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Thread: Abadi adviser: praises the policy of the CBI and supports the deletion of zeros

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    Exclamation Abadi adviser: praises the policy of the CBI and supports the deletion of zeros

    May 18, 2015

    Abadi adviser: praises the policy of the Central Bank and supports the deletion of zeros at the country's stability conditions

    According to the appearance of Mohammed Saleh, an economic advisor to the Prime Minister Haider al-Abadi, on Monday, about a quarter of Iraq's budget disbursement to support military operations against the terrorist organization Daash.

    Saleh said in an interview with / Baghdadi News / "The government's priority today is to return in safety usurped areas and to maintain the security in the relatively stable and unstable regions".

    Saleh added that "cleaning and paving streets and laying all the necessary services and well-being in it, does not interest him if he will occupy the days before Aldoaash yet."

    Saleh pointed out that "the Iraqi Central Bank policy characterized by accuracy and objectivity," noting that "the equation in maintaining the value of the Iraqi dinar with the revaluation of monetary reserves in light of these security conditions bad and lower oil prices, a very difficult and summit complex, though the Central managed to decipher decode them to follow the policy to sell hard currency.

    Saleh pointed out that "the central issue at the feet of a large coin natural step will not adversely affect the economic situation in the country.

    He stressed Saleh, said that "the project to delete the zeros is very important and has a large on the Iraqi economy and the value of the currency benefits, I have called him since throughout the years, but the current situation, which is going through the country is not suitable for such a move, which need to be economic and security stability, and this is what is Known over the globaleconomic history.

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    Experts call to finance the budget deficit by reducing the rate of the dinar


    [ltr] Called for an economist to reconsider monetary policy especially with regard to auction currency under the shadow of the current conditions of the different dollar exchange rates, the fixed exchange rate under the auction price parallel exchange market, and while noting the weakness of the regulatory agencies in the follow-up dollar sales and punctuated of money laundering and smuggling, he noted that one of the available solutions is to reduce the rate of the Iraqi dinar against the dollar

    The economist said Maytham coffee in an interview for the "long" that "currency auction has become a big burden on the central bank with the entry of the budget in 2015, and lower oil prices, especially as we enter the new dollar wave and begin to phase separation between the exchange rate determined under the auction price parallel cashed in the market, down to multiple later exchange rates. "
    "The auction could not find a clear mechanism to separate the real needs of the market, and what it requires of dollars, and what goes of those dollars abroad without exchange for imported goods, and falls under different such as smuggling or escape or washing labels money," pointing out that the "regulatorsand statistical did not answer whether there was a gap between the dollar and the corresponding sales of imports, the volume of money laundering, especially since the central bank law allows the provision of the dollar and the freedom of trade and conversion."

    He continued by saying that "the exchange rate of the Iraqi dinar is backed auction overstated its currency although it meets the needs of the previous stage in an efficient, but because of the current conditions of low oil prices and the growing budget deficit to dangerous levels, can begin to reduce the exchange rate gradually it is possible to achieve more feature of "pointing out that" currency auction was not discussed seriously and in depth the possibilities of changing the dinar's exchange rate against the dollar and the possibilities of the cases raise the value of the dinar or reduced. "

    He noted that "the time has come to open an in-depth conversations about reconsider auction currency, and open horizons wider regarding visions of the state on how management of the economy and distribution of wealth, and alleviate dependence on rents and petrodollars, and a review of the overall business, financial and monetary policies." Describing the last stage, which was marked by financial abundance "It has deepened the poor distribution of wealth and lost efficiency considerations."
    He pointed out that "the reduction of the local currency will lead to the reduction of the budget deficit gradually, and covers the case of low dangerous liquidity experienced and will cut imports because the goods will be more expensive, leading to rationing of consumption at the macro level, as well as the devaluation will reduce the incentive for smuggling the dollar. "

    He guessed that "contributes to devaluation to increase domestic production and stimulate the private sector and contribute to increased employment, especially if such a reduction accompanied the consistent fiscal policy are in this goal."

    On the possibility of higher commodity prices in the event of the State proceeded to raise the price of the dinar between coffee that "despite what has caused the increase in commodity prices, but the national interest of the country sometimes requires doing such so steps, and could represent a reduction in the dinar exchange rate policy, and lead him from increases in the prices of various commodities, a substitute for taxes that are difficult to talk about and apply now while higher commodity prices will be a substitute for indirect taxes, both of which can lead the same effect on the reduction in, what leads to the reduction of demand and consumption, "pointing out that" Reducing Currency deliberate policy rate resort has a lot of countries. "

    He continued by saying that "the central bank should not be responsible for trade policy and imports of the private sector alone, and return to the traditional role of which is to maintain the stability of domestic prices, including the exchange rate," pointing out that "the current oil shock should not pass without the benefit of studied . "
    So said economist Ihsan Jabr expert in an interview for the "long" that "the state is obliged to determine the size of dollar supply, because it did not have sufficient liquidity to launch the offer, in the absence of devices that limit and control the smuggling."

    "The Iraqi market is heavily dependent on imported goods and the private sector needs a large amount of hard currency for the import process to determine that the amount sold the dollar will lead to determine the volume of goods imported by the private sector."
    He pointed out that "demand for the dollar in the market increases by all sectors led to the creation of a gap between the exchange rate at the auction 1170 dinars to the dollar and the parallel market, which reached the exchange rate to the borders of 1300 dinars."

    He noted that "the state is not free to raise prices, the dollar against the dinar because this will create some sort of turmoil and would reduce the purchasing power of citizens."
    He continued by saying that "before the State two choices: either increase the width of the dollar and this is difficult under the shadow of the current circumstances, or reduce the demand for it but we do not have a regulatory system effectively limits the flight and money laundering, and demand is justified for the dollar and the follow-up of banking companies that are not possess official documents operations."
    He concluded his speech by saying that "if the dollar continued to determine the width will grow pessimistic indicators in the market leads to the formation of additional demand for the dollar and increase prices further."

    The International Monetary Fund predicted in (21 March 2015), the high proportion of the deficit in the budget for Iraq in 2015 to more than the proportion of the 12 percent announced by the government, because of lower oil prices and the weakness of the possibility of Iraq's commitment to export 3.3 million barrels per day, and assume the budget, He suggested the implementation of reform measures include strict austerity in investment projects, and a commitment to reducing expenses, and the revision of the maximum limits of central bank sales of the currency, referring to the overall growth contraction, and the prospect of rising inflation slightly the end of this year. The current year's budget law, committed the Central Bank of Iraq, in paragraph 50, identifying sales of foreign currency (dollar) in the daily auction ceiling does not exceed 75 million dinars, with the exercise of justice in the sale, and claim participant in the auction the bank to provide the introduction of goods and data documents Tax settling accounts and savings Alkmarki within 30 days from the date of purchase of the amount, and so it applied the sanctions set forth in the Central Bank Act or regulations issued it, and use other banking instruments to maintain the strength of the dinar against the dollar.

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