encouraging and "expensive" that the cost of such bonds Ministry of Finance announced , on October 12 last, stop the release plan.
Fadel said the Prophet and the undersecretary of the ministry, said that "Iraq suspended its plans to issue international bonds because the yield to be paid will be very high."
He gave no further details and it was unclear whether it was possible to revive the plan future.
It attributed the Finance Committee in the House of Representatives by Majida al-Tamimi, the government's decision not to prejudice allocations of staff as "a response to the reference to calls and staff after they had intended to reduction of the nominal salary and allowances of the employees covered."
considers al-Tamimi told the "world" on Saturday, said the trend about employees' salaries to provide additional sums of money "represents a Trqieia; it is necessary that the government is working to pressure the expenses of ministries and feminine petty Minister and Aivadathm." He revealed politicians and former government officials for petty cash that ministers and senior officials in the government exceed 2 trillion dinars, including rental and restoration of homes and furnished, and open invoices phones, as well as the ongoing Alaivadat throughout the year. Tamimi and indicate that "the members of the House of Representatives' salaries were reduced, since three months, from 12 million to 6 million dinars." Tamimi asserts that the "floating dollar" had been proposed by specialists on the central bank and the government, but up to now there is no direction to adopt that process.
Expects the sources to rise the dollar exchange rate with flotation to 1,500 Iraqi dinars for every one dollar . There are three ways to deal with the central banks of hard currency; the first is made up of "limiting factor" to be adopted by the CBI, which includes a fixed exchange rate to the dollar, and inject dollars into the market to maintain the stability of this price. The second method is called "float", and thumb the market is controlled exchange rate, while the third method includes a "floating orbit", or unrestricted determine the specific price of the dollar, and another represents a maximum him, to let the currency float between these two prices. The Haitham al-Jubouri, a member of the Finance Committee in the House of Representatives suggested in a statement to "the world", the adoption of "unrestricted flotation" in the currency auction instead of "limiting factor", adding that his committee suggested the central bank and the government to adopt this way "being the best, and certified In most countries of the world.
"In the opinion on behalf of Jamil Anton, an economist, said in an interview to the correspondent of" the world ", said the adoption of" floating dollar "in the current situation which is going through the country, rather than" limiting factor "in place by the Central Bank," will solve the problem of lack of financial liquidity that the government experiencing now, "persisting but that" will not last long ", because it would cause economic problems cast a shadow over all market activities, which suffer a deterioration in infrastructure.
explains Anton, he was at the forefront of these problems," drop value of the dinar against other currencies, as well as the decline in the value of savings of citizens, compared with a rise of imported goods and prices of goods ", which leads to the result to" a large and chronic increase in inflation.
"Anton adds that the survival of the Iraqi economy dependent on imports, not production, makes it float Currency in any way "is not true", it also "There is no government control on the doors of exchange; it is still corrupt deals swallow up the bulk of the budgets."
So asserts Anton, who is close to government decision-making sources, that "the adoption of the flotation process the government is not on the table now, "calling on government bodies responsible and the central bank to expand economic revenue base, to get out of the financial crisis experienced by Iraq.