AL-KAZEMI’S ADVISOR: THE PROJECT TO DELETE ZEROS FROM THE CURRENCY IS SUBJECT TO TWO CONDITIONS
AL-KAZEMI’S ADVISOR: THE PROJECT TO DELETE ZEROS FROM THE CURRENCY IS SUBJECT TO TWO CONDITIONS
Sunday, June 20, 2021 7:05 PM
Baghdad / National News Center
Today, Sunday, the financial advisor to the Prime Minister, Mazhar Muhammad Salih, set two conditions for deleting 3 zeros from the currency, stressing that the option to delete is proposed as part of the strategies for reforming the currency and cash payments system in Iraq.
Saleh told the official agency and followed by the “National News Center”, “The Central Bank of Iraq has developed a project to delete three zeros from the Iraqi currency in order to reform the cash payments system, which has become burdened by the insomnia of the economic blockade imposed in the nineties of the last century, and put it into research and study long ago, This is after reviewing about 54 international experiments since the end of World War II until the second decade of the twenty-first century, which took place in various countries of the world in which the cash payment systems were reformed and made to work more efficiently, the last of which was the Islamic Republic of Iran and before that, Turkey.
He added that “the phenomenon of increasing zeros in the monetary unit or adding zeros to a single monetary unit usually comes due to the exposure of economies to unbridled waves of inflation or continuous sharp rises for years in the price level due to wars, sieges and conflicts, which lead to financing the deficit of government budgets through cash issuance.” .
And because the price means the value of goods and services expressed in cash, the continuous rise in prices without stopping leads to the erosion of the value of the monetary unit, which requires the issuance of larger monetary categories due to the lack of value of the smaller monetary groups and the disappearance of their ability to cover transactions and exchanges of high monetary value in the market.
He continued, “Accordingly, the monetary value of things or tangible assets and others inflates, and when inflation ends, according to which prices have increased to three decimal places, or more or less, according to the nature of each economy, countries resort to reducing the artificial reproduction in numbers, especially in the numbers of accounts books, budgets, and various numbers of tools.” Accounting for that after two conditions are met.”
He continued, “The first condition is price stability and global economic growth, and the second is appropriate stability in political life, so the importance of deleting zeros from the currency and slimming currency units as a necessary condition for reducing accounting numbers and facilitating arithmetic handling and the cost of managing new large numbers and the absence of small numbers and fractions, as it is noted that slimming currencies Cash comes because of its role in the sustainability of calculating huge numbers of financial values, which are not absorbed by ordinary computers due to the large number of decimal places and the emergence of many accounting errors, especially dealing with trillions, which means that one number in front of it has 12 decimal places.
Saleh believed that “the hyperinflation that hit the Iraqi economy in the nineties of the last century added three numbers to the Iraqi monetary unit (that is, one dinar became equal to a thousand dinars, and ten dinars became ten thousand dinars, and so on for the rest of the categories), while the small categories disappeared from circulation completely, but rather Every 250 fils became equal to 250 dinars, and it was considered the smallest monetary unit in circulation today, which raised the cost of micro-transactions that mostly affect the poor segments.
He added, “In this way, monetary systems aspire to remove the burden of historical inflation from the folds of the monetary unit by resorting to deleting three zeros from the old currency to equalize the new currency with lower numbers but with the same value. Let’s say, for example, that one new dinar equals 1000 old dinars without change in value or rights. . The accounting books, statistics, numbers and computer systems are also modified with the value of the new currency within an easy and easy reform strategy, and the countries believe that the slimming of the currency system facilitates the circulation of accounting numbers and helps to issue smaller cash denominations for very small transactions whose monetary values have been destroyed by historical inflation in our country such as the dirham and others.
He concluded by saying, “The project to delete zeros in Iraq is still technically prepared by the Central Bank of Iraq, which is the official sectoral authority and the monetary authority concerned with this matter and in cooperation with all three state agencies and authorities, but the project is postponed at the present time until the appropriate conditions are achieved and remains part of the currency system reform strategies. and cash payments in Iraq.
nnciraq.com
