Iraqi economist: decline of Euro will give Iraqi Dinar a maj

[5/30/2010]


Economist Basim Abdul-Hadi, confirmed that the decline of euro in global markets will have a positive and negative impact at the same time on Iraqi economy.

Abdul-Hadi said that the positive impact is the fact that all of Iraq's foreign reserves are in US dollar, adding that the price of the dollar against the depreciation of euro will increase the purchasing power of the dollar, which will result in importing more goods through foreign swap and exchange prices, with the same purchasing prices especially goods from European Union.

The negative impact of the decline of euro is the effect on the price of oil, though the barrel of oil is priced in US dollar, but the link between the dollar and euro as two major currencies in the global economy, leading to the possibility of lower oil prices which affects Iraqi oil exports.

He noted that the decline of euro is not sharp, pointing out that the treatment methods pursued by the European Union are promising, through pumping subsidies of 120 billion dollars.

Adding that we are waiting for the impact of actions taken by the European Union and it’s reflect on the global economy and oil prices generally, because the long-term decline in oil prices (below normal rates) would affect the Iraqi budget.

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