[You must be registered and logged in to see this link.]
03-01-2016 | (Voice of Iraq)
[You must be registered and logged in to see this link.]
03-01-2016 | (Voice of Iraq)
By: Mohammad Reza Abbas - 02-01-2016 | (Voice of Iraq) |
announcement of the decision to reduce the value of the local currency compared to foreign currencies in industrialized countries when it comes planned economic feels the need to boost economic development, or when they feel that the economy is weak and needs a booster injection. Reducing the value of local currency encourages exports and reduce the volume of imports and thus raise the economic growth (an increase in national production) and may increase inflation (price increase rate) in the country if they are too large exports.
Inflation source may result from three sources:
• increase in the price imported goods, especially in the prices of raw materials (inflation due to increased production costs).
• increase the overall demand for goods and services due to the recovery of the export sector (inflation due to increased purchases of individuals).
• Because of the low export prices, the employer becomes not care very much about the cost of production to become more productivity, and so on, and over time it may rise Osar its products.
It remains to be high in an uncertain export volume even with the reduction in value of local currency the following for the reasons:
• elasticity of demand for exports and imports, if export demand does not change, the decline in their prices in foreign markets will not lead to an increase in the production of exported goods and will not greatly affect the balance of payments. On the whole if the elasticity of demand for imports and exports of more than 1, the reduction in value of local currency improves the balance of payments.
• state of the global economy, if the global economy is suffering from the recession, lower in local currency may not result in the desired purpose, but in the economic boom phase may lead to a rise in exports and could lead to increased inflation in the country.
Inflation size as a result of reducing the value of local currency will depend on:
• the production capacity size in the country. If the country uses half of its production capacity due to the economic recession, the increase in exports will not greatly affect the inflation rate.
• the success or failure of the owners of production in the consumer cost of production load. For example, the product's decision to reduce its share of the profits will not lead to higher commodity prices, but the insistence of producers to raise their profits will leads to an increase in the inflation rate in the country.
• If the trade unions decided not to demand higher wages, because the raw materials are not the only material used in production, but includes work as well, and in some cases the contribution of work in the creation of production outweigh the share of raw materials and so the demand of the workers lift their wages will lead to a rise in prices and the rate of inflation while Scott this layer may leads to stability in the rate of inflation.
What is the effect of the decision the central bank to reduce the value of the Iraqi dinar against the US dollar? Before answering to this question, we should know the status of the Iraqi economy. Iraqi economy prevented entering 2016 suffers from a severe Akhvad in oil revenues, obligations to pay salaries and wages and social aid and pension and aid for the displaced, including no less than eight million citizens, and the agricultural sector and industry do not represent more than 15% of national production. In other words, Iraq needs funds to cover the operating budget and needs money to buy what it needs from the goods and services do not exist in the country, dependence on imports.
Devaluation of the Iraqi dinar, the source will not benefit because there is no export to Iraq, a private industry. The measure could lead to a reduction in the value of imports because it would be higher prices within the country, which may cause an improvement in the balance of payments and an improvement in the gross domestic production figures. But all this depends on the elasticity of demand for imports, if the import is inelastic, the devaluation of the dinar will not lead to the desired goals and could lead to a general increase in prices, because most of the goods in the Iraqi market foreign-made.
I do not think that the reduction in the value of the Iraqi dinar will achieve What aspiring him a member of the parliamentary finance committee Majida al-Tamimi, which came in her statement that the action of the Central Bank "is one of the alternatives for external borrowing, and produces state insurance employees' salaries and control the size of the spending, and thus reduce the fiscal deficit" because the reduction of teams is not enough obligations of the State towards employees, it will not be a substitute for external borrowing. The state can not finance them dues without external borrowing and that as long as oil prices in global markets have not improved. Ms. Tamimi political statement more than economical. It was Prime Minister for Economic Affairs, Mr. adviser permit the appearance of Mohammed Saleh more realistic to justify the decision to reduce the dinar when he said that "the decision to reduce the value of the dinar is part of the protectionist policies taken at the financial level, but must be accompanied by measures relating to the availability of active industry with the rise in the pace of production ornaments, a substitute for the importer and meets the need of the domestic market ".
Conclusion:
• The first beneficiary of the decision is the Iraqi source.
• beneficiary will also be Iraqi product with all sorts of goods and services
• As long as that national production in the first phase, the impact of the decision will not lead to the desired economic development .
• the decision will encourage travel to Iraq and discourage travel abroad.
