Economist: lifting the three zeroes from the currency will impact negatively on the rich and the poor positive
10/11/2011 07:25

Baghdad, November 10 (Rn) - An economic expert said on Thursday that the deletion of zeros from the local Iraqi currency will lead to the rehabilitation of the distribution of the value of exchange between individuals of the rich and the poor, the rich will be affected negatively and positively poor.

Dr. Abdul Salam gesture Said a professor at Baghdad University / School of Management and Economics and a specialist in the study of the banks, told the Kurdish news agency (Rn) that "the pursuit of the Iraqi Central Bank to raise three zeroes from the local currency will enhance the Iraqi economy, and will lead to increase the value of currency in the low-income , and to increase the purchasing power of citizens and will lead to a reduction of the volume of money supply in the market by 10%. "

The organizers of the Central Bank of Iraq, has indicated in more than one occasion to the need to delete three zeros and the issuance of new currency, the categories of large cash transactions to fill the large, in addition to the presence of small coins, as well as the new currency is issued in Arabic, Kurdish and English.

He Said, "The decision to raise zeros of the three is subject to three policies, Nation Books monetary and credit (undertaken by the central bank) and fiscal policy undertaken by the Ministry of Finance, to develop studies and solutions to address the amount of cash block in the Iraqi market, valued at 30 trillion Iraqi dinars.

He stressed that "the lifting of the zeros of the Iraqi currency strategic project must work according to the criteria by fundamentalism because much of the cash payments are not due to the evolution of the banking system."

He explained that "there are two ways to solve the dilemma of the withdrawal of old currency from the local market and inject new way in the first not to print a new currency in the Press Central Bank or the printing of foreign, but that is put the seal on the old currency and make it a new currency through it, and the way the second complementary to the first that the old currency is traded between citizens and banks on the basis of calculation of all (1100) and a hundred thousand dinars, equal to an old dinars, and a new one.

And that "this method will provide the cost of printing, which will cost the state billions of dinars, and will reduce the" seal "the likelihood of fraud, and reduce the size of the money supply in the market by 10%, which would increase the value and considered an indirect tax on the owners of the money."

He Said that "this action will benefit the low income and poor people because the currency will be of more value than its previous value."

And reduced specialize Iraqis in the area of ​​the economy from the impact of the CBE to delete the zeros from the currency purchasing power of the Iraqi dinar, also hopes the government from behind the move, as seen researchers that the cost of raising the zeros will be greater than the benefit, considering that the currency's strength is measured by the stability of disbursement, which is based on the strength of the productive sector is able to provide goods and services.

The Central Bank of Iraq announced on June 23 last was ready to delete the zeros of the Iraqi currency, and as he emphasized that this step is one of the strategic functions of the Bank, pointed out that the new currency will contain on the Kurdish language in addition to Arabic.

The Central Bank of Iraq four branches in Basra and Sulaymaniyah, Erbil and Mosul, where the established bank independent Iraqi under the law of the Central Bank of Iraq issued on the sixth of March / March 2004, which is responsible for maintaining price stability and the implementation of monetary policy, including exchange rate policies and the management of foreign reserves and the issuance of and currency management, in addition to the organization of the banking sector.