The application of the law of the fish: the issuance of large denomination threatens small

2016-01-15 | (Voice of Iraq) - Baghdad surprised Mohamed Mahmoud as he takes on the monthly salary the existence of a new class of securities, a fifty-thousand Iraqi dinars category and that the Iraqi Central Bank announced its intention printed in atheist tenth of the month of November - last November. Mahmoud His high salary relatively sees the existence of this currency as easy for him to carry his salary without draw attention to him, especially as he is forced to cut large walk distance from the government department in which it operates and even the place which leaves his car in it. "I previously had to hide the salary black bags because the amount that Otzlmh relatively large presence small groups of five thousand or ten thousand class be so dangerous a little bit because passers-by come to their notice my pregnancy a large amount of Mali while I came out of the circle, which makes me vulnerable to thieves, "says Mahmoud. But some believe that the new with the fifty thousand class paper would hurt a lot Boodall living as their Abdul Sattar, who works daily wages in the capital Baghdad Secretariat. young man Ali, who receive a daily ten thousand Iraqi dinars allocated amount thousand dinars them to go back and forth from his home to the Secretariat building and vice versa He fears that the freight rise in one of five hundred dinars to the road to the ground which means doubling the sum earmarked for the transfer with the expected decline in the daily wages to him, according to the approved by the government to reduce public expenditures, especially salaries and wages of its employees by three percent. In practical terms there is nothing to confirm fears but he cites the high transport fares from 250 dinars to (500) dinars when printed banknote with twenty-five thousand class a few years ago. "We had coins of small categories with categories Coins (25) dinars and 100 dinars and no longer exists today basically," says Ali. disappearance of these currencies of trading daily mean direct increase in the prices of cheap goods to the highest in turn affect the inflation index in the country, which would be its effects are clear to those with middle and low income mainly levels. Valslah that were sold, for example, (250) dinars price could rise to (500) which means a decrease in the value of one thousand dinars unit approximate to measure the prices in the local market to half (one thousand dinars, worth almost US $ 0.8). Central Bank of Iraq began distributing small quantities of the new currency on some state departments and some banks that are raising the quantity gradually Even access to the size decision. Economists and although they do not see a direct correlation between the issuance of large groups of currency and the decline in the value of small groups, but they reckon check the decline actually what they describe temperament Iraqi market and the consumer alike. "The Iraqi market is not subject to the standards of their counterparts in the rest of the world it is well known that the version of the big groups come to reduce the money supply, especially in the corporate, business and other segments of the large trading ".. says economic researcher Bassam As. He adds as "there is a mood in the local market back consumer desire primarily to the reduction of the value of small groups in the case of large groups became circulation significantly and this is what is difficult to explain in reality. "According to the researcher himself, the solution is to keep large groups currencies for the enjoyment of its benefits in the big trade with the continuation of the Central Bank of Iraq in small groups issuing currency to keep it fresh in daily transactions and strengthened procedures challenge of any expected price inflation. The presence of cash and paper category (50) thousand dinars, equivalent to $ (42) US $ will facilitate daily trading in large trades by contributing significantly to the reduction of the money supply by half Almost as that previously banknote highest value was of category (25) thousand. While the continued issuance of small groups currencies will maintain the value of goods low prices and prevent high prices. The central bank for his part did not rule out the domestic market affected by the issuance of a new currency with the fifty thousand class Therefore wait in the same hundred thousand dinars category approved by the former to avoid any inflation, currency issuance decided while the aim of the issuance of the fifty thousand class was reducing the size of the currency used in daily trading, which in turn led to the lifting of the rate of inflation, according to the announcement earlier in the bank's governor Ali Keywords. In all cases, the new currency was issued and began to spread in the local market gradually as planned central bank is that the spread of caution reflects to some extent the concerns of traded currencies subject to fisheries law, which feared by middle and low income earners in case I ate big Currency small counterpart and was replaced in the domestic market.