• likely increase in the inflation rate in the country is striking.
• the decision could lead to a cessation of foreign currency smuggling.
• the decision could lead to a halt smuggling gold out of the country.
• decision will increase the Financial government burdens when deserve Foreign upon debt, because the debt is not in the local currency, but Alajunbh currency.
• may improve the balance of payments if the import of goods and services size fell.
• the decision will not negate the need for Iraq to additional loans to pay its financial obligations.
• the decision will hurt the chip retired and living outside Iraq
• the decision will hurt the planned sale of his estates and leave outside the country.
• the decision will hurt the profits of the foreign investor in Iraq.
• the decision could lead to a decline in living standards for the Iraqi people (because of inflation).
announcement of the decision to reduce the value of the local currency compared to foreign currencies in industrialized countries when it comes planned economic feels the need to boost economic development, or when they feel that the economy is weak and needs a booster injection. Reducing the value of local currency encourages exports and reduce the volume of imports and thus raise the economic growth (an increase in national production) and may increase inflation (price increase rate) in the country if they are too large exports.
Inflation source may result from three sources:
• increase in the price imported goods, especially in the prices of raw materials (inflation due to increased production costs).
• increase the overall demand for goods and services due to the recovery of the export sector (inflation due to increased purchases of individuals).
• Because of the low export prices, the employer becomes not care very much about the cost of production to become more productivity, and so on, and over time it may rise Osar its products.
It remains to be high in an uncertain export volume even with the reduction in value of local currency the following for the reasons:
• elasticity of demand for exports and imports, if export demand does not change, the decline in their prices in foreign markets will not lead to an increase in the production of exported goods and will not greatly affect the balance of payments. On the whole if the elasticity of demand for imports and exports of more than 1, the reduction in value of local currency improves the balance of payments.
• state of the global economy, if the global economy is suffering from the recession, lower in local currency may not result in the desired purpose, but in the economic boom phase may lead to a rise in exports and could lead to increased inflation in the country.
Inflation size as a result of reducing the value of local currency will depend on:
• the production capacity size in the country. If the country uses half of its production capacity due to the economic recession, the increase in exports will not greatly affect the inflation rate.
• the success or failure of the owners of production in the consumer cost of production load. For example, the product's decision to reduce its share of the profits will not lead to higher commodity prices, but the insistence of producers to raise their profits will leads to an increase in the inflation rate in the country.
• If the trade unions decided not to demand higher wages, because the raw materials are not the only material used in production, but includes work as well, and in some cases the contribution of work in the creation of production outweigh the share of raw materials and so the demand of the workers lift their wages will lead to a rise in prices and the rate of inflation while Scott this layer may leads to stability in the rate of inflation.
What is the effect of the decision the central bank to reduce the value of the Iraqi dinar against the US dollar? Before answering to this question, we should know the status of the Iraqi economy. Iraqi economy prevented entering 2016 suffers from a severe Akhvad in oil revenues, obligations to pay salaries and wages and social aid and pension and aid for the displaced, including no less than eight million citizens, and the agricultural sector and industry do not represent more than 15% of national production. In other words, Iraq needs funds to cover the operating budget and needs money to buy what it needs from the goods and services do not exist in the country, dependence on imports.
Devaluation of the Iraqi dinar, the source will not benefit because there is no export to Iraq, a private industry. The measure could lead to a reduction in the value of imports because it would be higher prices within the country, which may cause an improvement in the balance of payments and an improvement in the gross domestic production figures. But all this depends on the elasticity of demand for imports, if the import is inelastic, the devaluation of the dinar will not lead to the desired goals and could lead to a general increase in prices, because most of the goods in the Iraqi market foreign-made.
I do not think that the reduction in the value of the Iraqi dinar will achieve What aspiring him a member of the parliamentary finance committee Majida al-Tamimi, which came in her statement that the action of the Central Bank "is one of the alternatives for external borrowing, and produces state insurance employees' salaries and control the size of the spending, and thus reduce the fiscal deficit" because the reduction of teams is not enough obligations of the State towards employees, it will not be a substitute for external borrowing. The state can not finance them dues without external borrowing and that as long as oil prices in global markets have not improved. Ms. Tamimi political statement more than economical. It was Prime Minister for Economic Affairs, Mr. adviser permit the appearance of Mohammed Saleh more realistic to justify the decision to reduce the dinar when he said that "the decision to reduce the value of the dinar is part of the protectionist policies taken at the financial level, but must be accompanied by measures relating to the availability of active industry with the rise in the pace of production ornaments, a substitute for the importer and meets the need of the domestic market ".
