D .midht Quraishi: * the current financial and economic crisis and the issue of the dinar exchange r

D .midht Quraishi: * the current financial and economic crisis and the issue of the dinar exchange rate

- Published in 02/03/2016

Introduction Iraq is currently suffering a financial and economic crisis, particularly since the beginning of the decline in world oil prices in the summer of 2014, where world oil prices began to fall from the highest level reached by a [...]

Introduction

Iraq is currently suffering a financial and economic crisis, particularly since the beginning of the decline in world oil prices in the summer of 2014, where he began global oil prices to decline from highs of $ 120 a barrel to $ 30 , and even without it and the subsequent significant decline in export earnings oil. This decrease with other chronic economic problems have coincided, an almost total absence of the productive sectors of goods such as industry and agriculture as well as the deterioration of basic services, and the impact of all this on the trade balance and the general budget and foreign currency reserves, unemployment, poverty and the lives of citizens. It has reached to the extent of the fear of the possibility of not being able to employees and pensions insurance in the coming months. To make matters more complex is increased confrontation and fighting with terrorist groups , which controls some of the western and northern areas of the country and the big spending resulting from it as well as the impact of financial and administrative corruption in all aspects of the state and money smuggled out of the country.

It is natural that such a situation reflected the growing budget deficit and the US dollar exchange rate in the Iraqi market price (In contrast, the low value of the dinar against the dollar). And Ntejhlankhvad world oil prices and diminishing returns from foreign currency the central bank has started to reduce the quantities offered and sold the dollar in the foreign currency auction, especially after the issuance of the general budget for the year 2015 and article 50 Mnhawalta set a ceiling on higher sales of the Central Bank of the dollar to the private sector in order to preserve the size of the reserve of foreign exchange at the central bank. It has led to the rise in the dollar against the Sarsrv Aldenarve the market and there has been some confusion in the local market.

And about the high dollar exchange rate and rising budget deficit to very high levels have emerged as claims and proposals from specialists and economists and politicians to deal with the dollar exchange rate and adopt suitable to cover the budget deficit and the means, or at least reduce it to acceptable limits.

Although the government has taken a number of measures to reduce public expenditures , such as the imposition of certain taxes and customs on imports and the reduction of the three presidencies salaries and imposing increased fees for some state services to citizens and fees, then it expanded the measures to include deducting a percentage of employees and pensioners, thinking about the state taking advantage of the property and state lands to generate money for the general budget. But all these measures were not sufficient and not commensurate with the size of the problem and we still need other measures as radical as corrupt accounting and thieves of public money and the recovery of money stolen and looted and feminine ministries and administrative organ in earnest. But the latter is facing a big problem because of the opposing political blocs for such actions as they affect their interests. That is why the problem remain pending decisiveness.

With regard to the dollar exchange rate, it has some people put a proposal to adopt a planned policy to reduce the value of the dinar which is known as the economic the term Devaluation)) to be gradual so as part of the proposed other solutions to address some of the current economic problems. Some of this proposal was opposed in absolute terms while others promise as a last solution. That is why we decided to continue the discussion may be that we reach a common conviction on the subject.

It should be noted that the devaluation of the dinar has positive effects and negative, we will discuss these effects on the national economy and some economic indicators below.

Report