Auction sale of currency to balance supply and demand and to preserve the stability of the market

Auction sale of currency to balance supply and demand and to preserve the stability of the market

Posted, 08/25/2014 22:08

Iraqi Dinar5 trillion and 200 billion dinars value Auctions central to control liquidity
BAGHDAD Mustafa al-Hashemi – the joy of pumice
is an auction sale of the currency held by the central bank daily important tool of monetary policy to keep inflation and the exchange rate of the dinar against the dollar since warned Mokhtassan that any stop or delay in convening would raise prices as a result of vibration balance of supply and demand for the dollar.
financial expert, the appearance of Dr. Mohammed Saleh stressed the importance of holding an auction of foreign currency on a regular basis, so as to maintain the level of exchange rate stability, and absorption strength of demand for imported goods and services.
Saleh added in told (morning): “The demand for foreign currency means the demand for goods and services and the benefits of foreign,” explaining the case in non-sales, will lead to a shortage of supply, with the presence and power demand is high, especially given that the country’s economy is flexible and energies productivity Off, as well as The bulk of the presentation commodity is imported (products and goods and services, foreign imported).
So between the central bank limits the inflation situation and preserve the value of the Iraqi currency, and otherwise, the prices are rising and the value of the currency goes down, thus increasing the desire of people to demand goods and services, and this concept working against monetary policy in place in the country.
either on the treasury transfers that fall in the currency auction, noted the benefit to it are two types namely remittances treasury (government) long-term, and remittances Central (Central Bank) short-term, saying that he generally monetary policy and lowly interference in operations the open market through the purchase or sale of remittances long or short term.
believes that in general, the central banks intervene vouchers short-term, and that because it affects in maintaining levels of liquidity, and the demand in general, in addition to reducing inflationary pressures.
turn, the researcher said economic state just that the daily auctions organized by the central bank to sell foreign currency differ significantly from auctions vouchers Treasury of the Ministry of Finance and the Central Bank.
explained in a statement (morning) that the auction sale of the currency is a daily auction dedicated to the sale of foreign currency to banks and money transfer companies for the purpose of sustaining economic life ordinary citizens, noting that any emergency may prevent the establishment of this auction would adversely affect the market as a natural result of the lack of supply and increased demand for the dollar.
stressed the importance of holding this auction to achieve a balance in the market, which has a big impact on the stability of the exchange rate of the dinar against the dollar as well to provide support to the purchasing power of the local currency.
indicated that the central bank sells a day in the auction sale of the currency on average about $ 200 million, up sometimes and go down that figure by the market situation, distributed between the sale in cash or bank transfers of Foreign Affairs for the purpose of import of services and goods to Gaza private and commercial purposes.
and Auctions central bank and the treasury transfers private finance ministry said economic researcher said both sides issued a special plan to sell Hawwalath this year for the purpose of controlling the liquidity and funding of temporary disability, indicating that remittances Central is scheduled to be funded deficit of $ 5 trillion and 200 billion dinars, while the plan Auctions treasury transfers include funding temporary deficit in the budget of $ 5 trillion dinars, the fact that the budget in Iraq built on expectations of oil revenues, what might displays it to the deficit.
came in to clarify the central bank on auctions of treasury transfers it based on the law of public debt, which authorized The Ministry of Finance issued remittances Treasury guaranteed by the government, the central bank as an agent financially to the ministry manages Auctions remittances Treasury on behalf of the ministry, which will, according to the determinants of the annual budget law by issuing money orders treasury for the purposes of government funding where identified and the Ministry of Finance system and a mechanism for Auctions remittances government coffers, which Auction uniform price with a nominal value of $ 500 billion dinars.

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