Conclusion:
• The first beneficiary of the decision is the Iraqi source.
• beneficiary will also be Iraqi product with all sorts of goods and services
• As long as that national production in the first phase, the impact of the decision will not lead to the desired economic development .
• the decision will encourage travel to Iraq and discourage travel abroad.
• likely increase in the inflation rate in the country is striking.
• the decision could lead to a cessation of foreign currency smuggling.
• the decision could lead to a halt smuggling gold out of the country.
• decision will increase the Financial government burdens when deserve Foreign upon debt, because the debt is not in the local currency, but Alajunbh currency.
• may improve the balance of payments if the import of goods and services size fell.
• the decision will not negate the need for Iraq to additional loans to pay its financial obligations.
• the decision will hurt the chip retired and living outside Iraq
• the decision will hurt the planned sale of his estates and leave outside the country.
• the decision will hurt the profits of the foreign investor in Iraq.
• the decision could lead to a decline in living standards for the Iraqi people (because of inflation).
[You must be registered and logged in to see this link.]
Yesterday at 9:31 am by Rocky
» MM&C 5/9/24 The Federation of Chambers of Commerce and the European Union discuss cooperation to fin
Yesterday at 9:27 am by Rocky
» MM&C 5/9/24 Customs, security and economic aspects
Yesterday at 9:24 am by Rocky
» Union of Arab Banks: Iraq's environment encourages investment
Yesterday at 6:57 am by Rocky
» Government advisor: Movement to recover bad debts for the benefit of the Iraqi Trade Bank
Yesterday at 6:55 am by Rocky
» The International Development Bank announces the opening of its new branch in Erbil
Yesterday at 6:52 am by Rocky
» Oil seeks to convert refinery products to “Euro 5”... high quality and environmentally friendly
Yesterday at 6:50 am by Rocky
» Budget delay: the cry for help for paralyzed services and disrupted dreams
Yesterday at 6:47 am by Rocky
» Oil: Completion of projects to improve the quality of petroleum products, and others are under imple
Yesterday at 6:44 am by Rocky
» Chairman of the Securities Commission: 3 million shares, average daily trading volume
Yesterday at 6:43 am by Rocky
» Tamim calls on the countries participating in the meetings of the Arab Administrative Development Or
Yesterday at 6:41 am by Rocky
» Parliamentary Endowments: 39 thousand pilgrims, Iraq’s share, and waiving the religious obligation i
Yesterday at 6:39 am by Rocky
» Washington refers to Iraqi legislation that “does not harm” his international presence, and Baghdad
Yesterday at 6:34 am by Rocky
» Deputy: Extending the legislative term depends on sending the budget schedules
Yesterday at 6:30 am by Rocky
» Parliamentary Legal: 88 draft laws on the parliamentary shelf
Yesterday at 6:29 am by Rocky
» The head of the movement denies any Iraqi-American negotiations to remove the coalition
Yesterday at 5:23 am by Rocky
» A deputy expects to resolve the issue of electing the Speaker of Parliament next week
Yesterday at 5:22 am by Rocky
» Obtaining the approval of the Minister of Electricity to fill the energy shortage in Dhi Qar
Yesterday at 5:21 am by Rocky
» Economist on the decline in dollar prices: My time and it will not reach its official price
Yesterday at 5:20 am by Rocky
» The Iraqi Ministerial Council for National Security approves the 2024-2028 strategy
Yesterday at 5:18 am by Rocky
» Mulla Bakhtiar: Nechirvan Barzani's visit to Iran melted the ice between Erbil and Tehran
Yesterday at 5:17 am by Rocky
» Password "78"... Why did the Sudanese government's interrogations and noisy sessions decline?
