Must diversify central bank reserves in foreign currencies to avoid the effect of “currency war”

Experts: must diversify central bank reserves in foreign currencies to avoid the effect of “currency war” World on the national economy

Date: 25/02/2013 13:00:48 Monday

Baghdad (news) / report / Hussein Faleh / .. War escalated currency recently among the advanced industrial countries in the world, such as Japan, China and some European countries, through the establishment of the state to deliberately weaken its currency.
And open the sharp decline of the yen last month a new currency war front between Europe and Asia, where the accused among European Japan seeking to take action designed to allow its currency to further decline to increase the competitiveness of its exports in foreign markets.

Where it began some Third World countries take precautions and Ahtrazha fear the impact of this war on the national currency and economies.

Warned a number of economic experts and specialists in the financial affairs of the affected “currency war” between Japan and some European countries on the national economy, being a yield dependent on oil, and has a cash reserve in dollars.

Calling on during the talk (of the Agency news) to the need to diversify the basket of currencies in the reserves of the Central Bank and to rely on international currencies and high-value as well as gold.

Economic expert on behalf of Jamil said: “The currency war” is the wrong term for countries that are trying to reduce its currency to achieve high production growth and to protect the economy, they are truly commercial competition between industrialized countries and not war.

The beautiful (of the Agency news): that the industrialized countries when weaken trade in global markets as a result of the increase in prices of goods due to the high cost of production, so it is hard to play export goods Vtlji to reduce its currency to create temptations for importers.

He added: that these countries despite the strength of its economy, but it has a basket of currencies variety and gold did not keep a single currency in order to provide protection for the economy in the event of lower other currencies, so its purpose is not currency war and dropping economies of other countries, but to provide protection to the national economy.

He said: This commercial competition between the states will be reflected in third world countries, including Iraq, because they depend Bastiradathm of goods and services to those countries, but Iraq has a strong currency Mcnamh strength reservoir of cash than (68) billion dollars, as well as oil reserves estimated at ( 143) billion barrels, in addition to the central bank for asylum to retain gold, these are all dissipated from the seriousness of the global currency crisis on the Iraqi economy.

He advised beautiful: the central bank to diversify foreign Amlath and not rely solely on the dollar, because if the devaluation of the dollar in global markets will cause economic problems in the country, and also must retain large quantities of gold to protect the national economy.

The term currency war has emerged in 2010, after he criticized Brazil monetary policies pursued by some industrialized countries such as the United States and Britain, This period also witnessed the escalation of rhetoric between the United States and China on the exchange rate of the Chinese yuan.

The currency war is through various means, such as the sale of the local currency and buying foreign currencies, and interest rate cuts, and quantitative management policies is printing more currency to reduce its value, and the goal is to support exports and the labor sector of the state itself.

The financial expert Majid picture, confirmed: that the international currency war caused by the presence of the differences balance of payments, if depreciated currency rising exports and if increased the value of the currency goes down and exports are resorting to imports.

He said the picture (of the Agency news): Iraq must take advantage of this war between those countries for the benefit of the national economy through the development of the oil sector and a good policy to manage the money in the state and the Iraqi economy.

He stressed: the need to strengthen economic and trade relations with all countries of the world and not be limited to a few countries, and must also diversify foreign Amlath because oil is sold in dollars, bringing the sovereign reserve located at the Central Bank in the dollar.

He added: You must invest part of the currency to exploit changes in the economies of countries in the world to increase the monetary reserves, and enhance the development process of the country through the activation of the sectors of agriculture, industry and tourism.

For his part, warned economic analyst Abdul Sattar al-Hashemi, the vulnerability of a currency war on the national economy, calling for taking care of by the central bank to avoid impact.

Hashemi said (of the Agency news): The Iraqi economy unilaterally dependent on oil revenue, and also does not have either oil exports also, as a result of the deterioration of vital economic sectors in the country.

He added: You must activate the sectors of agriculture, industry, tourism and enhance the confidence of the Iraqi dinar in the States Regional and neighboring, non-dependence on the dollar, because maybe the crisis hit the dollar, and this what would cause economic problems painful for the country. / End / 8. N. P /