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Iraqi dinar and delete three zeros

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Iraqi dinar and delete three zeros

Post  Shilo on Sun Dec 19, 2010 9:33 pm

Iraqi dinar and delete three zeros

Approaching hour Declaration deletion of three zeros from the current currency (dinar) after the ripe intentions and goals and developed the initial plan may be finalized and the procedures and mechanisms the beginning of next year to be ready within the legal framework of the new Iraqi currency before being submitted to Parliament for approval.
Policy to delete the zeros is an internationally known, particularly in developing countries that have suffered from excessive levels of inflation, monetary, and was among the targets of that action is to reduce the masses of cash circulating in the economy and remove the (monetary illusion) and boost confidence in local currency and absorb inflation or to control the pace along with the goals related to supporting economic stability and control of internal and external imbalances ...
There is no doubt that the process of deletion of zeros and replace the existing currency in Iraq would aim to reduce the money supply and the disposal of monetary illusion tradition and to control inflation and the liberalization of the economy and strengthen confidence in the new currency and to create conditions to increase the value gradually and support efforts to achieve economic stability and stimulate investment and real growth, as well as to give strong signals to international institutions particularly the International Monetary Fund for Iraq's continued economic reforms and efforts to comply with the tips and the demands of those institutions. The achievement of one side or all of these goals will be governed by the nature of the development of Iraqi economy, which still suffers from imbalances, essential in its internal structures and its relations with the outside world, as well as in the management of institutions and the implementation of its short-and long-and multiple sources of the resolution and the wide base of corruption between the joints, these conditions can be partly justified For a state in the building stage after just emerging from war, destruction and chaos, but can not be justified in relation to the economy in transition for almost five years and not in front of only a few years to complete the task of building laws and institutions and get used to the behavior of management (market economy).
The process of deleting the zeroes will be part of the responsibilities of parties to the three main (central bank, the Council of Ministers, Ministry of Finance) as well as to help the International Monetary Fund, but the parties that will be involved in direct effects and indirect (negative and positive) will be mainly members of the community (the poor and a slice of staff and professionals free and the owners of capital) as well as banks and various economic sectors (public and private sectors).
Reactions that produce will be a process would be linked to the nature of the process itself (the way of shock or the style of the gradient), as well as the timing and the time frame for implementation (from 3 to 6 months or 6 to 12 months) in addition to the form of the approved policy (replacement programmer and systematic or selective response the nature of the reaction) as the respective advantages and disadvantages and the more the case Allatokd in the economy, especially in the current phase of the Iraqi economy is increasingly difficult to predict the results and also increases the difficulty of achieving the goals.
The process of deletion of zeros should take into account the set of facts related to the nature of the Iraqi economy, particularly the imbalances inherited and the adoption of the entire economy on the export earnings of crude oil and also rely almost completely to its markets on the import of food commodities and consumer goods, intermediate and capital, as well as the weak role of the private sector in the economy and the weakness of state institutions particularly government agencies (taxes, customs, regulatory bodies, market regulation, to combat economic crime ....), with reference to the importance of weakness or scarcity of expertise in financial, monetary and banking in front of the function and responsibility to catch the reins of the economy and his administration efficiently ... These facts, if the impact of the governor in the process of replacing the currency after you delete the three zeroes will be just (an administrative formality) to not be little impact in the economy but the turmoil in the markets and make way for speculators and high inflation rates, real.
The idea to delete the zeros may proceed from the Iraqi Central Bank and the Government is preparing the legal framework and after the legislation of Parliament back the government again to develop the mechanisms for implementation and monitoring and all that would be the process runs smoothly and without obstacles, and is expected to increase the functions of government in the management of the economy and increase the responsibility of the Bank CBI in the design and management of monetary policy as well as to increase the burden of the Ministry of Finance to contain the imbalances and to support economic stability ..., but the real impact might not be clear in the first period for the replacement of currency, that is, here is the value of the Iraqi dinar at the beginning and during the replacement process, and the degree of disorder expected and how it changes the structure of prices, particularly prices and the prices of basic foodstuffs, and how stock prices will change, and the most serious is the prices as the prices of transport services for self-employment, wages and salaries and wages of health education ... In addition to the allowances of rents and property prices. Initial expectations (under certain circumstances) is to direct the process of deletion of zeros and the replacement of the currency may give a reference to the strength and confidence in the new Iraqi dinar this Masidf increase the demand for the new currency (at home and abroad) and increase its value temporarily against the dollar (by factors of speculation and smuggling of currency abroad ), but soon Maithakq balance in the trading of cash upon completion of the replacement process and become the new currency trading is prevalent and frequent, ...,
The fragility of the current situation of the Iraqi economy and the strength of speculation factor in influencing prices and direct markets raises two important issues in this context: the need to adopt a gradual approach in the implementation and monitoring of prices and markets during the replacement process, as the planning and implementation of sound avoids society and the economy of unrest and violent shocks and economic chaos, especially cash transactions in a network of citizens, banks and various economic formations.
The process of deletion of zeros and the replacement of the currency would be too costly to the economy and society (was visible and not visible) and from the cost study process and cost consultancy and cost printing and cost replacement and the accompanying processes of corruption and large-scale, in addition to the cost of lawsuits and damages ... Along with the cost to support the economy during and after the replacement process.
With all these considerations should be to imagine that the implementation of the policy will be a high level of efficiency (achieving the goals the lowest costs), and as we said that proper planning and control are key in this process, Valtzawj between the new currency and old coins in a reasonable time frame would reduce the impact of the turmoil cash , as well as the importance of adopting a policy (action and reaction) during the injection of the economy in the new currency and control by circulation in the market, there are issues that are very dangerous should focus on them by the charge of this process, which by some parties anomalous exploiting this process to achieve the benefits of obscene and illegal can be an easy tool in the financing of terrorism and sabotage the economy and to influence government policy, the first of these parties are (Mafia white) which penetrated the institutions of the state for years and take advantage of laws, regulations, retaining their positions and functional networks, collaborating with them to achieve their own goals, as well as the seriousness of (the mafia black) that penetrated markets and private banking and trade with abroad, especially the owners of capital, new ..., either side of the risk of undeclared Veetmthel preparations to smuggle huge quantities of new currency abroad for speculative purposes and the purposes of (political).
Finally, we can say that the decision to delete the zeros and the replacement of the current currency will come a new Iraqi dinar, sooner or later will carry with him different reactions will not be far away from the form of the general environment in which Iraq lives .. Whatever the implications of the economic developments subsequent may be capable of addressing the particularly Maitalq of discipline fiscal and monetary policies, and the persistence of world oil prices at levels that achieve the budget is optimistic, in addition to continuing economic reforms and stimulate the private sector and attracting foreign investment and strengthen the joints of the state, government institutions and raise the living standards of citizens .

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