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Experts: Delete the zeros from the currency will raise the value, Lead to revaluationPosted

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Experts: Delete the zeros from the currency will raise the value, Lead to revaluationPosted

Post  MamaEhrhardt on Mon Dec 06, 2010 10:18 am

– Dr. Hilal Al-Tahan, economist

Note: An article very similar to this news story has been posted on Currency Newshound. However this particular article uses the word “revaluation” in Dr. al-Tahan’s quote. I thought it was interesting and wanted to share it with you. It is very difficult to find an article speaking of currency revaluation and iraqi dinar in the same context. Enjoy!

Delete the zeros of the Iraqi currency of the important issues of concern to economists at the present time and this made the call Central Bank Governor Sinan al-Shabibi to come to the House of Representatives at its yesterday to discuss this issue, members of Parliament have discussed with the Governor a number of economic aspects of interest to the public sphere

In addition to (deletion of zeros) of the Iraqi currency in and out, with a nominal value of cash and keep Bakimiteha purchasing. Adviser to the CBI the appearance of Mohammed Salih said: The current year will witness the launch the process of removing zeros, stressing that the bank has completed 50% of the preparations that are working on since 2005.

And added to the Agency for News: The strategy is based on the principle of gradual substitution of the Iraqi currency with another, less three zeros, and pointed out that the positives of this strategy is that it will be less expensive and easier to trade. He continued that the deletion of zeros from the Iraqi currency will depend on the long-term monetary policy.

And between valid: that this step requires legislation and laws before embarking upon as part of currency management strategy in Iraq.

Appearance and confirmed the need to delete the zeros come from the Iraqi monetary bloc, which has become too large a product of inflationary phase lasted about 30 years rose from 25 billion to 21 trillion.

He noted the appearance of: to be the largest category of cash is 25 thousand dinars, equivalent to $ 23, while the largest category during the year 1979 and the period preceding the war, the Iran-Iraq 25 dinars equivalent to $ 75 at the time, but today, the biggest Iraqi faction of 25 thousand dinars is not equivalent to only $ 23 with the smallest currency we have is 250 dinars, and will allow the deletion reducing the size of the cluster of cash currency, ie, that the paper of a thousand dinars turn to one dinar, and this means reducing the 21 trillion dinars to 15 billion dollars with coins, metal, and small groups.

And Saleh said: “The strategy that purports to Central taken” in line with the Constitution and the economic life of good and facilitate intra-group transactions, “pointing out that” part of the margin of the inflation rate of between 1-3% is the responsibility of the large number of cash representing the cost of transactions in the case of the deletion will be reduced that cost. “

And about the continuing high prices despite the official figures which show a decrease in the rate of inflation Saleh pointed out that “monetary policy is not concerned to re-price to the first box, but its goal to reduce rates of increase in prices, which were approximately 32% in 2007, and today dropped those increases to arranged to one decimal place around 7% only, “saying the number” a victory for Iraq’s economic program, where there are no important central Iraqi stability only in the general price level and stability of the financial system. “ He pointed out that the bank will issue treasury transfers of $ 3 trillion dinars during the next few days, to cover the contracts of electricity through the legal cash reserve which is maintained for the benefit of banks.

For his part, said economic expert, Dr. Hilal Al-Tahan, that the application of such a strategy will not cause economic turmoil, or damaged in the local market at the present time.

Stressed the economic and academic: to the process of deleting three zeros from the Iraqi currency will lead to a revaluation, noting the need to follow the policies of quiet to convince citizens and getting used to it for a period not exceeding two years.

The economic analyst said Reza Ragheb Blibl The timing of the launch of this strategy is not appropriate now, and the country’s economy must be in a position of strength before the application of those changes.

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