Yesterday at 5:16 am by Rocky
» JP Morgan forecasts an increase in the oil capacity of Iraq and other countries in 2025
Yesterday at 5:15 am by Rocky
» Turkish Minister of Transport: The development road will cost $20 billion
Yesterday at 5:13 am by Rocky
» The Supreme Committee for Reconstruction and Investment approves a package of strategic projects
Yesterday at 5:12 am by Rocky
» Work: Preparing a unified national strategy to create job opportunities for youth
Yesterday at 5:11 am by Rocky
» The Prime Minister's financial advisor reduces the risks of the budget deficit
Yesterday at 5:10 am by Rocky
» Sudanese announces the signing of an agreement with Japan to finance small and medium enterprises in
Yesterday at 5:09 am by Rocky
» Government Advisor: The Securities Commission represents the governance base for promoting financial
Yesterday at 5:08 am by Rocky
» A unified national strategy to create job opportunities for youth
Yesterday at 5:07 am by Rocky
» A one-week deadline to decide the position of Speaker of Parliament
Yesterday at 5:06 am by Rocky
» Parliament: We coordinate with the competent regulatory authorities to examine medicines
Yesterday at 5:04 am by Rocky
» The Commission suspends the Kurdistan Parliament's voting procedures
Yesterday at 5:03 am by Rocky
» $100 million to localize the pharmaceutical industry
Yesterday at 5:01 am by Rocky
» Increase in external remittances at the Central Bank
Yesterday at 5:00 am by Rocky
» A government advisor reduces the risks of a budget deficit
Yesterday at 4:54 am by Rocky
» Culture: We seek to invest in the stability of the country to advance the tourism sector
Yesterday at 4:53 am by Rocky
» Integrity announces the results of a questionnaire on bribery in real estate registration department
Yesterday at 4:50 am by Rocky
» Parliament comments on Sudanese plan to restructure the government apparatus: It needs radical refor
Yesterday at 4:49 am by Rocky
» The dollar rises again against the Iraqi dinar in Baghdad
Yesterday at 4:45 am by Rocky
» Politician: The government does not deal transparently with the issue of expelling the Americans
Yesterday at 4:43 am by Rocky
» A government bank participating in an accounting project
Yesterday at 4:42 am by Rocky
» Masrour Barzani: The Kurdistan Regional Government has implemented all its obligations and duties
Yesterday at 4:41 am by Rocky
» French Consul: France strengthens relations with the Kurdistan Region
Yesterday at 4:39 am by Rocky
» Studies Center: Sudanese faces the challenges of maintaining sustainable relations with the United S
Yesterday at 4:38 am by Rocky
» “The absence of democracy is not possible.” The federal government remains silent on the postponemen
Yesterday at 4:37 am by Rocky
» Taqadum Party: The absence of the Speaker of Parliament disrupted the general amnesty law
Yesterday at 4:36 am by Rocky
» The file of oil export through Turkish territory is under the control of politicians
Yesterday at 4:33 am by Rocky
» For the sake of the position of president and the budget schedules... there is a preference for exte
Yesterday at 4:32 am by Rocky
» “If you bring the equipment, let’s begin.” Revealing the secrets of Erdogan’s visit to Iraq and the
Yesterday at 4:31 am by Rocky
» Parliamentary moves to approve the Human Organ and Tissue Bank Law
Yesterday at 4:29 am by Rocky
» Electricity embarks on an 11-axis plan to develop the energy sector
Yesterday at 4:27 am by Rocky
» Al-Asadi announces work on legislating a law on occupational health and safety
Yesterday at 4:26 am by Rocky
» Al-Rasheed: Increasing the amount of loans for restoration and maintenance of buildings to 50 millio
Yesterday at 4:25 am by Rocky
» Under the chairmanship of Al-Sudani, Reconstruction and Investment agree on projects related to elec
Yesterday at 4:24 am by Rocky
» Baghdad and Tehran.. New discussions regarding railway connectivity to transport visitors between th
Yesterday at 4:23 am by Rocky
» Immigration: Our plan focuses on the voluntary return of displaced persons and rejecting their house
Yesterday at 4:22 am by Rocky
» An Iraqi trade delegation in Iran to facilitate the export of agricultural crops to Iraq
Yesterday at 4:21 am by Rocky
» Sudanese launches work on the Union Mills Project in Babil Governorate
Yesterday at 4:19 am by Rocky
» Parliamentary demands to resolve the selection of the Speaker of Parliament next week: So far, there
Yesterday at 4:18 am by Rocky
» Sudanese inaugurates a sugar production factory expansion project and three other factories
