Iraqi dinar swings due to political unrest and economic sanctions on neighboring countries

Date: Monday 16/04/2012 20:29

Translation: Ammar Kazim Mohammed Alaa Rady in place for the disposal of the currency in central Baghdad, there was a panel displays the value of Iraqi dinar to the U.S. dollar has been developed by three question marks in front of the value of the dinar. Iraqi businessmen say several weeks ago and they are struggling because of price concerns of the Iraqi dinar as a result of economic sanctions imposed on Iraq’s neighboring countries such as Iran and Syria as well as political unrest in the country. Alaa Rady shop owner: the price of… the dinar fluctuates constantly changing and therefore do not see me put a price fixed over the dinar. The Central Bank of Iraq this month to impose tough measures to curb the growing demand for the dollar after the emergence of problems in the daily auction of the Central Bank was the fact that some currency traders to buy dollar and sell it in Syria and Iran. In an attempt to stop the leakage of dollars from Iraq’s Central Bank to tighten the instructions on who enters the auction and distributed a message to the control of the markets through re-evaluation of bid price and rising from 1.166 dinars to the dollar to 1.170 dinars and that the participation of traders in the auction the central bank has become a condition now to be Co-member of the Iraqi Chamber of Commerce, which means that the participant be recorded formally in the Chamber of Commerce as well as to obtain licenses from the Iraqi Ministry of Trade. A strict central bank raised the value of the dollar in the domestic market, which affected the local businesses that depend on the dollar to buy foreign imports. Said Abu Mohammed, a government employee: This is the first time that a high price in this figure, which certainly affect the citizens because people are dealing in dollars. Says one currency traders: the market is in a deadlock and the reason is that people do not want to sell the dollar at the moment for fear of escalation in the future, while others do not want to buy it for fear of decline in its value later. Iraq at the present time is still recovering from decades of war and sanctions, but its economy is still centrally, which raises a complaint of foreign investors who start their business in this state of the OPEC countries, while oil represents 95% of government revenue. With economic sanctions on Iran, Syria, Iraq has become an important source of dollars for these two countries as he tries to residents and business people also have access to hard currency to escape from the weaker local currency. Central Bank of Iraq For his part, said that the reserves of Iraq’s large hard currency has risen to become a $ 60 billion on the back of high world oil prices, which will protect the financial system in Iraq from the damage, but he says that the new measures taken is to adjust the local market. The deputy governor of the Central Bank of the appearance of Mohammed Qassem: We do not want to go currency to finance terrorists or illegal activities, we are working carefully on this matter and move so quickly because we are under pressure. He added: We intervene in the market through this auction in order to install the Iraqi dinar exchange rate and keep in a stable condition and the main thing is to put the Iraqi dinar in the case where safety is a priority for us. Shabibi said the central bank governor in a business conference last week: that the political tensions and the failure of development of the economy beyond the oil sector Prepare instability in the Iraqi dinar. For traders, the requirements of the central bank to buy the dollar impact on their business what is required of them extract and legal documents and obtain licenses within 30 days so that they can send money abroad to pay for imports, as they must get a Certificate of origin of the country the plant is certified by the Iraqi consulate in that country . Traders consider this action a waste of time, so forcing many to resort to local markets to get the dollar at a rate higher than the central bank to secure their goods from abroad and many of them say that these measures are unrealistic and should have been coming into the market gradually.     newspaper: Chicago Tribune U.S.