Warning of an imminent collapse of the Iraqi dinar
Warning of an imminent collapse of the Iraqi dinar
Writings Sunday 0.13 September 0.2015
Wrote Ahmed Altaama: Economists warned of the imminent collapse of the Iraqi dinar, amid security and economic chaos plaguing the country, and the state’s inability to pay employees and retirees and accessories ongoing war salaries with the organization of the Islamic state ‘Daash'; which prompted thousands of young Iraqis to migrate to Europe, with millions of Iraqis struggling in Anbar and Mosul and Salahuddin hardship, after cutting state salaries.
The economist said, Mazen al-Obeidi, said that ‘the past eight years of rule by former prime minister Nuri al-Maliki, has seen historically in vain for the money and the budget of the entire Iraq on fake projects and ministries introduced for quotas between the parties, and not for the country’s needs’. He added: ‘The government has wasted more than 800 trillion Iraqi dinars, except for the hidden amounts of billions of dollars, no one knows yet where I went, and thus emptied the treasury Iraq’. And between al-Obeidi that ‘the likelihood of an imminent collapse of the Iraqi dinar against the dollar has become large, the state was forced to borrow from private banks to cover expenses, and the central bank announced its intention on the sale of gold bullion for citizens to support the financial liquidity, while the Iraqi parliament approved the 2015 budget on the price of $ 56 a barrel one, while oil is witnessing volatility and a clear decline, the regional changes and the war on ‘Daash’, which fell to $ 45 a barrel in front of the extraction cost of up to $ 6; and this means a deficit of $ 17 per barrel.
“Observers attributed the cause of the collapse is likely dinar to ill successive governments management, and load the state budget huge amounts of money, and pay the salaries of tens of thousands of jobs and titles phantom in various security and military service organs of the State.
The banker said Salem Al Ameri that ‘there are several factors that will lead to the collapse of the Iraqi dinar, most notably the lack of oil imports to bridge the budget deficit, in With the war in half of the country with the organization ‘Daash’, the continuous decline in oil prices globally which means a large deficit in the country’s budget.
“He said that ‘the security deterioration in the country’s demand greatly increased the dollar-buying from the market; which means an increase in more demand of the show, and thus raise the price of the dollar gradually in front of the Iraqi dinar.
“The severe criticism from parliamentarians of the Central Bank of Iraq last June, as the dollar rose against the Iraqi dinar reached 1360 dinars to the dollar.
He accused the Congress in previous central bank statements flop in his policies, said a member of the Committee of Economy representative in a press statement earlier that ‘the central bank adds 8 per cent on the applications submitted by companies and traders to buy dollars, and requires them to sell dollars directly tax are met, a 5 per cent customs value of 3 per cent; bringing in Finally dollar against the Iraqi dinar.
“The Iraqi Council of Representatives approved the 2015 budget on the basis of the price of a barrel of oil by $ 56 per barrel, and the rate of export 3 million barrels per day.
Embarrassing the government
of his financial expert, Jabbar al-Fadhli said embarrassing the government, do not want to declare their inability to pay expenses, ranging from employees and pensions, which stopped three months ago in the hot provinces, and the end of the expenditures required for the ongoing military operations; and that stops most of them for lack of funding ‘ .
He explained Fadhli ‘There is a big waste of hard currency for purchases and expenses of armament, and sell directly to the dollar for companies and traders in front of the lack of oil imports and lower the price of oil globally; and this raises the budget deficit value, and here the state began borrowing from private banks; they need to borrow from the bank International bridge the budget deficit, and the payment of salaries of employees in the next few months.
‘fear citizens of the collapse of the Iraqi dinar against the US dollar; it means a humanitarian catastrophe, and the state can not pay the salaries and entitlements of citizens in the next few months.
As Iraq is heading to the issuance of the first bonds the dollar since the US invasion, sources in the British financial district last month, said that the credit rating institutions perplexed in the evaluation of these bonds, in light of the unstable political conditions experienced by Iraq and control the organization of the Islamic State (Daash) a large part of its territory.
According to the bulletin ( City AMD) which is published in London, Iraq plans to issue international bonds worth $ 6 billion. And will assume all of the bank ‘Citigroup’ and’ja JPMorgan ‘Americans, in addition to the bank’ Deutsche Bank ‘German bond management and marketing in the world.
According to the expectations of sources in the neighborhood of money to the prospectus’ City AMD’, the rating agencies will deal with these bonds on it ‘junk bonds’, the center of political risk experienced by Iraq.
and come together political and economic corruption and the theft of tens of billions of public money to raise the budget deficit, and makes the country unable to meet its obligations.