Yesterday at 4:17 am by Rocky
» Al-Sudani confirms the unlimited support from the government to develop the success story in the pri
Yesterday at 4:16 am by Rocky
» From Babylon... Al-Sudani announces the referral of the large Hilla sewerage project, phase two, to
Yesterday at 4:15 am by Rocky
» Al-Sudani: The factories that opened in Babylon provide more than 4,000 job opportunities
Yesterday at 4:14 am by Rocky
» A representative calls for the payment of lucrative compensation to farmers after the flooding of wh
Yesterday at 4:13 am by Rocky
» Government Advisor: The Securities Commission represents the governance base for promoting financial
Yesterday at 4:12 am by Rocky
» utube MM&C 5/7/24 Iraq Dinar- IQD Update - Regional Trade - A Progession of Reforms - A Global Bac
Wed 08 May 2024, 6:53 am by Rocky
» MM&C The Iraqi Private Banks Association told NEWS: These are the results of the Prime Minister’s me
Wed 08 May 2024, 6:52 am by Rocky
» After a break of more than 9 years.. the resumption of a government trade meeting between Iraq and A
Wed 08 May 2024, 6:51 am by Rocky
» Deputy: The general amnesty law will be passed
Wed 08 May 2024, 6:46 am by Rocky
» A change in the fuel smuggling map... “control” over the central ports and “laxity” in the north
Wed 08 May 2024, 6:43 am by Rocky
» Al-Sudani takes three urgent decisions to block the wheat mafias in Iraq
Wed 08 May 2024, 6:41 am by Rocky
» Electricity embarks on an 11-axis plan to develop the energy sector
Wed 08 May 2024, 6:39 am by Rocky
» “Thug and smuggler.” A female representative talks about a crocodile in Parliament blackmailing exec
Wed 08 May 2024, 6:37 am by Rocky
» Al-Sudani told the US State Department: Iraq is keen to strengthen its democratic system
Wed 08 May 2024, 6:36 am by Rocky
» The Central Bank sells more than $275 million at auction today
Wed 08 May 2024, 6:34 am by Rocky
» The Minister of Commerce stresses the observance of the Iraqi standard in the supply of goods
Wed 08 May 2024, 6:33 am by Rocky
» The Iraqi Trade Bank announces its participation in the process of localizing the salaries of Kurdis
Wed 08 May 2024, 6:32 am by Rocky
» Iraq adopts an advanced system to combat money laundering and terrorist financing
Wed 08 May 2024, 5:25 am by Rocky
» Increase in Euphrates River levels due to Turkish water releases
Wed 08 May 2024, 5:22 am by Rocky
» Demands the need to legislate the capital law
Wed 08 May 2024, 5:21 am by Rocky
» Parliament decided to extend the legislative term by one month
Wed 08 May 2024, 5:20 am by Rocky
» A bank participating in the process of localizing the salaries of employees in the region
Wed 08 May 2024, 5:18 am by Rocky
» Parliamentary request to the Ministry of Finance regarding defense mobilization dues/document
Wed 08 May 2024, 5:17 am by Rocky
» Dollar prices in Baghdad and Kurdistan today
Wed 08 May 2024, 5:16 am by Rocky
» Al-Rasheed decides to increase the ceiling for granting “construction” loans to 75 million dinars
Wed 08 May 2024, 5:14 am by Rocky
» A government plan to expand the construction of water harvesting dams
Wed 08 May 2024, 5:12 am by Rocky
» Frozen or banned? An Iranian official reveals the fate of Tehran’s money in Baghdad
Wed 08 May 2024, 5:11 am by Rocky
» The Iraqi Trade Bank participates in the process of localizing the salaries of Kurdistan Region empl
Wed 08 May 2024, 5:10 am by Rocky
» Finance confirms the Iraqi government's desire to benefit from the expertise of French companies
Wed 08 May 2024, 5:09 am by Rocky
» After targeting its branch in Kurdistan... Dana Gas announces a decrease in its profits to $38 milli
Wed 08 May 2024, 5:08 am by Rocky
» A parliamentary understanding to extend the legislative term to approve the 2024 budget schedules
Wed 08 May 2024, 5:08 am by Rocky
» Stopping the Commission’s procedures regarding the region’s elections
Wed 08 May 2024, 5:06 am by Rocky
» Foreign oil companies violate Iraqi laws
Wed 08 May 2024, 5:05 am by Rocky
» The position of Speaker of Parliament depends on the political agreement
Wed 08 May 2024, 5:04 am by Rocky
» The Ministry of Finance decides to send the April salary to the Kurdistan region
Wed 08 May 2024, 5:02 am by Rocky
» It did not reach the Council.. Parliament determines the mechanisms for dealing with the 2024 budget
Wed 08 May 2024, 5:01 am by Rocky
» 88 projects awaiting resolution.. What will happen to the stalled laws in Parliament? - Urgent
Wed 08 May 2024, 5:00 am by Rocky
» Al-Sudani receives the US Undersecretary of State
Wed 08 May 2024, 4:59 am by Rocky