Monday, September 19, 2011

Iraq ~ Deletion of Zeros ...

from alitthad news ...

September 19, 2011

Economic Reports : What does the deletion of zeros from the dinar ..!!?

المهندس محمود شاكر الربيعي Shaker Mahmoud Al-Rubaie

That the deletion of zeros from Iraqi dinar a tremendous seeks the Iraqi Central Bank to draw its policy and its implementation as one of the foundations of the economic development of the country and as a tool to curb high inflation and slack the big happened in Iraqi currency as a result of the economic policies of irresponsible over the country, presence of mass cash approaching 27 trillion dinars and the size of four trillion paper money has created a major imbalance in the payments system and causing a danger in the process of counting and the count rate exceeded 1.3% of the volume of work ..!!

Continues ...

There is no doubt that the price of local currency is linked to the price of international currency as dollar, U.S. and the euro and the Japanese yen, as linked to our currency, the local exchange rate of U.S. dollar in the mid-nineties of the last century, the exchange rate of the dinar to the lowest point of him 3,000 dinars against the dollar and the reason for this is due to the economic blockade that produced an economic crisis led to the collapse of Iraq's oil exports and the deterioration of agricultural and industrial production and high rates of unemployment and non-payment of court and the large deficit in the state budget. The year after 2003, the exchange rate of the dinar against the dollar to about 1,200 dinars to the dollar and this has causes many the most important is to increase imports oil with a high volume of foreign exchange reserves, which now stands at $58billion.

That the stability of the dinar exchange rate enhances the ripening of an idea to delete the zeros until the harvest fruits, but the currency management system needs more study and analysis, and the courage to take a moment of security appropriate for the application of this decision. That dropping zeros from the dinar's help in getting closer to U.S. dollar exchange rate, as happened with Turkish experience, as has been deleted six zeroes from the local currency (lira) to become a U.S. dollar exchange rate is equal to one pound and did not continue the case for what it is, as is now the U.S. dollar exchange rate, the equivalent of 1.76 pounds, this is subject to the economic activity of that country.

The approach of the dinar exchange rate of the dollar makes it a strong contender, and this encourages the issuance of new currency equivalent percent dollars for use in commercial transactions large and the issuance of currency, a small metal rewards cents for the daily interactions of small depend citizen currently on the means of cash, unlike what we see in other countries. that depend means to pay the alternative such as Visa Card and Alcardt Kart and others. In practical terms, the new dinar without zeros is facing a number of objections first is the monetary illusion experienced by the citizen one who earns a monthly salary of one million dinars is not satisfied for the first time Bostlamh amount of one thousand dinars as a substitute was receiving as well as the merchant who sells a commodity to 1000 dinars can not digest the new price to sell one dinar and one that will remain a concern not fear can be overcome only through the time and Habituation on prices of the new new dinars and this temporary condition.

The foreign investor is not pleased with this case, he is always seen him and depends on the calculations of profit and loss and interest accruing Valumblyon dollars at the present time is equal to one billion and two hundred million dinars, either in the accounts of the new dinar is equal to one million two hundred thousand dinars, and this makes investors less willing to invest . It must be recalled that the new money equal to the money the old in terms of purchasing power, but will increase the currency gravity because of the expected rise dealings Iraqi dinar more instead of dollars when traders will also encourage savings, or achievement of the dinar in the process of saving Maxben which the interest rates and high exchange rate and this are the signs of the expected economic prosperity of the country.

That the switch would be gradual and long-term co-exist, with which the old currency with a new currency with pictures of the symbols of Iraq and in three languages: Arabic, Kurdish and English, and we hope to achieve a new dinar all aiming for the Iraqi citizen who is proud of his homeland.