Central: Iraq mass of large cash deals, but weak
of Baghdad – Haider Filaih Rubaie
said an economist that the economic conditions and volatile financial pressure and inflation that has befallen on Iraq previously generated negative effect on the regularity of the commercial market and the labor markets and production and the level of living of citizens.
indicating that these conditions combined led to abnormalities in several structures and economic relations among which was the presence block cash many zeros of little value and in a manner not commensurate with the future developments in the present and the future of the national economy.
Iraq has suffered from a mass of cash tremendous over 30 trillion Iraqi dinars, for more than four trillion paper money and is it as a disruption of a large negative impact on monetary policy, according to many stakeholders who have supported in the light of this process to delete the zeros initiated by the Central Bank of study since not too long.
announced the Central last month that early next year will put the new currency that will be deleted, including three zeros , indicating during a statement to the official that the move was aimed at reviving the financial policy in the country side, and to equality dinar to the dollar on the other, as well as good economic other of the elimination of inflation.
, says Deputy Governor of the Central Bank of Iraq appearance of Dr. Mohammed Saleh: The trading four trillion paper money is the product of a long period of inflation and economic decline, rising, for example, the index of consumer prices foundation 1993 year from 100 to 200,000 in the middle of 2003, which means that the item that was sold for 100 dinars became sold for 200,000 thousand dinars .. . And so on. It is noted for it, and under such circumstances and the deterioration of the value of the currency increased the coin most of the 25 dinars to 25000 dinars, which means that inflation is added, these zeros.
known for inflation, that means higher prices of money on goods and services (ie, how much money we need to swap package of goods and services .. The more increase the amount of money allocated to the swap on the package itself means that there is inflation or a rise in the price of money). cons of the money supply large has led inflation continued to rise no currency in circulation of 23 billion dinars in 1991 to about ( 30) trillion dinars at the present time, the higher the largest category of currency from 25 dinars to 25000 dinars over time, and the light that indicates the benefit that inflation fee in accordance with those data numbers of new currency traded by adding three zeros, increasing the amount of cash transactions in nominal and level of production costs large quantities of them accompanied by processes, storage, and distribution of the promise and the counting and auditing accompany her levels doubled, helped to increase operational risk associated with. In the opinion of the deputy governor of the central bank said in light of price stability and optimism in Iraq’s future development, it became necessary radical reform the system of management of the currency by re- structure commensurate with the structure of prices, the new different and stable levels of wages and salaries, which differed significantly from the last thirty years. and could result in action (deletion of zeros) to increase the value of Iraqi dinar, without affecting the rate of exchange, especially as the largest category of cash Iraq now is not equal to only 21 dollars, according to Saleh, who said in this regard: that Iraq is now handles the mass of large cash but weak in the components so that the currency has become the largest category of Atsawi only $ 21 U.S. for the time being. Therefore, the high gross domestic product of Iraq of $ 140 billion at year-end 2010 to more than $ 300 billion at the end of 2015, will increase the money supply exported from the 30 trillion dinars to about 70 trillion dinars, adding that the installation weak in the structure of the currency took the added cost is called the cost of cash transactions in terms of traded between individuals, individuals and banks and the banking system. indicates the benefit to Sweden (for example), where there is currently one of the best systems of cash payments in the world, however, the cost of trading cash counting and transfer and storage of the coin cost the national economy, there is a rate of 4 percent of gross domestic product of Sweden, and on this basis gives the deputy governor of the Central Bank, for example in regards to Iraq, who said he shall be managed so amounts of cash tremendous weak structure, which means that the country will add the cost of cash transactions may up to 8 percent or more of the gross domestic product, the burden of Salih stressed that the individual will bear in his dealings, and this reduced the opinion of the Deputy Governor of the Central Bank of the efficiency of the exchange as a social institution support to institutions of various economic, including the market and the proof is that cash transactions large limited to payment U.S. dollar, which means bringing currency other country in the circulation for the award of cash transactions because of falling efficiency and installation of the money supply current. the value of the new currency was born the process of deleting the zeros in many people’s fears about whether the delete operation will reduce the total value of the earned or Ictenze Citizens of money, or may affect the value of financial transactions large or in the contracts, buying and selling real estate, cars, and this is denied by fully Deputy Governor of the Central Bank when stressed that convert 30 trillion dinars to 30 billion will not arrange any changes or shift of income or monetary wealth of the people natural and moral as well as the lack of impact on the contracts and commitments between natural persons and legal entities all, as long as the amount of new money the smaller number covers the interchange package commodity itself in the old money with the number bigger. shows the benefit that the replacement of the Iraqi currency of current and deleted three zeros which demonstrates the fruit of stability and the success of the economic policies of the central bank in maintaining the stability and the stability of the Iraqi dinar exchange rate and inflation falling to the rank to one decimal place and build reserves of foreign support of the Iraqi dinar at levels not previously achieved during the last thirty years, which is the cover of the Iraqi currency.