Delete zeros ...Experts downplay its effects ...
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Thread: Delete zeros ...Experts downplay its effects ...

  1. #1

    Delete zeros ...Experts downplay its effects ...

    Date: Wednesday, 03-10-2012 07: 48 am

    Baghdad/bright o Asadi

    Increased in recent times varying between exhibitions and statements in favour of the deletion of zeros, where researchers finds that economists have no effect whether negative or positive economic performance in the country, and they just change the unit of measurement,

    Indicating that the deletion of zeros related to currency reform, not monetary reform, noting that motivated "zeroing" is not economic, but rather to facilitate accounting process.

    Deputy Chairman of the Organization of our economy for sustainable development and support the private sector, Dr. Abdul Hadi Jabar al: "deleting zeros were merely changing the unit of measurement, and do not involve any effects, whether negative or positive economic performance real variables", adding that "the current monetary unit value of" 1000 "will be replaced with a new value of critique" one dinar "equivalent value of" 1000 "substituted dinar, so for the rest of other monetary units", stating that "the deletion of zeros does not mean an improvement in Since the devaluation, change the unit of measurement has nothing at all to improve the value of the currency, and the latter is linked to the real factors reflect the efficiency of economic performance ".

    He bonded (range): "the work of the Central Bank does not seek to delete zeros but to restructure the currency and associated coins to large groups to facilitate transactions and other small groups facilitate micro-transactions," he said, adding that "this process is thought to absorb excess money supply and facilitate the task of management and promote confidence in the local currency and maintain relative stability in the exchange rate, but it requires better economic conditions", and stressed that he supported "these submissions in terms of Principle ", believing that" such a move was premature.

    Aboudi said that "the relative stability of the dinar exchange rate against the dollar was due to auction daily by the Central Bank and not by supply and demand factors, indicators of real economic variables as a whole is declining," he said, adding that "the Iraqi economy high unemployment rates do not hope absorbed in the short term. Weak production apparatus and flexibility in all sectors, particularly in commodity sectors for reasons linked to the high cost of production and the weakness of competitiveness with imported goods, and to activate the drain may extend for years to come. "

    "The restructuring of such currency climate cannot be utilized in promoting confidence in the local currency, which is what would happen when the currency restructuring in better economic conditions coincide with real economic indicators improved, as such a process involves financial costs both in printed new currency or the administrative costs associated with the replacement and needed to relieve everyday citizens, particularly low-income," if we take into account that the current categories currency Function relatively satisfactorily, there is nothing wrong with larger groups coins to cover large transaction and postpone restructuring conditions more appropriate, especially since the Iraqi economy was stability that makes us more satisfied in the absence of inflation in the future.

    " This process would likely be accompanied by bonded delete zeros dinar prices who will pay the price of foreign exchange reserves of the Central Bank, while that caused by a placebo and not linked to improved real variables of the economy, "We also exchange process despite all precautionary measures in a climate free from corruption and fraud have put question marks for possible effectiveness of counterfeit currency and replace it with new currencies.

    For his part, Assistant Professor in the College of business and Economics-Baghdad University Dr. spring behind, singling out the "range", the reasons in favour of the deletion of zeros by saying: "they believe that process contributes to rename the national currency and help stabilize the currency and absorb surplus and reduce inflationary expectations".

    "Supporters of this process they consider part of the monetary reform, and as limiting (dollarization) in the economy, and a stable exchange rate, and reduce the cost of printing paper currency and seigniorage." Opponents of the deletion of zeros, have had their reasons too, and it is clarified by behind the "reasons for opposing the deletion of zeros are they considered practical obstacle to foreign investors for pervasive wait-and-see period conversion, and also the high costs of printing banknotes in absence of a vast segments of the currency", "among the reasons, temporary increase in prices pending adaptation to the new system, which could become a continuous increase, plus the costs of currency notes and coins Heroes""They expect to cause the deletion of zeros with negative impacts under the administrative and financial corruption, and create a false impression, that last over, inflation and declining use of coins rising prices."

    Khalaf said that "deleting zeros will not significantly impact either negatively or positively to the Iraqi economy," he said, adding that inflation has nothing to do with the process of lifting the zeros.

    The "inflation linked to a wide range of internal and external variables, not raising them, ciphers, adding that" to build on the foundation of inflation to absorb currency raise zeros be unfortunate basis, lower nominal money supply via delete zeros should not be confused with reduced money supply via absorption mechanism currency that leave their direct impact in that view, "he said, adding that" when the money supply is reduced by 5%, for example, that leaves its impact on overall monetary variables and indicators and real especially price Interest, as well as in the overall internal balance and the exchange rate and its effects in the external balance, while any number of zeros even if nominal baseline and huge percentages of the money supply, has no significant impact especially on the interest rate and the exchange rate. "

    Khalaf said that "if what happened to the dollar fell in currency market-local currency-with the deletion of zeros, we must be attentive to the remaining balances of foreign assets held by the Central Bank-and by our firm belief-will be reduced to cover the rise in the value of the dinar, the Central Bank had sacrificed those foreign assets in order to achieve that improvement, not deleting zeros is gracious".

    He said that "the process of deleting zeros is related to currency reform, not monetary reform, and have no effect on the level of economic performance as long as they affect in the general price level, including the exchange rate and interest rate, and do not affect relative prices as it does not cause an imbalance between prices of goods and services on the one hand, and factors of production on the other hand, as long as they do not find it economically prevents deletion of three zeros or more, or three or more zeros," "The process of lifting the zeros will not be economic motives, but other motivations that facilitate accounting process."

    Deputy Central Bank Governor Dr. Mohammad Saleh appearance was counting project delete zeros primarily around the same time, stressing the need to achieve economic stability and political and security before you begin the deletion of zeros.

    Saleh said: "the deletion of zeros is counter-initiatives but requires a stable economic, political and security at the same time to start working out..

  2. #2
    Recycled article ?

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