Editorial: Do you delete the zeros is the solution or create a new problem or an economic futility
January 25, 2012
We do not know how came the idea to delete the zeros has not changed the currency to replace the word was the word to delete the zeros is less severe and resistant to change of a word to replace the coin. That have proved their purchasing power and who is behind this absurd economic Sazelzel Iraqi currency after it saw the light and recovered it is an economic plan for foreign countries or domestic destinations purpose of which is their money laundering and curb runaway Iraqi dinar, which began publishing. Power and influence in the region and who are the leaders of the replacement and why this insistence on the replacement amnesty to delete the zeros increased in recent media statements of politicians, journalists and professionals from the financial experts and economists about the strategy to delete the zeros between the opposition and pro adopted by the Central Bank of Iraq in order to be defined more accurately must ask the following questions and answer them.
1- Is the replacement process increases the purchasing power of the Iraqi dinar.
2- Is the new version reduces the money supply.
3- Is the new version needs to coin metal cash and categories of the largest.
4- Is the new version affects the traded commodities, fixed, especially real estate.
5- Is the currency caused the current economic problem at the moment and must be changed.
6- Is the new version accompanied by corruption.
In order to answer these questions must know that there are several other major countries are to have the same zeros in the currency did not constitute a hindrance or have any economic problem.
To answer the first question is that the process of replacing the currency increases the purchasing power of the new Iraqi dinars. That any replacement of the coin, at least accompanied by economic benefits, accompanied by a feasibility study and financial and monetary, social and psychological process of offering new currency replace the other currency is not marred by anything, but must put a strong currency any have purchasing power of her employer can not be falsified need to pause and less estimate the contribution of the new currency to increase the power of the Iraqi dinar in the short term or long term, but after asking many professionals in the field of economics, monetary, fiscal and banking response was that the process of replacing the currency does not increase the purchasing power of the Iraqi dinar new and this was confirmed by the appearance of Dr. Vice-President of the Central Bank in a seminar about deleting the zeroes in the College of Management and Economics at the University of Qadisiya.
So there will be a backfire, according to my modest opinion that the replacement process will reduce the purchasing power of the Iraqi dinar because of the psychological factor that would accompany the switch and this was confirmed by Mr. adviser to Prime Minister Dr. Abdul Hussein Al-Anbuge when hosted in the Economic Committee in the Iraqi Council of Representatives and was his bold and I add my opinion to his opinion and this produces when you switch the product price was very high in numbers at a lower price would create a psychological condition in clinging to price up or huge figure and this will lead to increased prices of products traded by 2% to 5%, while the goods fixed 5% to 15%.
If I want to address this increase, it needs to five years, at least if used monetary policy and media are excellent and that will lead us to the purchasing power at today’s prices and this part of the economic logic and philosophy of administrative, financial and cash is not acceptable and stand seriously the direction of this process in the Iraqi Parliament and the Economic and all the political blocs .
So we conclude that the new version does not increase the purchasing power of the new Iraqi dinars.
The second question: Is the version of the new money reduces the mass of cash or the volume of money the answer is very easy because the process is never reduce mass cash as possible to reduce to a year or two, but the process of all is simply the process of replacing paper money with another example, a ten thousand change the category of the ten dinars. Thus, for the rest and here would be an increase in the money supply additional metal is the main purpose of the switch. we conclude that the monetary mass is increasing with the new version in the short term
Question three: Is the version you need to minting currency, metal and categories of low-value production more than the value used in addition to carrying the Central Bank of the costs of population and currency printing the new and the costs of the Damage the old currency and the replacement process and the cost of others pending concern the banks, management and staff and this needs time and time itself, the cost and paperwork, and others.
Will create problems, especially with instruments, etc. These costs very large it not better to bring these costs for the development of the banking sector is not it more appropriate that we develop our banks to become internationally certified instead of the bank per a TBI-Government banking and trade with the world is not it supposed to develop the Banking and access to deal-mail instead of rely on old ways most of the banks in Iraq and improve it. if the central bank was able to actually make the new Iraqi dinar is equal to the dollar at the rate we are all with the replacement of the Iraqi dinar as the currency has become a strong and corresponds to the dollar.
Fourth question: After the review of financial experts has been asked Is the new version affects the traded commodities, fixed, especially real estate. The answer was that the goods fixed prices will rise relatively These linked at the psychological factor, especially if given the replacement process a longer period, for example if a property value 100000000 hundred million van when the replacement will be 100,000 hundred thousand dinars, the seller will sell at $ 120,000 or more or a little less this increase sends reassuring here will be accompanied by psychological and Stock Exchange real estate slowdown in the early years.
Question V: Is the current currency caused the problem at the moment it needs to be replaced with the large difference between the current currency and the currency of the former regime, which replaced the issue Iraqi dinars new October 15, 2003 to January 15, 2004 This was the currency printed in the Press Dallarro in Britain and was printed with good specifications are difficult to falsify were used in all parts of Iraq including the Kurdistan region in northern Iraq and has a currency exchange where the Replace each dinars printed in Iraq or China dinar new Iraqi. note that there is convergence between the process of replacement in 2004 and 2013 in terms of time, note that the currency Current currency is good and not subject to fraud and earned the trust and confidence of all its citizens and businesses of all kinds authorized the replacement for what or what is the reason that leads us to replace
Question VI: The process of administrative and financial corruption has become rampant in most state institutions, as well as banks are not free of this process is the person who ensures that the manipulation and fraud and corruption when replacing the new currency there are more than 800 bank in Iraq, if 10% of them where there is corruption there 80 How the Bank will control this process and there is fear of replacement by new counterfeit currency, which will lead to inflation, the currency in terms of money supply and the replacement process more than the true figure of the old criticism. But the controversial what is the use of the replacement process if they do not increase the purchasing power does not exceed the discharge of the Iraqi dinar against the dollar and the other hand, bear the cost of minting coin and paper currency and need machines and foreign companies to print and address fraud and corruption, administrative and financial problems of individuals and the costs and psychological effort effort of the people for the replacement process not to mention the social problems reflect the replacement process first replaced by the currency where replaced in the currency of good difficult to forge and had a value greater than the purchasing power and a good example of the rate of exchange the Iraqi dinar was more powerful when the replacement was an urgent need to switch because of the form of currency is desired by the citizens of the replacement process was successful but the process of replacing today’s need to Tignes. Was the answer to a specialist in this area that the replacement process has the advantage of only one is to reduce the zeros from the currency will lead to minimize accounting errors which it is located as a result of the large numbers of accountants in the accounting and banking transactions than those who confuse this work.
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