The pros and cons of deleting zeros
Raised the proposal to delete the zeros of the Iraqi currency sensation has interested in economic affairs and apprehensive citizens there are of considered a step in the right direction to restore the prestige of the Iraqi currency and get rid of inflation suffered by the Iraqi economy, especially the volume of currency in circulation which estimated up to 30 trillion dinars Adin decision is an important step in monetary reform and strengthen the confidence of citizens in the national currency in the view of other parties,
including the government’s proposal to delete the zeros will carry the country overloaded being will increase the phenomenon of money laundering and would negatively affect the financial trading in the stock market with the possibility of higher inflation and higher rates of current and between different visionaries found necessary approaching this subject and the valley where an attempt to simplify what is happening and to inform citizens on the merits of the deletion of zeros from the current currency
* Continuous suffering
Beginning with Managing Director of the Company and Mesopotamia Banking Ali Hamza of Haider, who spoke to the reporter (news agency, media / INA) for “standing with the decision and the replacement of the existing currency being will contribute to the reduction of suffering and problems suffered by the Iraqi economy in general” and indicates the Haider to “The presence of foreign agendas implemented from neighboring countries purpose of weakening the Iraqi dinar and destroy the country’s economy by pumping fake currency in the market and that cause not to trust in the Iraqi currency and thus a collapse of the national economy”
Adding, “We are the owners of banking offices suffer a lot from the current currency to the presence of large quantities of counterfeit currency, particularly class ten thousand dinars bearing the high-tech fraud and although the experience that we have in the field of currency, but we can not control them”
“It is strange that we get sometimes on counterfeit currency through some government banks and the big problem we lose through confidence in the currency current and make most of the citizens are turning to foreign currency dealing and storage addition there is suffering for currency small as currency hit fatigue can not intervene in counter currency because of damage to the leaves so we pay additional amounts to the banks in order to be delivered “
The director of banking company continues by saying “One of the problems that we are experiencing in the current currency is difficult to carry because of amplified where can not be any dealer or businessman to carry huge amounts of money, especially the security situation is still unstable in some areas,”
* To Atathir value purchasing
Perhaps the business is most affected by the change, which awaits the existing currency and in order to know the negatives and positives that will surround the work of trade and the new currency Tell Engineer Sadiq Hashim Afaihan Chamber of Commerce of Babylon, saying “the process of deletion of zeros from the Iraqi dinar will not affect the value of currency in circulation and therefore will not affect the purchasing power of the Iraqi dinar and so the value will remain fixed and will not benefit the buyer of the dinar current something after deletion of zeros as will change gradually and lasts for more than a year to be where the old currency is present in the markets along with the new currency and this happened in some countries such as Turkey, which remained two currencies in circulation for four years until citizens are accustomed to it and slowly dissipated fears and so the citizens will not win a thing of the deletion process, considering that the currency’s strength is measured by the level of stability and demonstrated value for disbursement and concentrated on the strength of the productive sector capable of providing goods and services “
Adding that “the deletion of zeros is a formality and not really called illusion cash and of Mbrarat raised by the Central Bank is to reduce the use of the dollar in the insider and ease of carrying currency and facilitate banking transactions and reduce the money supply currently in circulation and facilitate accountable individuals and restore confidence in Iraqi dinars locally and internationally “
* To be media campaigns
According Afaihan “on the central bank to intensify the information campaign to publicize the potential consequences for the economy and the value of the currency after deletion of zeros through various media as well as through the organization of seminars and conferences in the provinces, as it must be emphasized that the purchasing power of the currency will not Taatgier and reassure citizens and traders and businessmen and to create citizen to accept the new currency and dispel fear felt by and clarify that the operation is the deletion of zeros only, without revaluation of the currency and its exchange rate and whether the operation will be while retaining the form of currency or that form of currency will Itagier and what categories new cash, which will be traded and print it all must citizen knows before the coming of the new currency.
