Expert: Currency exchange rate affects the import and export value

1/10/2016 0:00

Baghdad Joseph Zayer
It is known that the currency of any country depends on the performance of its economy, value, and there are several factors in this performance impact in determining this value, including the interest rate where height will attract foreign capital to the inside, and the other factor balance the country's trade Increasing demand for a particular commodity will also increase demand for its currency.

In addition to that factor the political situation of the country, the inflation rate also reflects the purchasing value of the currency or the amount of goods and services that can be purchased.

It measures adopted by the economic policies of countries are managing the currency market and the price of the currency exchange in front of the other currencies, and in this regard stresses economist Ahmed Abrihi Ali that the exchange rate affects imports and exports, it can raise or reduce the relative prices of imports (exports) to support capacity international competitiveness or weaken it.

He adds Abrihi: That's why the pressure on China to revalue its currency in order to make imports cheap and exports expensive exerting downward pressure on their international competitiveness and shrink its trade surplus.

The best example to control the value of any currency is the measures taken by China's second-largest economy in the world to maintain a low rate of the Chinese yuan to serve their purposes but also in the export and dumping their products which, The United States accuses China of fabricating reduce the price of its currency to stimulate trade-offs Business.

In Iraq, the parliamentary Finance Committee announced it was looking for a project to reconsider the dinar exchange rate against the dollar with the government and central bank. He explained the Commission's decision MP Ahmad Haji: that there was a project taught by the Central Bank and the Council of Ministers, and the Finance Committee, to reconsider the dollar's exchange rate against the dinar.

He pointed Haji in comments to local media that it is still a project under study and no decision, where the study Is Iraq could reconsider the exchange rate?

Is it the government is in the interest of the citizen or hurt? Noting that a review of the exchange rate will be one of the government's interest, but harmful to the citizen, where would increase the exchange rate to runaway inflation, and an increase in commodity prices, and student Haji need to take it into consideration and study of the project from all aspects, before taking any decision, noting that the re Consideration will be an increase of the dollar exchange rate, a low rate of the dinar against the dollar, because the government can not raise the price of the dinar against the dollar, at a time that the revenues and expenditures in dinars to the dollar, pointing out that the increase in price of the dollar is what is the benefit to the government. Iraq is facing a financial crisis due to the sharp decline of oil, in terms of financial budget for this year with a total expenditure of more than 501 trillion deficit rate of 8.22 percent.

The Finance Minister Hoshyar Zebari said earlier last week in a newspaper interview that:

There are several alternatives to oil, such as borrowing from international institutions, low-interest, and we did it. For example we have received help from the International Monetary Fund, and a few days ago we received billion and 002 million dollars from the World Bank, we have introduced a monitoring program on how we manage the financial and economic policy, and if we could get help more of them, as we intend to sell sovereign bonds, because the situation in Iraq this year better than last year in this regard.

Zebari explained: The other option is how to raise the Iraqi dinar exchange rate, despite the risk that it may be his choice Repercussions.