Mashhadani: Delete the zeros will not harm the real value of currency
BAGHDAD / electronic integrity / follow-up of David Muhannad
Says economist and head of economic studies at the Center for Mustansiriya Dr. Abdul Rahman al-Mashhadani: The process of deleting the zeros formality through which change the nominal value of the currency without prejudice to the value true and have no raised real economic because the currency exchange will not lead to an increase in GDP of the country , explaining that …the process is applied without any damage in many countries of the world during the last thirty years, including Bolivia in 1986, Russia 1998, Turkey 2005, North Korea, 2009.
He called on al-Mashhadani, the need to distinguish between the process of change in real currency, which means changing the exchange rate of the local currency compared to currencies of leadership as dollar Mthelaoho is lead to a re-evaluation of prices of goods and services due to the change the real value of Amlhmthel what happened in Iraq in 2007, when the value of Iraqi dinar against the U.S. dollar to 1267 Dinara after it was sold for 1475 dinars in 2006, and like what was done by China when it devalued its currency iwan compared to other currencies to compete with Chinese goods, other goods in international markets as it is cheaper, and the process of deleting the zeroes, which means keep them real value of the currency.
And the expert a number of pros, where he said the process of deleting the zeroes will be provided by the new currency, considering changing the currency thing will work to strengthen the confidence with one of the symbols of national sovereignty of the country, and can increase confidence in the national currency with the citizen at home and the foreign investor abroad, as well as reducing the process of dollarization using the currency as a store of value and measurement, as well as facilitate the process of trade within the country, and to facilitate the process of converting Dinar to other currencies.
Shows the al-Mashhadani, a number of economic justification achieved, which indicated that it was capable of completing the process of removing the zeros from the currency, noting that it achieved thanks to the measures the central bank which could be performed by following the tight monetary policy effective in the years 2006-2011 to be able to derive a set of variables, the positive that are driving the change process and contribute to Banjahaa.
He is an economist another: that the process of deletion of zeros will not lead to the occurrence of collateral damage in the real value of the coin, and it will not bear negative effects can affect in GDP, explaining that the monetary authorities resort to such a procedure after reaching the economy advanced stages of stability.
The aim of the process according to the Iraqi Central Bank to reduce the enormous money supply, and reduce inflation, which he considered the bank (monetary inflation) due to increased amounts of cash pumped into the street, which invited him to the foot to the deletion of three zeros from the currency.
According to reliable sources that the process of deletion of zeros will be early next year, noting that the measure would be gradually until the absorption of the entire Old Banknotes of the market completely, the memory of the two currencies existing and new will work at the same time without reducing the value of any of them until the absorption of the entire currency that will be current or (old) time.