Print new currency one of the options that the government would resort to it to face bankruptcy
Print new currency one of the options that the government would resort to it to face bankruptcy
10/27/2015
BAGHDAD / JD / .. ruled out a number of experts and specialists in the financial and economic affairs the country’s vulnerability to financial bankruptcy in the event of continued decline in oil prices, noting that Iraq has a large cash reserve and coming to the big his business cards production and export of crude oil increases, while underlining that in the event the country’s vulnerability to bankruptcy government will resort to several options, including printing new currencies to address the crisis by the inflationary financing to create futures economic movement.
An official source at the Central Bank, said that “the country’s vulnerability to financial bankruptcy is unlikely for several reasons, including that oil prices fall, but not up to Zero, as well as that Iraq is on the verge of significant increases rates of export of oil, as well as Iraq Atlk large cash reserve from which to create development projects as it is now in the Central Bank’s program of six trillion developmental dinars, in addition to the existence of other non-oil resources can be activated such as agriculture , tourism, industry, taxes and other “, adding that” Bankruptcy is exposed to him under an international economic blockade, or states that it was fighting a major war.
“The source, who requested anonymity, told / JD /:” There are several options on the table with the government in the event that the country Financial filed for bankruptcy, including external borrowing from international banks as well as the printing of Iraqi currency and create inflation, stagflation, or the so-called funded budget to inflation, and this would convey the bankruptcy of the state to the community, as well as it will create layers in society wealthy layer and layer crushed and dramatically.
“He explained that” This option is bad because it will create a futures economic movement and located him severe accumulations, including the deterioration of the dinar exchange rate against the dollar and creates ill-high distribution of cash currency in the market becomes runaway inflation economy, the government may resort to this option, but not completely, but partially.
“The expert Alavtsada lion Mohammed Ali warned of resorting to a proposed Iraqi currency printed in the case of the country’s vulnerability to financial bankruptcy, stressing that he could not repeat the nineties of the last century, the experience of the fact that Iraq at the time was the subject of the economic blockade and the international limited currency on the local trading depending on what is sold in the markets of local produce, as well as limited Iraqi economy and then on the internal circulation.
Mr Mohamed Ali told / JD /: “Iraq today is fully dependent on import, so the reprint currency would not work in dealing with any economic problem.”
He called the economic expert to develop an effective and radical solutions from which to contain the crisis and the lack of impact on society.
For his part, an expert on financial affairs spokesman Hadi al-Tamimi, there are many solutions that can be resorted to in the event that the country’s economic crisis Kberh may lead to bankruptcy, to encourage deposits and increase profits and the granting of loans by the Central Bank in accordance with the development programs to create an economic movement, in addition to supporting the private sector and make it a competitor for a year.
He said al-Tamimi told / JD /: “The launch additional Iraqi currency into the market could be a solution but it will cause great economic inflation will have future implications for the economy and will affect the dinar exchange rate against the dollar , it is partial and timely solution to the crisis, but for a limited period not exceeding 18 months. ”
The former Iraqi regime resorted to printing additional Iraqi currency, and put on the market during the nineties of the last century, when Iraq subjected to an economic blockade of an international led to financial bankruptcy and stop the economy in the country ./anthy/ 8 /
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