Interview: CBI adviser Mohammed Saleh discusses new currency and deleting zeros
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Central Bank of Iraq adviser to the appearance of Mohammed Saleh / private dialogue
* What is the secret behind the disappearance of currency in small denominations of 50 fils and 100 fils with low inflation in Iraq?
- The monetary system in the unit of currency is the dinar, dinar consists of 100 fils 0 This unit is the foundation and build the system Cash In Iraq As the historic Select the dinar is equal to 3 dollars This situation prevailed To 1979-1980 Since the entry into Iraq Iran-Iraq war Started Show for the first time currency exchange rates in black Iraqi dinar began to decline in value of Foreign Affairs and, referring to the Iraqi dinar and the currency values have a common external and internal value are subject to the internal level The general price Interior and the currency value is inversely proportional with the general level of prices higher The general level of prices the value of the currency to deteriorate Value is the foreign exchange rate of the Iraqi dinar to the dollar of foreign exchange and other, and this Also Began to deteriorate The values of the currency moved in a single line towards the deterioration of the financial system of payment of cash transactions Be in different forms Currency transactions of small-small and large transactions will be through the CHEC)
But Iraq, by virtue of its inception by its Third world country Dependent on cash transactions As in 1980 was the biggest currency of 25 Iraqi dinars, which is equal to the then 75 U.S. $ And (cable and dirham) All of these are the currencies of the purchasing power with them, although they are simple fractures of the currency because of economic decline and the deterioration of the domestic production that in turn reflected the inability of the supply of real goods and therefore in great demand here and spend A large and significant borrowing Greater than the force that the structure of supply, where supply fell because of the war and the deterioration began the rise in prices, the value of internal and external value of the deterioration of the Iraqi dinar exchange rate, noting that there Workers Are the reasons behind the deterioration of the Iraqi currency. D
* Rate of inflation stood at more than 50% in Iraq
Since 1991, as Iraq was going through hyperinflation Per more than 50% causes Formed by the inflation The budget resources are few During the siege and have high requirements The then Government to release the cash and documents And thus The value of the currency to deteriorate because of the lack of product supply in Iraq, the expansion of cash In 1980 from 25 billion to 60 trillion dinars In 2003, which was a replacement of the currency and this has made the purchasing power of the currency is not worth either the time being We have concluded that the largest category is the currency of 25 thousand dinars, which is equal to 22 dollars and this is a big difference shows that there is inflation
* Sings inflation Alognea crush the poor and the hard-line policy must be to raise the interest rate of the true value of the dinar
Inflation sing The rich that is crushing the poor monetary policy has been successful in achieving its goals and its key objective is to contain inflation and Alisar It is a policy followed in the Central Bank in its Over the past three years followed strict policies This tightening in the trends over the The first nominal interest rates were raised to give the real value of the dinar which is the value of real and not illusory, but commensurate with the force and the Iraqi economy as the Iraqi economy must achieve a separation in the budget of any external balance of payments has become the largest export of the imports and therefore Be a surplus This is Large reserves in the budget of the Central Bank Where
* Central reserves of foreign currency is Approximately 50 billion dollars
The reserves Central foreign currency Approximately 50 billion dollars But after the fall was not to exceed two billion dollars to this fact we have started raising the external value of the Iraqi currency This was to improve the Iraqi dinar exchange rate by 25% and raised the Interest rates so that the value of the Iraqi dinar This led to the reduction of inflation (base)
* For the first time in the history of Iraq as the level of inflation after 30 years rising to one decimal
Inflation and the inflation index is the same year just delete it Paragraph Fuel because it is unstable UNSTEADY and it dropped from 34% in 2007 to the day for the first time in the history of Iraq as the level of inflation after 30 years rising to places where one had fallen in the past few days to 4.5% and rose to 7.5% Guarantees and fluctuates, but the one decimal place, and this is the success of monetary policy In the bank and to the Prime Minister, "as described"
Q: Is there a specific period for the lifting of the zeroes and Asaddaramlp new
And small groups have ended in front of such waves from inflationary transactions, therefore, we must re-characterization of monetary unit Again through the issuance of currency Represented by the lifting of the zeroes A strategic policy adopted by the Central Bank currently Strategies within the But we (cook Cook).
The period in which The Iraqi dinar Increase in the value of There was a demand for the dollar and this is Remarkable for the attention and puts us in a surprising we had a question why Ikabbalkm traders to buy this? He answered My request to the dollar daily trading easier for me Because the $ 100 The paper is the equivalent of one 120 thousand dinars This became clear to us There The cost of transactions due to the cost of currency And counting, sorting, and other fraud in addition to inflation of about two to three of these dangerous Absence of categories of currency Commensurate with The reason for all this part of the causes of inflation, which is happening in forms
* Politicians opposed and fearful of the new monetary Ndham issue of race
The process of lifting of the zeroes and the issuance of new currency citing delayed The first reason is Intervention and the reluctance of some political actors in the government of the issuance of a new monetary system is the apprehension of illegal and we asked The issuance of a large group."
He pointed out that the Political They said that there would be inflation and this is not true because if the large groups, speaking on inflation We passed a very small groups of inflation and the removal of this case is Saiklogip does not mean anything and Iraq a strong and successful political Monetary policy in the apprehension of illegal, if the alternative, which was approved by the Economic Commission in a timely manner We endorsed the This problem, the Economic Commission of the Council of Ministers as the largest of the Commission to draw up alternative policy of deleting the zeroes "The Finance Minister Bayan Jabor, the proponents of this project".
