Decline in the Iraqi dinar after the U.S. withdrawal
Translated by Iraqdirectory.com - [1/2/2012]
After the stability lasted about five years, volatility has returned to the Iraqi dinar exchange rate for reasons considered by economists to reflect the withdrawal of U.S. forces and political turmoil, but that the central bank considered it a bubble behind them beneficiaries and speculators.
Immediately after the announcement of U.S. troops that last soldier will be out of Iraqi land towards the Kuwait base, followed by the outbreak of internal political differences. The Iraqi dinar fell against the dollar by 17 points, after it had maintained its value against other currencies for more than five years, at a flat rate did not extend past the barrier 1117 dinars to the dollar.
The security situation
The director of the «Al-Jamaal» company Foreign Exchange Jamal Ajili told «life, that the current exchange rates between 1225 and 1227 dinars to the dollar, attributing the cause to a record high of demand on the dollar, pointing out that« most of the citizens rushed to transfer what they have to cash in local currency to other currencies, especially the dollar ».
He said: «because of the many crises that have gone through it from wars and economic sanctions and instability, made him more like a sensor, watching the Iraqi citizen security and political conditions, and once an imbalance was quick to store food and fuel, but this time directed towards the dollar, knowing that the private sector is in control and not the government that ran the entire business in the country, as it will be easier to store a small amount of dollars with a higher value, instead of the dinar ».
The record auction to sell the currency at the central bank two days before the sale of $ 243 million, this means that the average purchase rose twice for the last few weeks, as no more than $ 125 million. Iraq has the critical mass of Iraqi dinars over the 32 trillion dinars, and seeks to replace its currency with a new one after deleting three zeros from them.
The deputy governor of the Central Bank Mudher Mohammed Saleh: «bank is not worried about trading the local market, they are not anything compared to auction currency that maintained the sale price fixed for more than five years, and that the bank sought to cover the value of the dinar to $ 57 billion, more of 110 percent of the size of the Iraqi monetary bloc, and this enhancement factor to the value of the dinar ». He added: «We have a reserve sufficient to repel any tricks performed by speculators, and warn them from doing this by passing any suspicious transactions».
He continued: «the issue of control over the trading of this type, the Bank monitors the work of private banks and financial companies approved, but it is impossible to censor traders banking and financial transfers to the outside, being in large quantities, and the similarity of their names and work». He added: «on banks to help us, as some shops do not operate under the law and regulations».
The economic expert and academic Mahdi Aldwai told «Al-Hayat» that «these oscillations in the Iraqi market due to political reality, there is a U.S. withdrawal and the tensions of political accompanied it, and led to a decrease rate of the dinar» However, he stressed that «there are things economic, economy Iraq is not affected by the global crisis and there is a strong cover of currency auctions and the central bank, is what makes our market is immune from the strong fluctuations ».