The dollar tempts the pockets of Iraqis to buy after its decline against the dinar.. Stability or te

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[size=52]The dollar tempts the pockets of Iraqis to buy after its decline against the dinar.. Stability or temporary decline?[/size]

[size=45]Baghdad/ Zulfiqar Yusuf[/size]
[size=45]The Iraqi citizen tries from time to time to guess and analyze the extent of the stability of the hard currency exchange rate in Iraq, and because there is a parallel market that distorts the possibility of maintaining a unified exchange rate and brings it closer to the official price, most opinions are moving towards random systems so that the citizen is at the mercy of variables.[/size]
[size=45]During the past week, the fluctuation in dollar prices has become a subject of question for market observers, as this fluctuation in prices affects the stability of the market and leads to many financial setbacks, due to instability. Meanwhile, experts and observers explain that the fluctuation in the dollar exchange rate will remain due to the popular culture of saving. And dealing with the money investment file. Economist Basil Al-Obaidi explains that “there are several factors for the fluctuation of the dollar exchange rate, including that the Central Bank increases its daily sales,” noting that “the state is following an important factor, as it is expanding the operating budget because it needs cash to cover salaries, expenses, and projects that have begun.” The Sudanese government requires expenses to operate it, in addition to the fact that the year 2024 will witness the operation of investment projects after the formation of the provincial councils.”[/size]
[size=45]He pointed out, “The cash supply is small, and in order for the government to be able to balance it, it is forced to increase dollar sales in order to collect cash from the markets.”[/size]
[size=45]Al-Obaidi added, in his interview with Al-Mada, that “there is an attractive way for the citizen, which is to display the dollar in the market and reduce its price so that the citizen is greedy to buy and takes the cash out of his home.”[/size]
[size=45]He continued by saying, “In this case, the state will not be forced to borrow from banks because the government has reached a critical point in the issue of borrowing, in addition to the fact that it will not move towards printing new money, because the current monetary mass in the country amounts to more than 80 trillion Iraqi dinars.” As the monetary supply increases, it affects inflation and prices.”[/size]
[size=45]Al-Obaidi continues, “The official exchange rate for the US dollar now is 132 thousand Iraqi dinars, while in the market the exchange rate is 147 thousand Iraqi dinars, meaning we are very far from the official price, but there is a possibility that it will continue to decline, and I believe that when the salaries of retirees and the social protection network are paid.” There will be cash among the citizens that will make them go towards buying the dollar, so the exchange rate of the US dollar will reach 145 thousand Iraqi dinars, and all of this remains within the range of the United States of America’s ability to exchange dollar cash to the country from oil revenues.”[/size]
[size=45]Observers have indicated that the current stability is due to the lack of demand for the cash dollar, and that the price of the dollar will continue to fluctuate between high and low, forcing the market to live in a state of some kind of confusion, because the hard currency constitutes an important tool in Iraqi trade, as it is a trade that depends on imports in Most of the products are available in the local market. In turn, the financial advisor to the Prime Minister, Mazhar Muhammad Saleh, explains, “The strength of the Iraqi dinar, expressed in the decline in the parallel market rates of exchange in favor of the official exchange rate, indicates a tangible success in the cohesion of the country’s economic policy with its three components: monetary and financial.” And commercial, by providing a coherent climate of stability in the general level of prices and containing seasonal price fluctuations for items in high demand, specifically providing basic food commodities that have low price elasticities of demand because they are necessary commodities associated with consumption and daily living.[/size]
[size=45]He noted “the importance and speed of customs procedures, which were represented by (reducing customs tariffs and diversifying imports without quantitative limits for necessary goods), within the performance of the financial policy in supporting price stability and ensuring the supply of food and necessary materials and commodities, and production supplies at the official exchange rate and in accordance with the requirements of the national economy, in addition to On stability in bank financing of foreign trade for the private sector, which has begun to adopt stable official exchange rates on a broad and more flexible basis.”[/size]
[size=45]Saleh added in an interview with (Al-Mada), that “the demand for foreign currency for the purposes of financing the country’s foreign trade, on the part of the private sector, is today backed by large foreign currency reserves, which are the highest in the country’s modern economic history, and which today touch approximately 111 billion.” dollar".[/size]
[size=45]The financial advisor to the Prime Minister, Mazhar Muhammad Saleh, confirms that “those high foreign currency reserves indicate the country’s annual trade efficiency of more than 16 months in imports at least, compared to the global standard for the commercial efficiency of foreign reserves, which is set at only about three months.”[/size]
[size=45]He concludes, “The accelerated progress in meeting the demand for the dollar at the official rate for the purposes of financing foreign trade for the private sector has reached advanced levels, as the demand that is currently being met for foreign currency that meets the rules of international compliance through the Central Bank window or enhancing bank balances in foreign currency has risen to More than 85% of the total domestic demand for foreign exchange or more, and this wide rise in demand rates is what has begun to rapidly reduce the gap between the two exchange rates as well.”[/size]
[size=45]He points out, “This is confirmed by the tangible improvement in the reduction of the gap and its gradual contraction between the two exchange rates until the base of complete stability is reached in the coming days.”[/size]
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I think it's the opposite. Dollars are losing value compared to the dinar. Citizens will be tempted to bring stored dollars into the banks to before they lose further value. getting dinar cash out of the homes, well that happens when the lower denoms are brought into circulation; dollars too actually. Those paying attention will bring their dollars in for exchange before the 3 zero scenario begins or lose a lot of value in dollar. First a rate change to the program rate then the 3 zeros plan begins.