Capital flight is a burden on the balance of payments

Capital flight is a burden on the balance of payments



5/14/2017 0:00

Baghdad / Emad emirate
constitute a financial crisis disorders lead to significant negative consequences for the economy, as reflected in the value of the currency , including causing an imbalance in the domestic payments system, and spoke of banking crises due to poor allocation of resources and poor utilization and the occurrence of a certain degree of corruption, leading to the deterioration of the exchange rate currency and increase inflation. Economic academic d. Qusay Jabri between in an interview with the "morning" that the pressure inflicted on the currency during the financial crisis period is a burden on the banking system in general, explaining that the banking system 's ability to carry depends mainly on the degree of support for foreign domestic banking obligations reserves, and the government have to make a formal reduction of in the value of the currency, causing a decline
in stock prices in addition
to Matsulth interest rate changes
leading to a decline in foreign investors.
Jabri pointed out that the interest rate begins to rise until the peak arrives ahead of the crisis, and could be the interest rate increase reflects tight monetary policy made by the monetary authorities to limit credit policies as well as to stop the local currency into foreign currency, indicating that the high interest rate pushes investors to abandon securities in their possession and the deposit of its value in the commercial banks to benefit from the interest rate is tempting to lead to an imbalance in the financial market in a recession which often precedes the occurrence of the banking crisis could push recession financial market investors to shift their money n Ho other assets, and in many cases accompanied by a stock market crash in the asset market corrections.
He Jabri that capital flight towards the outside would be a huge burden
on the balance of payments, especially
if accompanied by weak rates of
economic growth and declining
exports, adding that the impact on the trade balance will reflect a negative impact on the balance of payments.
He suggested that with the emergence of the banking crisis , the growth of deposits and credit decreases
shall decline in deposits more pronounced in countries where the contribution of a few foreign banks with the presence of government - owned banks.
Economic Academic d. Falah Hassan Thuwainy in turn , said the "morning" that economic openness, in the conditions of globalization and Maerafgaha of the liberation of Mali is a precaution after lock long, weak administrative and banking experience dealing with new variables and the lack of assessing
and managing credit, weak supervision and banking supervision, leads to get loans short - term external consumer in the areas of real estate or (as in the crisis , Southeast Asia 1997).
Among Thuwainy that banking crises occur as a result of macroeconomic disturbances, explaining that the shock caused by the deterioration of the terms of trade as well as inflows and fluctuations in the rates of inflation and the rule of macroeconomic recession , affecting the economic and banking situation in particular.
And went on to economic instability leads to the entrenched state of uncertainty , which confuses borrowers see discrimination in terms of the degree of safety of banks, when it will expect depositors that all banks are in serious condition, generates a state of the banking panic.

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Capital flight is a burden on the balance of payments


Baghdad Journal News

Financial crises pose disorders lead to significant negative consequences for the economy, as reflected in the value of the currency, including causing an imbalance in the domestic payments system,

He said academic economist, d. Qusay al-Jabri told the "morning" seen by "Journal News", that "inflicted on the currency pressures during the financial crisis period is a burden on the banking system in general, explaining that the banking system's ability to carry depends mainly on the degree of support for foreign domestic banking obligations reserves, the government may have to make a formal reduction in the value of the currency, causing a decline.

"The interest rate starts to rise up until the peak ahead of the crisis, and could be the interest rate increase reflects tight monetary policy made by the monetary authorities to limit credit policies as well as to stop the conversion of local currency into foreign currency."

He noted that "the interest rate hike pushes investors to abandon the securities in their possession and the deposit of its value in the commercial banks to benefit from the interest tempting rate would lead to an imbalance in the financial market in a recession which precedes the often occurrence of banking crisis could push recession financial market for investors to convert their money towards other assets, and in many cases accompanied by a stock market crash in the asset market corrections.

He stressed Jabri that "capital flight towards the outside is a big burden, pointing out that" its impact on the trade balance will reflect a negative impact on the balance of payments and girls that with the emergence of the banking crisis, the growth of deposits and credit is reduced and a decline in deposits more pronounced in countries that are joint stock banks where few foreign with the presence of government-owned banks.

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