Storm on the dinar

Baghdad-spring Nader
Date of publication 27/05/2012 12:00 AM

Recent months have seen a marked decline in the exchange rate of the Iraqi dinar against the dollar, from 1200 to 1280 dinars to the dollar, to 1320 Dinara in some cases. Does this regression emergency or deliberate strategy, and what is the justified real?



The first interpretation, or most heavily in the financial markets, is that international sanctions against Syria and Iran led to substantial smuggling to the dollar in recent months has led to increased demand for the US currency.

The second interpretation is that the long political crisis faced by Iraq, weak confidence growing the local economy, both of which increased the demand for acquisition of dollar.

The third explanation is that the open-door policy and freedom of conversion agent on outer currency smuggling, despite the series of actions taken by the Central Bank of Iraq in the last three months to monitor large transfers, meaning that Iqbal citizens savings in national currency decreased in the recent period.

In any case the Iraqi dinar are a few months ago to unprecedented storm, is the first of its kind since 2003, and has reached back to 9 percent, the highest rate of exchange for four years.

Acknowledges the Central Bank Governor Sinan Al-Shabibi that ‪ ‬التوترات political and failed to develop the economy after the oil sector, both of which helped عدم‪ ‬استقرار dinar, and indicates that relatively unstable political situations in Iraq وفي‪ ‬المنطقه surrounding created a high demand for the dollar led to a price rise, ‪ ‬مضيفا purely recently that international financial embargo imposed on Iran and Syria is precisely why الرئيس‪ ‬لهذا الارتفاع‪. ‬

And the Central Bank justified on policy الماليه‪ ‬لم place seemed to be a starting point for ending the retreat because of the crisis in the political and economic dimensions, which means that the stability of the currency needs to be checked thoroughly before any regulatory action, كما‪ ‬ان specialists have registered an increase in crisis following the steps taken by the المركزي‪ Bank ‬العراقي to deal. ‪ ‬

Says Abdul Aziz, Director مصرف‪ ‬الرافدين said Hassoun decisions taken by the Central Bank for regulatory purposes and not understood سوق‪ ‬المال dealt with particular sensitivity. He adds that the ECB insisted that she be hard her تقديم‪ ‬مستندات in a way that banks did not operate easily, because it required the submission of شهادات‪ ‬ووثائق not banks poised for submission.

Bank المركزي‪ ‬العراقي may impose several actions weeks ago to curb the increasing demand on the dollar after ظهور‪ ‬مشاكل in Central Bank daily auction, by currency dealers to purchase الدولار‪ ‬وبيعه in Syria and Iran, so the Central Bank auctions requires that المشارك‪ ‬عضوا at the Chamber of Commerce of Iraq means that the participant record in غرفه‪ ‬التجاره in addition to obtain licenses from the Iraqi Ministry of trade. The تجار‪ ‬العمله are required to extract legal documents and obtain the necessary licences within 30 days, for the transfer of money abroad to pay for imports, and that they get شهاده‪ ‬منشا country factory, certified by the Iraqi Consulate in that country. ‪ ‬

Procedures for strict Central Bank increased the value of the dollar in the domestic market وفقا‪ ‬لنظريه supply and demand. Hasson believes that these actions have led to high سعر‪ ‬الدولار fall, explains allowance: this documentation cannot be provided easily لدي‪ ‬المتعاملين in the market. In addition, the political crisis in Iraq which had the role of في‪ ‬تدهور the value of the Iraqi dinar. As well as remarks from have competent and non-مختصه‪ ‬تناولت subject to الدينار‪ exchange market turmoil ‬العراقي‪. ‬

Remarkably, a concerned focused on linking ازمه‪ ‬الدينار of the Iraqi situation in neighbouring Syria and Iran which are ‬اقتصاديه to عقوبات‪, although the information indicates that previous sanctions imposed on Iraq جاءت‪ ‬بالفائده on the currencies of neighboring countries, and what is happening in Iraq today opposite. In other words, the Jordanian and Iranian ان‪ ‬العمله risen simultaneously with the collapse of the Iraqi dinar struck in 1990 when the imposition of the economic embargo on Iraq.

Attribute البعض‪ ‬عدم benefit the Iraqi currency from damage to Iranian and Syrian currencies كون‪ ‬الساحه lax allowed Iraqi economic affected in the region economically تعويض‪ ‬الخسائر across the Iraqi financial market. Says Planning Minister Mehdi Al-Hafez العراقي‪ ‬السابق that political and economic interference to both Iran and Syria with Iraq, they get ‪ ‬اتاح dollar Iraqi markets. And stresses that both Iran وسوريا‪ ‬تعيشان severe economic crisis due to the international sanctions imposed on them what had gone on the Iraqi market الي‪ ‬الهجوم to obtain currency الصعبه‪. ‬

Figures indicate that the Central Bank of Iraq was selling daily worth 160 million dollars before the withdrawal القوات‪ ‬الاميركيه of the country at the end of last year, but rising demand visibility in الفتره‪ ‬الاخيره and reached 500 million dollars as officials in البنك‪. ‬

Open door

It is known that other Iraqi Baghdad وباقي‪ ‬المدن do not see any difficulty in obtaining hard currency, with انتشار‪ ‬مئات unlicensed banking companies and even street vendors, meaning that convert dollar الي‪ ‬الخارج doesn't need much effort. And the open-door policy which relies في‪ ‬اقتصاد Iraq and free outer conversion catalysts to smuggle currency says concerned.

In sum, the Group internal and regional factors in the recent period combined to transform Iraq into a source of dollar, strong disorders in the region, and there are those who believe that the time has come to set financial and economic policies in accordance with the standards clearer to avoid reflections of the political storms that threaten the dinar.