Iraq is trying to once again support the Iraqi dinar and the dollar to stop the flow of outside
Iraq is trying to once again support the Iraqi dinar and the dollar to stop the flow of outside
07/06/2012 10:21 AM
Babinaoz (Reuters) – say traders and officials said the Iraqi Central Bank, who is struggling to stem the illicit flow of dollars to Iran and Syria, has achieved some success in supporting the stability of its currency the Iraqi dinar by the flow of dollars to the Iraqis through banks run by the state.
facing the bank for months, difficulty in dealing with the increase demand for the dollar in daily Mzhadath with Iqbal traders to buy the U.S. currency to sell in neighboring Syria and Iran, where galvanized the international sanctions imposed on them the demand for hard currency.
Iraq and is recovering from decades of war and sanctions is still a centrally managed economy to a large extent. Oil represents 95 percent of government revenue.
The central bank allowed in late last month to sell the dollar at a fixed price through banks run by the state which helped to reduce the dollar exchange rate of 1280 Iraqi dinars to 1210 Iraqi dinars and narrow the gap between the official price and the market price.
said harmful Qasim Deputy Governor of the Central Bank of Iraq that the bank began to pump six million dollars a day by the largest banks government in the country and are the Rafidain and Rasheed, for their sold to the Iraqis who plan to travel abroad.
He added that the difference in the value of Iraqi dinar between the central bank rate and the market price was seven percent, but far less than four percent, adding that the bank is expected to fall below two percent in a few weeks.
being the central bank daily auction selling the dollar, compared to 1166 Iraqi dinars. The sale price of U.S. currency in the Rafidain Bank and Rasheed Bank 1189 Iraqi dinars, while the market price of 1210 Iraqi dinars.
usually sells the Central Bank every week about 250 thousand dollars to private banks and 75 thousand dollars for the exchange companies and money transfer.
and central bank data showed that the traders rushing in months to buy the dollar in daily auctions of the Central Bank to sell in Syria and Iran as they buy up to $ 400 million on some days in December, compared with an average earlier reached $ 150 million.
In an effort to crack down on this practice emphasized the central bank in April rules on who can participate in these auctions binding traders that they are members of the Iraqi chambers of commerce and obtain licenses from the Ministry of Commerce.
and raise the central bank also dinar at auction a bit to 1166 dinars to the dollar of 1170 dinars.
but these steps raised the value of U.S. currency in Iraqi market, inflicting damage to local businesses that depend on the dollar to buy foreign imports.
traders said that the measures, which include obtaining a permit within 30 days to send money abroad to pay for imports consume time and forced them to shift to the local market to buy dollars at a higher price than the price of the Central Bank.
said Qassim said the central bank extended after that statement to six months to allow greater flexibility in the import process.As requested by four private banks from the central bank to allow them to sell the dollar at a fixed price.
The central bank says that Iraq’s vast reserves of foreign currency, which rose to a record $ 60 billion thanks to rising oil prices will protect its financial system from damage.
However, some economic analysts say These measures may not maintain the stability of the dinar in the long run.
The economist said Majid picture, “we still import more than 85 percent of our needs and there is still pressure from Syria and Iran.”
Source: babnews
