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Floating the dinar .. or VAT as the weakest faith


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Floating the dinar .. or VAT as the weakest faith

Post by rocky on Thu 05 Oct 2017, 1:50 am

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Floating the dinar .. or VAT as the weakest faith

 Abdul Hussain Al-Henin 

A while ago, the Central Bank of Iraq started to use the term "currency window" rather than "currency auction", which is true because there is simply no auction until we call it an auction. It is a window for distribution of shares distributed by the bank to banks that monopolize the purchase of the dollar. , While the Iraqi is prevented from buying from them. All that they do is to bring in incorrect and certified invoices from the commercial attachés in our embassies in Dubai, Beirut, Amman and elsewhere through a routine operation at embassies without checking their authenticity.

The Central Bank has imposed 8% of the value of any bill to silence the few votes objecting to its policy and considered at the time the proportion of the customs tax on goods are retrieved after confirmation of the arrival of goods to Iraq and the payment of customs duties. The new Iraqi Central Bank raise the cost of this ratio and dispensed with the request for bills because it is difficult to verify the validity, most of them have nothing to do with any goods may reach Iraq in practice through them, the real professional traders of the trade, they buy their dollars from the market and not from the central because they are not Customers of the center who insists on a method that has lost Iraq a large part of its wealth. 
Despite this great waste of wealth and the decline in reserves, the insistence on the currency auction or the dollar sale window remains the only way, as if it were as much as death and there is no alternative. 
The Lord is asking and is there an alternative?
The alternative or fundamental solution is to float the dinar without hesitation to rid ourselves of the waste of millions of dollars a day, as the Iraqi Central Bank helps to waste hard currency at a rate of $ 10-15 million a day from a corrupt and politically paralyzed process where everyone seems to be a partner or unaware of it. Risk. The people help the political class in this deadly silence, as it is divided into beneficial classes by proximity or after the government function, each of which sets a red line for its interests and money that it receives at the end of the month without any work or benefit related to the growth of the economy except contributing to consumption and environmental pollution. More than 25% of the people below the poverty line are preoccupied with sectarian strife and insults among themselves. They are indifferent to the dangerous numbers that may threaten the future of their children. Most of the kidnapped government experts also stand against the economic decision in Iraq against the flotation for reasons that are not in the interest of Iraq at all, and they invoke poor and outdated reasons. We may be unable to convince them. They defend their position by saying that the central bank defends the citizen and fears him. Come from abroad, and this is the answer to the specialist and the spoiler market economy, the main reason for the destruction of our industry and agriculture because of the policy of the Central Bank of Iraq biased to the foreign product at the expense of local product, so hear from time to time amateur conspiracy theory, a majority in Iraq, that neighboring countries conspire We aim to kill the Iraqi industry and agriculture by flooding the Iraqi market with cheap products without the price of production in the country of origin.
The truth is that the central bank donates a large part of the value of these goods indirectly paid to the foreign product because of the adoption of unrealistic and exaggerated value. Iraqi dinar , which made imported products cheap compared to Iraqi counterparts if they were produced, however , and as long as the insistence continues strongly to reject the float of the dinar, and we not only have the ability to provide proposals publicly, let us explain the practical alternative to the auction currency , which can be applied without real obstacles: 
- Bank Sell ​​ The second is to maintain the stability of the exchange rate. In both cases, these two objectives can be achieved by selling the dollar directly to the Iraqi citizen, not to the banks, and here we turn the bank's default goal (citizen care) into a true and sincere goal. .
What is the appropriate mechanism for this? 
- We print checks with 12 checks in each checkbook (number of months of the year) and at the rate of one book per family per year according to the records of the Ministry of Commerce. 
- The family buys the checkbook (dollar) against the Iraqi dinars (see check of one million Iranian riyals in the market). 
Some people may argue that people are simple and do not know this difficult process. In fact, no matter how simple a person understands profit, however, simple people can sell their share to a broker, a banking company or any ordinary person in exchange for a portion of the profit that the price difference between the central price And between the parallel market, and thus will win the citizen will not escape the currency. 
What about the real traders who ask for the dollar to import goods?
- They will buy the dollar from the citizen at a price lower than the previous price to buy it, thus winning the real trader, while the fake trader disappears, the average citizen wins the difference, and the government gets the Iraqi dinars to walk its financial transactions and the dollar will not go abroad, What Iraq has long complained about is that the dollar enters Iraq only from the sale of oil.
There are those who try to put the hypothetical questions to thwart any good idea, and that it is difficult to provide an adequate amount of dollars inside Iraq on the pretext that the current transfer process is taking place from accounts that are already outside Iraq. The answer can also be sold dollars to banks through remittances provided The delivery of the dollar to the Central Bank by the banks and receiving it abroad as is happening now, but in exchange for a commission or a specific tax can be a tax surplus value VAT, a tax must be weak faith or a compromise after the cash reserve amounted to less than 40 billion dollars, Cash covered cover M versus monetary bloc in Iraqi dinars, as well as external debt, which reached fairly scary.
The imposition of the tax on remittances abroad is not a new innovation, but it is the practice in many economically stable countries such as the UAE, where this tax is imposed to maintain a delicate economic balance, even if the Iraqi Ministry of Finance through the General Authority for taxes on this step, 10 billion dollars a year of this compound tax rate of 19% to fill part of the imbalance caused by the Satanic agreement to the fiscal policy followed by the Iraqi government and the monetary policy adopted by the Central Bank of Iraq.

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