Experts: reduce the effects of the parallel market, contributing to the stability of the exchange ra

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Confirms experts and specialists need to reduce the effects of the parallel market, the stability of the market and the exchange rate of the dollar against the dinar, pointing to the importance of maintaining economic expertise to participate in the auction currency.

The effects of the parallel market

In this context, the economic expert called for the appearance of Dr. Mohammed Saleh, to reduce the effects of the parallel market exchange rate of the dinar against the dollar, because the reduced contributes significantly to the stability of the exchange rate of the dollar. He added in a statement that it is necessary to reconsider the granting of banking companies and financial transfer licenses to enter the auction sale of the currency because plentiful hurting the economy and significantly affecting the stability of the dollar in the local market., And pointed out that those companies lacking greatly to the experience that qualifies them to compete with private banks, while The private banks have become experienced and knowledgeable enough to enable them to participate in the central bank to control the exchange rate of the dollar. Reminding the establishment of private banks that fall under the Association of private banks in reducing the price of the dollar last summer through coordination with the Central Bank after the Iraqi market has seen an unprecedented decline in the exchange rate of the dinar against the dollar.

Auction sale of currency

Saleh explained that he was supposed to sell to the central bank dollar companies in order to sell it at a price that you see fit to sell it in exchange for the banks backed civil price to create a state of balance and order to enhance the freedom of the citizen to the point of choosing which ones to buy the dollar. Indicating that the buying of the dollar auction sale currency (for banks) better citizen from the sale of the Central dollar exchange offices in local markets being sought to make profits at the expense of an imaginary economy.

He called for reducing the number of intermediaries in the sale of the dollar directly and be selling at the official rate, and not as it gets at the moment in the exchange offices in local markets. Also, higher interest rates reduces the enthusiasm of investors and businessmen on the assumption, while falling encourage investment, which is reflected in the follow-up the economy and improve the value of the local currency. Stressing the importance of reducing inflation, where rising inflation could lead to the devaluation of the national currency and accordingly changed exchange rate.

Supervision

For his part adviser said the Iraqi Institute for Economic Reform d. Ahmed al-Husseini: that of the duties of the central bank supervision and control over the parallel market and not on the banking companies, because the parallel market plays a big role in the pressure on the economy by crowding out banks in the auction currency.

He said in an earlier statement (morning) that the role of the central bank oversight may be suffocating at times on these companies for the purpose of giving the opportunity to the banks to exercise its natural role in the work, as the private banks began to complain about the presence of competition from the banking companies which dramatically affected deterioration in the activities of these banks., and pointed out that the banking companies newly registered to not possess experience in the market and have a real mechanism of action, and this is what caused by a period of fluctuating exchange rates of the dollar and the rise in its rates in the local market.

Monetary variables

For his part, the academic economic d. Essam Mahouelle that the large number of companies specialized in brokering the sale of currency in a monetary policy in Iraq has caused a burden on monetary variables other, and thus would be a burden on banks in general through the calculation of the interest rate and draws customers to the banks.

He pointed out that the number of banking companies large increase of the proportion of demand while supply is limited what causes a gap request because the money supply today is managed from the central bank, and therefore, the monetary policy of the Iraqi did not unleash the market to take its course, because the amount of money supply is controlled by a Central Bank and demand an open and non-specific because of the increased registration of banking companies that affect the stability of the currency through the gap to find a request for viewing limited currency causes an economic problem for the country.


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