An invitation to invest in the stability of the exchange rate in rebuilding the economy

An invitation to invest in the stability of the exchange rate in rebuilding the economy


1/15/2014 0:00

 A balance of the cash market indices

BAGHDAD - Hussein al-Tamimi Tgb
The objectives of monetary policy to achieve economic growth and stability and reduce the unemployment rate , and the stability of prices of goods and services , as well as the stability of exchange rates , and improve the balance of payments position and achieved these goals by following the monetary policy tools of direct and indirect .
That's what started talking affairs specialist banking and Samir Nasiri said that achieving the goals of monetary policy is through regulations issued by the Central Bank of Iraq during the past years and finally what was released in 2012 and 2013 Commoner .
Substitution of cash
He Alnasiri to the importance of maintaining the balance of the cash market and work to strengthen the Iraqi dinar exchange rate , which represents the external value of the dinar , as well as face the phenomenon of substitution of cash and the required availability of a tight monetary policy a two-way or across the two signals powerful are the exchange rate and interest rates , noting that he ordered enhances Mechanical moving cash to influence the balance of the cash market and then the stability of real activity that requires lifting the external value of the Iraqi dinar in a manner commensurate with the real exchange rate to contain inflationary expectations , adjusting interest rates, Central Bank of Iraq in a manner gives financial market strong signals for changes proportionate and desirable with the evolution of structure timeline for interest rates .
He noted that the basic functions of the Central Bank of Iraq is to build a cash reserve in order to promote foreign and cover the exchange rate of the Iraqi dinar and the creation of economic stability which is one of the indicators of the success of the application of monetary policy.
The average price of a balanced
He continued , saying that the current structure for the stability of exchange rates has been granted an opportunity for the Iraqi economy to rebuild and grow , despite the fact that prices have not stabilized completely , due in part to the lack of stability and the nature of the conditions experienced by the country , which has managed the policy adopted by the central to the province the rate of the Iraqi dinar balanced with a JD in 1233 31/12/2012 the 1200 dinars in August / 2013. Within this context , he has the CBI in the collection of reserves at a high level of foreign exchange , the shares have installed the exchange rate of Iraqi dinar against the U.S. dollar , and is an order appropriate and required at the current stage where the foreign exchange reserves up to 76 billion dollars , and must be noted the role played by the private banking sector in achieving this stability as a result of the implementation of the policy of the Central .
Aggregate demand pressures
Pointing to the need to reduce inflation and the state of the phenomenon rooted in inflationary Eshrha inflation mainly caused by the pressure of aggregate demand , which led to the disruption of the money market in terms of the public's desire to retain cash balances over the supply of those assets . This reflects an increase in the speed of money circulation and an increase in inflationary expectations at a time , as it has become the latest source of continued inflationary phenomenon that was the goal of reducing hyperinflation of the main objectives of monetary policy.
Dollarization phenomenon
On the face of the phenomenon of dollarization said Alnasiri : become money represents without doubt confounded, is a good value in light of real interest rates negative made ​​individuals inclined to hold foreign currency as a store alternative to value through the spread of the phenomenon of substitution of cash ( dollarization ) any use of foreign currency in domestic transactions so was the face of these phenomenon, its positive impact as one of the goals of monetary policy.
Management of the currency
As for the detailed reform the management of currency between the Iraqi Central Bank adopts a system of management of the currency of any transformation of a small amount of currency chasing a large amount of the price of services which reflect the stage of stability, growth and prosperity, and on this basis, the proposed project to delete the zeros from the Iraqi dinar fired from considerations proper management of the monetary system and the transformation of the mass of cash flaccid to block easy monetary circulation or creativity 

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