The show President Chamber of Commerce Babylon fear “of the emergence of mafias currency, which is preparing to rig the trillions of dinars exploited to change currency also mentioned the central bank governor Dr Sinan Shabibi during a session of the Parliamentary Finance Committee, saying that from 8-16?% Of classes ten thousand dinars and a five and twenty thousand dinars currently in circulation are counterfeit “
Amadvia “Among the negatives and drawbacks of the process of changing the currency is the cost of printing high in addition to the cost of destroying the old currency and could exploit the process in money laundering and increase administrative corruption to switch counterfeit currency and confuse business dealings and increase demand for the dollar, which increases the rate of exchange in the domestic market and thus increase commercial commodity prices and rising inflation undermines confidence in the Iraqi economy “
* Block high cash
The following قفتنا was a professor at the College of Business and Economics University of Babylon Dr. Jawad Al-Bakri, who began talking about the historical development of the Iraqi currency, saying “the Iraqi dinar was linked to Sterling for a long time, but now pegged to the U.S. Dollar. Did not change the rate of the dinar against the U.S. dollar throughout the period between 1987 and 1992 as the U.S. dollar was equal to 0.311 Iraqi dinars. There are restrictions on foreign exchange and foreign exchange dealings and after the second Gulf war, the deterioration rate of the dinar influenced the economic embargo imposed by the United Nations.
Adding “today of the money supply nearly 30 trillion Iraqi dinars to the various groups and under price stability and optimism in Iraq Development, it became necessary radical reform on the system management of currency and the re-structuring, commensurate with the prices of new goods and levels of wages and salaries, which differed significantly from the last thirty years , in addition to dealing large lump of cash in components so weak currency has become the largest category of Atsawi only 21 U.S. dollars at the present time. Considering that the rise in GDP for Iraq of $ 140 billion at year-end 2010 to more than $ 300 billion at the end of 2015 will increase the money supply exporting of 30 trillion dinars to about 70 trillion dinars “
And we have been asked about the positives of the decision to delete the zeros and currency exchange Re-Bakri, saying “one of the most important pros are off dollarization of the Iraqi economy, which is one of the most important challenges facing policy makers in developing countries in general and Iraq in particular, which means the use of the U.S. dollar or any currency foreign her ability replacement of the national currency in transactions and contracts internal financial promise a store of value at the same time. either positive second will be through reducing inflation rates Balamd average, which include raising the external value of the Iraqi dinar (ie the nominal exchange rate) in a manner commensurate with the real exchange rate to contain inflationary expectations, taking into account the trends emerging inflationary level acceptance and availability of reserves inflationary level acceptance and availability of international reserves at the Central Bank of Iraq and a way inhibits inflationary expectations referred to above and to reduce the speed of circulation of money, the deleted three zeros means converting 30 trillion dinars to $ 30 billion by deleting three zeros from the current currency and replace it with a new currency “
Bakri continues, “that among the pros is not the impact of currency exchange contracts and obligations between natural persons and legal entities all. It so-it generates function sports homogeneous class zero as long as the amount of new money younger figure covers the exchange package commodity itself in money the old with the largest number in addition to restructuring the currency and installed – for the category large amount of 25,000 dinars are alone (two thirds of the amount of securities traded ), the issuance of larger groups mean reduction of four trillion banknote currently in circulation and converted to a number equal to (2.8) billion and banknotes. As Stakhtzel large groups of currency nearly 90% of the total exported to trading groups “
* Cons decision
The Bakri said the most important negatives that accompany the process of deletion of zeros is monetary illusion as the deletion of three zeros from the Iraqi currency will sign the citizen under penalty of monetary illusion, which is the most prominent negatives that can infect the Iraqi citizens in the event of deleting three zeros from the current currency is the impact of moral and falling per capita under penalty of monetary illusion and suffering panic and all this would be the result of colliding with the value of the new currency after deletion, which leads him to believe that the value of its assets fell by dividing by three zeroes “
According to Dr. Jawad al-Bakri, “The time that has been announced to change the currency and delete the zeros produced that references the political in the Iraqi state has a great role in the acceptance or rejection of the proposal. Addition to the corridors of monetary policy in Iraq where there are parties shows and supporter as well as the move seems At first glance, a cosmetic change, but specialists to look at the long run “
