The project is important to increase the power of the dinar and the money supply to reduce the enormous

08/03/2012 08/03/2012

Why after the lifting of zeros?

BAGHDAD - Haidar al-Rubaie Filaih

Said an economist that a number of things can be achieved thanks to the deletion of three zeroes from the currency, noting that in the forefront of those positive things to be achieved after the implementation of the project is to increase the control of monetary authorities on the attitudes of the currency in Iraq through the performance of its functions in liquidity management, control and surveillance on the currency National.

And embarked on the government to change the currency in 2004, directed by the central bank to introduce a deletion of three zeros from the Iraqi dinar, a project implementation is expected early next year, according to Deputy Governor of the Central Bank.

In the opinion of the Central Bank to reduce the size of the enormous money supply is the most prominent reasons for the deletion of zeros from the currency, financial experts, underlining the importance of the project to restore balance to the rest of the Iraqi dinar foreign currencies especially the dollar.

Says Associate Dean of the Faculty of Business and Economics, Dr. Falah Hassan Thuwaini (morning): The deletion of zeros from the currency holds above his shoulders justifications positive mission to Iraq, and sees Thuwaini that it will work on the stability of the currency value and the absorption of the surplus that results from high rates of inflation and then reduce the phenomenon of monetary illusion and inflationary expectations.

He added that Thuwaini measures to revive the monetary policy in Iraq could contribute to increased rates of development in the country was then promoted the economic reality in general, and this project means Thuwaini deleting three zeros from the currency.

The estimated money supply issued in the Iraqi street, with 30 trillion dinars to the various groups, while the number of securities traded, according to official statistics of the Central Bank about four trillion paper money is the product of a long period of inflation and Altdhoralaguetsada.

According to the CSO, also, those money supply contributed to raise the index of consumer prices foundation in 1993 from 100 dinars to 200,000 in 2003, and this means that goods and materials that were being sold for 100 dinars became sold for 200,000 dinars, and under this circumstance and the deterioration of the currency value category increased currency at the time the largest of 25 to 25000 dinars, thousand dinars, and this means that inflation is adding those zeros.

And the benefits that can be added to the economic changes and reforms initiated by Iraq, Dr. Thuwaini confirms that the deletion of zeros is important in the link or to join the bloc or economic zone or certain monetary, or be part of a long-term strategy for monetary reform.

Thuwaini and built as well as that of the other benefits to be achieved if the currency change and delete Asfarha is that the new currency will contribute to the national currency for legal force in the performance of its core functions, whether immediate or deferred.

And baptizing the Iraqis to use the dollar in trading wide to prevent the circulation of a huge amount of money in daily transactions, prompting traders and businessmen to use the dollar instead of the local currency in the intellectual projects, strategy and financing of trades is important, as baptizing the merchant to transfer money and receive the dollar exclusively , which is the cradle of the so-called recently (dollarization) in the completion of projects and business deals that took place in Iraq.

And this payment Thuwaini to say that changing the currency and delete zeros contribute to the reduction of the process of dollarization in domestic economic activity, especially with the release of large segments of the local currency, as well as check easily in the process of exchange or convert the currency with other currencies, and in exchanges of capital in the balance payments and budget.

And created the money supply massive Iraqi funds many problems in the final accounts of banks and government departments in general, that the figures the enormous which is not without in many cases, cases of errors and omissions due to the large number of zeros which may be used in those accounts, and sees Thuwaini that the deletion of the zeros from the currency will ease the burden on the banking system and financial in order to reduce the amount of the money supply in the financial market and monetary.

And mayors of the central bank to impose measures restrict the sale of the dollar in daily auction, organized, and designed these measures to curb the growing demand for dollar by the traders and investors to finance their projects, and confirmed by the size of the trend for trading foreign currencies instead of dinar, which was worth at least much for the dollar.