The second reason is to be public education and we continue to educate the public, who are Importance On the issuance of such currency We need the legal frameworks and legislation that protect the rights of citizens, some of which may be a fraud such as counterfeiting of currency due to conversion and thus lose their rights with the understanding that rights are not lost because the change does not change my name change to the purchasing power in the purchasing power of wealth.
But we are afraid of change, to sort out some of the suffering of the switch and Astav workers at the Central Bank Service in the form of issuance of the Turkish experience to learn about and study what are the problems and constraints experienced during the lifting of the zeroes of its currency and that the Turkish experience That have been studied, he said, adding that there should be a creation of the logistics of the design of the currency and the currency will be bilingual Arabic Under the constitution, Kurdish and Iraqi Kurdistan part of Iraq and the Kurds the right of the citizen and the fact that this currency is the currency also.
This issue was succeeded by technicians at the central bank and there was no urgency on this experience, because we need to be timely
Issued in order to achieve success so that the people fully informed on this currency The draft Tend the idea gradually.
* To be the willingness of banks to receive the new currency
There is a generation of young people not proficient in the use of coins (Alkjons) and at the same time banks must be ready to receive
Promise in terms of storage and as you know, at present we have a mass of cash in the market is estimated (21) will be shortened to one trillion 15 billion, and this needs to be Study of all aspects, because there are values Social impact on the This version that the Iraqi dinar is covered 100% of foreign currency a day on which the dinar holders purchasing power Good He pointed out that in the nineties The paper carries no cash value (paper journals) Because of the economic setback at the time for that Must be on the citizen to know and did not feel that the currency has no value with the currency of the current Iraqi They have value and purchasing power, believing that the reserve currency may be stolen and this behavior does not exist In Iraq Will not be repeated today the central bank On the attribution of the Iraqi currency you 100% today with Iraq and foreign at the same force Therefore, the preferred currency of the national currency and an honor to be Iraq.
* In response to our question about the scrap, which was published in 2006 and a road accident Basra
This, he said the currency issued In 2006 We at the Central Bank of factors, we then Did not agree on the issue, but there was great pressure from the Iraqi prime minister in the previous period The This scrap of Balkhmsin hundred dinars and the dinars paper (Kjons) metal in a timely manner and we are shown to the prime minister, said the Iraqi economy was not ready to issue currency, and dealt with Need to educate the public around This is part of a large project Pointing out that it was a hasty and ill-received by the public and not accompanied by an incident Against security force personnel at the central bank to discourage bringing these containers loaded with the currency (scrap) From the port of Basra killed four martyrs of the impact of the protection of security Central Bank and the theft of One of the containers, adding that the four martyrs Followed with actions taken by the State's legal rights granted to them as martyrs, either the container has not been recovered, a value not Scrap it He pointed out that the scrap was not distributed storage in the Central Bank and will be sent to the Ministry of Industry and Minerals.
* The resentment of some of the parliaments of the method used for the daily auction of Central Bank
The resentment of some of the parliaments of the auction method used daily to the Iraqi Central Bank responded The monetary system in Iraq, the dinar protector protector protector of the rights of foreign currency that the bank's daily auction, leading to the first three purposes of foreign trade financing to the private sector financed by the auction of foreign currency, the central, not the government because the government has not funded this work is the work of trade finance bank.
Many of the retirees Living on Iraqi territory Iraq and the transfer of funds to them abroad Many of the Iraqis have the right to their money abroad, but we are a central bank Provided that pass through And put in front of the law against money laundering, money, crime, terrorism, the bank has no option other than this Any law Nothing in the Iraqi currency did not go through this law is the smuggling of funds and the members demanding the means to prevent foreign exchange inflows (and frankly, stop) This is us back to the former totalitarian regime We know they have something important to know that today is economic liberalization sacrifices We know Not all be transferred to serve the country abroad, some of it for personal interests as private funds and has the right to dispose of
One of our employees, we check in the bank and the prosecution that there were economic crimes We Nstguenaha With all the security in the country and this issue can not be compromised by the work of the Central Bank led to the stability of the dinar for the sixth consecutive year For the first time after 35 years, we do not want the officials in parliament Or any government, whether to leave the interest of the country and see the work and stop talking, which makes no sense, we are asking them to substitute for the auction and we Are ready to offer an alternative non-auction are ready to study and interact with All the energies available to us, we are working Do not matter and that the alternative meaning of the criticism is not justified and I hope it ends that we have liaison relationships with all Vlieradwa Alternative programs, he Some of the statements we have heard from government officials, we decided to scrutinize transactions more bureaucratic This scrutiny Led to the deterioration of the Iraqi dinar by 5% during the 24-hour We are aware we have built for a period of five years by 25% Only if we continue to hit the Iraqi dinar The Iraqi market Insensitive and do not bear the If he believed that Central Bank reserves are high are not high in Algeria, Iraq's reserves against reserves amounted to 125 billion dollars and the fear of an economic crisis or other and that there was a cost must be prepared for any emergency that countries such as the situation in Iraq remains fragile, its development must be large reserves Taathot If the central bank reserves in the global financial crisis and the power of Iraq to back to square one of the economic collapse of the dark period Days of corruption Where Did not mention one of the Central Bank of strength and the strength of Iraq's reserves that sustain the market And stability in the time where the world was deteriorating and the economy thrive."
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thanks much for your input