Central banks actions for the stability of the Iraqi dinar is not working
Central banks actions for the stability of the Iraqi dinar is not working
04/27/2013 (23:01 pm)
Baghdad / tributary cactus and agencies
Experts believe specialize in regard financial and currency traders that the stability of the exchange rate of the dollar against the Iraqi dinar due to the absence of professional management of the central bank, pointing to the need to reconsider the mechanism by which it deals with the market to correct failures occurring in the exchange rate volatility, and record the dollar exchange rate in the market local risen sharply over the past few days, if the price of one dollar more than 1280 dinars after it had been during the past month varies in the range of 1200.
The central bank is responsible
The director of the Economic Media Center Dergham Mohammed Ali “It must be replaced
Department of the Central Bank of Iraq fully present to be able to maintain the exchange rate of the Iraqi dinar because the mechanism that we use at the moment are of no avail. Explains in his speech to the extent that “the old management of the Central Bank was able to reduce the high rates of inflation and this thing failed for some of the Great Powers”. He points out that the direction of the central bank at the moment is moving towards transparency only and that alone is not true, so it must be a balance between maintaining price levels of exchange by creating new mechanisms contribute to the flow of dollars into the market and according to estimates of the local market while maintaining a high level of transparency.
The attention to the existence of a serious matter by making the observer is what leads to the Director not detected irregularities Vmhafez the Central Bank and the head of the Office of Financial Supervision is one person.
For his part, sees economic expert on behalf of Abdel-Hadi said that “the central bank in the enviable position he does not know the movement of foreign currency trends if they leave the country Valmnavz uncontrollably and trade relations are not clear sometimes.”
He says Abdul Hadi for the “The Central Bank is responsible for the management of file exchange rate and must reconsider the mechanisms by which it deals with the cash market,” noting that the central currently suffers from a lack of streamlined put foreign currency leads to the rise of the dollar and lack of response to each applications because some of them do not have to cover the import of foreign and therefore there may be some kind of foreign currency smuggling.
He adds, “on the central bank to reconsider the introduction of foreign currency instruments in the Iraqi market a manner that achieves cruise in with the flow control the movement of foreign currency abroad.”
Fear of rising prices
Moreover adviser calls for finance and investment bank wholesome Elias Abbou, the central bank to increase the pumping foreign currency from the dollar index to control the massive rally that threatens the collapse of the Iraqi currency.
According to Abbo told (Iba) that “the skyrocketing price of the U.S. dollar against the Iraqi dinar is an indication of a threat to increase the prices of goods and imported goods and rising domestic market, pointing out that” all goods and imported goods held by foreign currency the dollar and any deterioration in the price of the dinar will lead to increase in commodity prices, which shave significant damage to the citizen his limited income. ”
He adds, “that the result of the high exchange rate of the dollar will contribute create inflationary rings or differences in exchange rates is an indication of a threat, especially deterioration will lead to the deterioration of the exchange rate of the Iraqi dinar.
He says economic expert Majid picture for “Alsumaria News” that “the regional situation in the region, particularly the situation surrounding the neighboring countries of Iraq, especially Iran and Syria, one of the main reasons behind the high price of the dollar in recent times in the Iraqi market,” noting that “the central bank sales in cash rose in recently more than remittances due to a cash deal these two countries in their trade due to the economic blockade imposed on them. ” He adds Suri that “the Bank sold $ 100 million a day, it means he sold $ 500 million per week and therefore it is $ 26 billion go out of Iraq for the purposes of import,” adding that “most of these amounts smuggled out of Iraq without the benefit of them.”
And refers figurehead that “the difference in sells the CBI of the dollar and of 1189 dinars to the dollar and is present in the local market of more of 1280 dinars to the dollar encouraged speculators, traders and citizens to go to buy dollars from the central bank for the purpose of take advantage of the price difference, which has increased the internal demand for the dollar, “pointing out that” this increase can not be reduced without the regulation of trade and import operations for Iraq. ”
And sells the central bank in the currency auction its U.S. dollar per b 1179 dinars, private banks and supply companies, but he does not sell to the citizens directly, while selling private banks authorized to sell the currency, the dollar by 1189 dinars, the citizens directly.
Currency smuggling mafias
He says economic expert on behalf of Jamil Antoine “The demand for the dollar is greater than the supply located because there are mafias collect the dollar and تهربه out of Iraq under the pretext of import operations from outside Iraq,” noting that “the amounts of money that comes out of Iraq are not commensurate with the quantities of goods entering the . ”
He adds Antoine that “Iraq has five offices for money laundering, but these offices are still below the level of detection for the smuggling of foreign currency out of Iraq,” stressing “the need to cooperate with all parties among themselves whether the central bank or customs, border control and tax and the fight against corruption and increase oversight and internal stakeholders. ”
It seems that banking offices in Baghdad, far from knowing the reasons for this rise, but that there is an agreement among themselves that there is a demand for the dollar than supply in the market.
He says the banking ax in Karrada Mohamed Ibrahim “Although the Iraqi Central Bank to sell the dollar to citizens through private banks and government, but it is still demand for the dollar is greater than the supply,” noting that “all purchased from the dollar a day from citizens and up to 50 thousand dollars finds it buys from the merchants, either through cash or in the form of remittances. ”
Stop the bank from the sale of dollar remittances confused market
The central bank says it seeks through currency auction which is evaluated for years, to maintain the exchange rate of the Iraqi dinar in the currency market, but the exchange rate is witnessing volatility clear since late last year, and the Bank offers no explanations for this discrepancy between the price and the price of the domestic market, the Although it is the body responsible for monetary policy in the country. Including exchange rate policies and being daily sessions for the sale and purchase of foreign currencies, except for public holidays stops by the Bank for these auctions.
Explains director of one government banks affiliated to the Ministry of Finance in Baghdad that the “Stop the Central Bank of Iraq, selling the dollar in the form of remittances for the purpose of organizing again during the last period disrupted the domestic market prompting traders to buy dollars from local markets, which led to the high price of the dollar in these markets.”
Adds the official, who preferred not to be named, said “prices remained high even after the central bank re-sell foreign remittances”, stressing that “what we are witnessing today of these high prices are speculative currency traders at a high level.”
And committed the Central Bank of Iraq in February 2012 all Iraqi banks participating in the auction the bank to buy and sell foreign currency must disclose its customers as a condition of access to foreign currency.
Dealers expected the local currency price of the Iraqi dinar continues its decline against the dollar, in light of what they described as “incomprehensible policy of the Central Bank of Iraq.”
The central bank authorized some private banks in Baghdad to sell dollar directly to citizens in order to meet the growing demand. And sells private banks, 5 thousand dollars per person carrying an Iraqi passport at a price not exceeding 1189 per dollar. But observers and currency traders say that this procedure did not contribute to the stability of exchange rates, after turning to the door to corruption, due to go most of the money intended for direct sale to specific customers.