Iraq has been working with the International Monetary Fund reform programs

4/12/2016 0:00

BAGHDAD - Imad Emirate
D academic said. Abdul Hussein al-Jalil Ghalibi of the College of Management and Economics at the University of Kufa, Iraq today is working with the International Monetary Fund to adapt the economic reform programs since 2003, including monetary policy, pointing out that the door is open to capital flows, especially in investment and trade.

He noted in an interview Ghalibi »Sabah» that some of the standards to support the process of change and supported by other criteria emphasize the issue of political autonomy guaranteed by the Central Bank of Iraq Law No. 56 of 2004 and its support is clearly in the Iraqi constitution.

He added that changing the currency often Mayati after the high-inflation period followed by a period of stability, and that the rapid movement in the low inflation increases the likelihood of change, especially in a very open countries to international capital flows, which are under the conditioning program of the International Monetary Fund, which owns central banks for political independence, this criterion It includes sub-criteria, including the presence of high inflation quickly sliding into a period of stability, and is happening in countries open to international capital flows, and that the country is under the conditioning program of the international Monetary Fund, and we have to have the political independence of the bank.

He explained that governments have the political and economic reasons for the process of changing the currency, democratic governments are likely to take place to change the currency in response to the high of inflation, governments and authoritarian (dictatorship) can be conducted to change the currency without the presence of higher inflation, particularly in the case of a civil conflict or civil.

He said if the government is characterized by democratic-style, the condition that pushing it toward changing the currency is the existence of inflation and this applies to the situation in Iraq, as the government is working according to the principles of democracy, which approved the Constitution, and that the economy has suffered for a long time has increased on two decades of high inflation problem, and that levels inflation has pushed for increasing the number of zeros of the currency, and hence the currency back to its former position of inflation provoked by the removal of the issue will be acceptable under this standard, but if the government is authoritarian, what is paid to change the currency is the presence of internal and civil conflicts.

He d. Abdul Hussein Ghalibi, and when discussing these four criteria and compare it with the situation in Iraq, we find that the first criterion verified as inflation rates in Iraq during the period 1991.2010 gone through three first stages of 1991.1995 and have a very high rate of inflation had reached the highest value in 1994, and less the value was in 1991 and the longer these years is the beginning of international sanctions into force on Iraq and the monetary authority began printing banknotes at the CBI presses in (House Mesopotamia for printing) and quantities flooded the markets dinars a paper and printing bad, where printed thirteen Asdarih.

He continued, and the second term is 1996.2002 and the inflation for the previous period decreased thanks to the oil for food and medicine, which allows Iraq to export oil to cover the expenses of the Convention, and contributed to the implementation of this agreement this fall, and the third period was 2003.2010 and it began serious policies of the central bank in dealing with inflation where the first part of which lasted from 2003 to 2007, he rates the same for the previous period and perhaps a little more, and the second part of 2008 to 2010 and on which it is reaping the benefits of those policies where inflation rates rapidly declined and did not exceed 7.2 percent.

He went Ghalibi: This decrease during the three years reflects the stability of the price fit to be a foundation for the start of changing the currency, and before the period of stability, this was hard on direct monetary authority the process of changing the currency because the period of stability were not realized, so the preferences to keep the currency without a change was more realistic, but after a period of stability and this expectation by continuing situation has completely changed, and should be noted that inflation is a crucial variable in the process of switching the currency as the return demolish all the efforts.