Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Join the forum, it's quick and easy

Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

Would you like to react to this message? Create an account in a few clicks or log in to continue.
Established in 2006 as a Community of Reality

Many Topics Including The Oldest Dinar Community. Copyright © 2006-2020


    The Iraqi dinar is falling again against the dollar... the dilemma of the "security mentality" and t

    Rocky
    Rocky
    Rocky
    Admin Assist
    Admin Assist


    Posts : 253733
    Join date : 2012-12-21
    • Post n°1

    The Iraqi dinar is falling again against the dollar... the dilemma of the "security mentality" and t Empty The Iraqi dinar is falling again against the dollar... the dilemma of the "security mentality" and t

    Post by Rocky Wed 07 Jun 2023, 4:49 am

    The Iraqi dinar is falling again against the dollar... the dilemma of the "security mentality" and the continuation of smuggling

    [You must be registered and logged in to see this image.]

    +A
    -A


    Baghdad today - follow-up
    The value of the Iraqi dinar has returned to decline, after relative gains it achieved during the past months, mainly due to the increasing demand for the dollar and the lack of supply of it, and also due to problems in managing the financial process in Iraq, according to Iraqi officials and experts.
    The value of the dollar rose to about 1480 dinars now, compared to 1380 dinars per dollar at the end of last April.
    The instability in the price of the dollar causes economic and financial problems in the country, which manages a large part of its internal trade, and almost all of its foreign trade, in US dollars.
    The Central Bank of Iraq raised the quantities of dollars sold in the market at the official rate, 1310 dinars per dollar, to 206 million dollars per day on the fifth of June, compared to 107 million at the same time last month, according to bank data.
    However, the increase in the supply of dollars did not seem to lead to a decrease in its prices.
    The government's economic adviser, Mazhar Muhammad Salih, says that there are two trends that have caused the recent increase in the volume of sales in the Central Bank's window.
    Saleh adds that the first trend is caused by the re-submission of applications by banks that were previously rejected by the compliance platform due to deficiencies in the technical conditions for submission.
    The instructions stipulate that the rejected banks are allowed to submit new applications after several months, which generated "high momentum in demand for the dollar," according to Saleh.
    The second reason, according to the government advisor, is the "slowness in the movement of foreign transfers" due to external regulators.
    Saleh says that the audit process takes a relatively long time, and this raises the momentum of requests for foreign currency.

    government actions

    Saleh says that the Iraqi monetary authorities are seeking to shorten the transfer time and strengthen bank balances with their correspondents from international banks after entering the window of the Central Bank to sell foreign currency, through continuous coordination with the compliance authorities in the US Federal Bank.
    The government is also trying to control the movement of the dollar in the parallel markets, according to economist Mustafa Hantoush.
    Hantoush says that the previous government "manipulated exchange rates" without an economic justification, which led to an increase in the value of the dollar in conjunction with the US Federal Bank's imposition of compliance measures that also caused a reduction in dollar sales in the markets, which led to an increase in its price.
    While the current Iraqi government reduced the price of the dollar against the Iraqi dinar, in an effort to increase the strength of the Iraqi currency, its efforts apparently collided with the high demand for the dollar for internal transactions, and also because of currency smuggling.
    According to economist Ali Hamid, "the dollar is sold in Iraq at a relatively cheap price, which makes the demand for it high to be sold in other countries."
    Hamid added, "The sanctions imposed on Syria, Iran and Lebanon greatly reduced the hard currency needed by those countries, which made the illegal currency trade flourish, and Iraq was the preferred destination for smugglers due to lax laws and the abundance of cheap currency."

    Security mentality

    Expert Hantoush says that the Iraqi authorities are trying to manage the financial file with a "security mentality" that relies on "arrests and signatures (pledges)" and other ill-conceived measures.
    He adds that this method has led to a "liquidity crisis" in Iraq, as "smuggling to Iran and Syria continues" due to the lack of control over the smuggling file at the border crossings.
    Hantoush added, "The security forces are supposed to control the border crossings and prevent smuggling," instead of "arresting those who trade dollars inside."
    The security pursuits of dollar traders create a liquidity crisis because of "the high risk of trading, which means that sellers will try to achieve high returns to offset that risk," according to Hantoush, and the pursuit of traders means fewer dollars available in the market, and this in turn leads to an increase in the price of the dollar.
    The government has not yet approved the 2023 budget, in which the dollar is supposed to be officially priced at 1,310 dinars, in an effort to calm demand for the dollar and reduce its prices.
    Some economists believe that "the devaluation of the Iraqi currency" is positive, calling on the Iraqi government to think "with an open market mentality," according to economist Samer Abdul Majeed.
    "The fluctuation in the dollar's price hurts the market much more than its steady rise," Abdel-Maguid says.
    Abdel Majeed agrees that the currency depreciation will hurt employees and those with limited incomes, but he says that this effect will be for a relatively short term in exchange for a long-term recovery in investment, tourism, agriculture and industry.
    Iraq supports its currency by selling relatively cheap dollars and providing them for circulation, which causes financial losses in the millions of dollars daily, but this also ensures the provision of relative economic security for employees and people with limited income, while also causing an increase in the demand for currency smuggling.
    Iraqi governments are trying to achieve a balance between demand for and supply of hard currency, but they have also been subject since last October to constant scrutiny by the US Federal Bank to ensure that currency is not smuggled to other countries, which reduces supply in the markets.
    [You must be registered and logged in to see this link.]
    • Back to top
      Current date/time is Sun 24 Sep 2023, 2:26 am