He continues Bakri findings by saying “There is no numeric scale from which to measure the benefit that could be for a particular community that derived by deleting the number of zeros in the currency and opinion polls showed the desire of the Iraqi citizen to see its currency strong as the former. Thus, the process of lifting the zeroes will raise the value of the currency and reduces the demand for hard currency that powerful, would restore the balance between the value of local and foreign currency and give it market power at home and abroad, which could lead to currency appreciation Iraqi front the U.S. dollar , for example, that an employee who receives 400,000 dinars at the exchange rate of 1200 be its purchasing power in dollars $ 333 and if the strengthening of the dinar equivalent, for example = 500 dinars to the dollar will become purchasing power of $ 800 instead of $ 333
* Difference in public opinion
It is strange that this decision carry differing with the decision-makers as cautioned Advisor to the Prime Minister for Economic Affairs, Dr. Abdul Hussein Al-Anbuge in a press statement “of the risks that may accompany the process of replacing the currency and deleting three zeros of them, considering that this matter will return the largest of corruption in the history of Iraq and will lead to add trillions of counterfeit currency that will go to the Holocaust in exchange for coins “
Pointing to the receipt of information said it is almost certainly the presence of mafias operating since now for counterfeit currency in order to exploit some weak souls and corrupt during times replaced with new ones and adding at the same time that this procedure will not return any benefit on the Iraqi economy at the moment “
Noting that “the current circumstances through which Iraq will not leave any positive impact on the local real economy after deleting three zeros from the currency from afar or from a nearby”
Adding, “It was better on economic policy-makers before this procedure is to pay attention to development or administrative reforms, tax or entire banking experiencing serious declines, which can lead to obstruction of many vital economic targets that Iraq seeks to achieve. “He said
The central bank governor has said during an interview made by his deputy, Dr. appearance of Mohammed Saleh to resolve the bank to proceed with the project to delete the zeros of the Iraqi dinar, converting a thousand dinars to one dinar, pointing to the adoption of a long term plan for this project, which would be reluctant money supply Iraq’s vast – according to Saleh – who between well factors such action which he described as critical, saying that “Iraq is a country that suffered inflation runaway during more than two decades ago, reflected inflation monetary enormous, for example, rose monetary issuance of about 25 billion dinars in the early nineties, becoming in 2003 six thousand billion. “
And Saleh “that the draft raise three zeroes from the currency made by the government five years ago to the Central Bank, and underwent throughout this period to an extensive study over the need to raise zeros to strengthen the value of the Iraqi currency.”
1 that the deletion of zeros from the current currency new currency increases the purchasing power of the Iraqi dinar currency فاستبدال attendant economic benefits for the country and accompanied by a feasibility study and financial.
2 that the deletion of zeros in the process if implemented, it would limit the size of the money supply and facilitate the circulation of the new currency and this would be reflected positively on the economy of the country.
3 that the presence of three zeros in the figures of the currency is illogical and loss due to excessive confusion that gets dissuade currency trading, as well as continuing high inflation rate of Iraqi currency.
4 that the process of deletion of zeros lead to increased market confidence in Iraqi dinars and ease of trading is still each shorten the figures in daily deal in buying and selling a thousand dinars saying dinars, or half a dinar and so on.
5 that the deletion of zeros neither gains nor the consequent loss does not mean only change what is changing is the number expressed just like (1000) meter is equal to (1 km), what has changed is the name of the unit of measurement just is not.
6 that there are some countries in the world the process of deletion of zeros from Sudan since removed two zeros from its currency in 2007 and Bolivia deleted three zeros from its currency in 2008 and the state of Zimbabwe deleted ten zeros from its currency in 2008.
7 If the Iraqi government was able to make the new Iraqi dinar after the deletion of zeros from him equal to or worth more than the value of the dollar as it was in the past when exchange, we are all, without exception, with the deletion of zeros and replace the current currency new currency free of zeros as it once was.
Through the foregoing and what has put the views of the professionals to be recognized that the process of lifting the zeros from the new currency is necessary and of great importance to the Iraqi economy but needs to extensive studies from which to find ways in ward off corruption from the process with all its reasoning in order to restore the Iraqi dinar prestige in front other currencies and to educate citizens about the expected results of which to dissipate his fear of change that dominated the currency.