Will the Central Bank deal with the depreciation of the dinar?

Will the Central Bank deal with the depreciation of the dinar?

30.05.2013


At the door of the Rafidain State hundreds of citizens stands in a long line to buy the dollar after the Bank per allowed the Iraqis intended to travel by buying $ 5,000 price supported by the CBI and the value of 1,900 dinars to the dollar.

The Iraqi dinar has been a significant decline in the dollar's value returned by economists and experts in regard to the political and security factors and financial because of the resurgence of the dollar smuggling out of the country.

The Central Bank sold every citizen intends travel $ 5000 price of 1,900 dinars for each dollar in exchange offices sell price of 1126, but currency brokers and exchange offices invested the opportunity to obtain hard currency.

The game by these is sending a group of citizens to the State banks to replace the currency in Exchange for giving them a Commission of $ 100 for each replacement.

"Talk" explored a number of citizens who come daily to the banks, many of whom said that "travel features that allow them to exchange with the price and that of forged banking provided by Bank staff to highlight to approve purchase of 5,000 dollars."

Adds many of these mostly poor class, "the owners of the exchange offices give us dollar purchase amount to not have this amount and later we returned them to the dollar against us $ 100 for that process."

Economic analyst Majid mock the "deterioration of the dinar exchange rate against the dollar is due to many factors, including political, security and financial management in the country."

And "adds that" the Central Bank a few months ago was selling between (50-150) million dollars per day, but soon demand for dollars increased sale to 400 million dollars per day.

Mock said that "security situation tense and complex political situation pushed by many traders and capitalists to shift their money out of the country and switch their money from dinar to the dollar for fear of collapse of the dinar.

Some non-Iraqi firms operating in the country decided to shutdown its staff and flown out of Iraq because of those situations.

Says a Turkish company that specializes in building houses in Baghdad that "the mother company in Turkey decided to withdraw all Turkish workers on the background of the crisis conditions in the capital and the return of the bombings.

"Our work in the past two months has seen a recession because of the lack of construction projects by the Iraqis."

The problem facing the Forex market in Iraq are not subject to certain controls, very simply anyone can in Baghdad and other Iraqi cities get the dollar through hundreds of unlicensed banking companies or through several owners on pavements, and doesn't cost much.

Kathem Jasim, acknowledges his small office in Mansour district in Baghdad, that his work is not subject to oversight by a Government or Central Bank.

He says that the "license by the Bank requires a lot of official approvals, subject to favoritism for this preferred to work without a license for seven years."

Parliament committees integrity and finance are part of the responsibility for the deterioration of the dinar exchange rate on the Central Bank for being the Executive in charge of financial policy in the country.

Accusations of Deputies centred on the management of the Central Bank, and procedures that do not rise to the level required by the national economy by some expression.

Member of the integrity Commission in Parliament, MP Javad alshahili said "after replacing former Bank Governor known for his integrity and experience Sinan Al-Shabibi began the dinar exchange rate against the dollar to decline and worse than the past, the new management of the Bank has been unable to control the smuggling of currency".

Alshahili confirms that its Central Bank policies pursued under the new Bank Governor Abdel Basset Turki initial reports decline in monetary policy, "there are corrupt officials in the Bank must be held accountable."

Member of the Finance Committee in Parliament, Al-Tamimi, Magda predicted continued decline of the dinar against the dollar, and attributed this to the cooperation between the economic and financial institutions, and lack of control on imported ministries, such as health and trade.

With regard to the reported smuggling of huge amounts of dollars abroad confirmed that "dollar smuggling currently dealers for documents and forged papers, fake goods."

The Central Bank had already tried months ago to put an end to the phenomenon of increasing demand for the dollar and the enactment of new regulations to stop the conversion of dollars out of the country when it demanded all banks and finance companies to provide official documents about dollar conversion transactions, close unlicensed banking shops.

The Economist named Antoine summarizes the causes of deterioration of the dinar by three essential factors, the most important tense political situation, the return of violence, and weak monetary and fiscal policies.

Antoine says "should" re-examine financial policy and financial reforms including the sectors of banking, investment and private sector promotion and addressing administrative and financial corruption in the country. "



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