Close Currency destabilize the economy of the troubled countries

Close Currency destabilize the economy of the troubled countries

Hani Zayed Huda Alaa Hassan al - Obeidi , was

published in the nation on 25 - 03-2016

Economists warned of the seriousness of the repercussions of the collapse of the local currency in Syria, Yemen , Iraq and Libya, the economic conditions both at the domestic level or on their Pacific regional scale.

There are a lot of crises that caused the collapse of the local currency areas of conflicts and wars, such as high inflation, price increases, and the state 's inability to pay its obligations, high debt ratio, and reducing those countries credit rating, what prevents them from getting any loans either from the bank international or the international Monetary Fund, and declining sources of funding foreign reserves, and declining export rates, as the collapse of the local currency would lead to the state 's inability to buy spare parts for manufacturing, and the flight of foreign investors due to the erosion of asset values.

retreat rates

says economist and analyst financial Wael copper: "The local currency decline would reduce the value of the project assets worth about one billion dollars by about a quarter of its value if volume decline in the local currency value of about a quarter of 25%, and get worse whenever decline rates have increased, as prevents erosion of asset values bring any foreign investments, as well as on the wars and armed conflicts turning such countries unable to provide dollar resource countries due to its transformation from a manufacturer of investment countries to consumer countries, and even unable to provide dollar resources necessary for consumer goods. "

collapse of the rial Yemeni

In Yemen, for example, we find that the security collapse , creating a fertile environment for smuggling operations that drain the currency has led to the decline in the riyal Yemen against the dollar, so the dollar exchange rate up to 270 riyals after it had been worth 215 riyals to the dollar for several years, and 70 rials against the Saudi riyal after that was 57 riyals, amid expectations of increased severity dropped the value of the Yemeni riyal what is more , in spite of attempts by the Yemeni government to avoid this collapse and degradation through the re - export of oil from the wells, which returned ownership to the government earlier this year . In wartime, stop funding sources for foreign exchange by the export halt to the outside, and declining remittances and the departure of businessmen and investors, and security worsened in Yemen 's decision Houthis to float oil derivatives without providing foreign exchange traders, as the war has led to the depletion of all the savings of Yemen's foreign exchange, including the cash reserve of the dollar, which fell from five to 2.3 billion dollars, and still continues to deteriorate.

landing of the Syrian pound

on the Syrian - scale, says Syrian activist Nizar Turner: "the situation in Syria is going from bad to worse, where it landed the Syrian pound to reach to 440 pounds to the dollar, and after that the dollar exchange rate of between 46 to 50 pounds before the outbreak of the crisis in Syria in March 2011, where the war led to the cessation of production wheel, especially after the destruction of the infrastructure in Syria, and the large decline in the import and export traffic , which have become almost non - existent. "

stabilizing the exchange rate ,

according to experts, the Iraq losing nearly billion dollars a month at the price difference between the official exchange rate of the Central Bank rate and what exists in the market as a major economic damage in the light of the depletion of more than $ 30 billion a year in order to stabilize the exchange rate.

attribute the experts the causes of decline of the dinar exchange rate against the dollar, to impose taxes and fees and the application of austerity measures by the government, and to promote high prices in local markets, traders and owners of capital paid to purchase large quantities of the dollar and keep it, which will affect the overall economic situation in the country and to rise prices in the local markets and also will lead to higher inflation.

monetary scene Libyan

facing the Libyan banking sector liquidity crisis suffocating, which confused the Libyan citizens, it came to pour oil on the fire burning mainly in food prices due to the record high reached by the dollar 's exchange rate against the dinar on the black market four dinars for the first time since the launch of the currency Libyan dinar from the 60 - year threshold. the

expert says the financial and founder of the Libyan Stock market , Dr. Suleiman Salem Shehoumi: Let 's ponder in the Libyan monetary scene and before they take provisions haphazardly on the tip and we carry all the consequences of the crisis , which is a real warning to enter the dark tunnel may be difficult to get out of it before the decades from now if not everyone takes responsibility, and waive the interest of the nation, we need to put a way out of this fray is difficult to map.

liquidity crunch

in the foundation of liquidity caused by the Libyan currency leakage to outside banks crisis, not a recent spill but he is well known in the Libyan economy phenomenon , even in the era of the former regime, but worsened dramatically the fact that the Libyan economy is a cash economy par excellence, and constitute a cash transaction the largest share of daily trading.

However , this problem is exacerbated with a stop selling the dollar operations of banks and stop the movement of letters of credit due to lack of the central bank 's ability to meet the ongoing demands, and corruption , which controls the operations relating to foreign currency. Of course the central bank blamed on traders in retaining cash outside banks, and they respond that they are not security on their money and want to buy the dollar on the black market for the supply of goods to the market.

Exchange rates

What is striking is that the dollar exchange rate rose overnight from three dinars to the dollar to four dinars to the dollar, and of course not a secret that there is a secret trade conducted through conversion Libyan gold into ingots and smuggled to different countries for the purpose of obtaining dollars and then re - introduced in the market through remittances present in other countries , and tied dealers currency in Libya dealers.

certainly that what is announced to provide $ 2 billion to banks Kaatmadat documentary following the quartet meeting , " the government in Tripoli , and the Conference, and the Court of Accounts, the central bank" to solve the liquidity crisis, has not been ear Alsagah on the black market , but on the contrary , the dollar rose the most, they know that what resulted in no solution to the crisis and will not repeat , but the simple money fleeing to the warmth of Libyan banks coffers part, the reason that there are many complexities to the opening credits and severe censorship imposed by the now Central Bank.

trading strategies

researcher specializing in economic affairs, Nasser Mohammed, asserts, "that country 's currency exchange value what represents the home of his weakness, if collapsed taking with it everything both in the same country or within the regional and international environment, where interconnected markets today via trading strategies are complex , such as stocks, bonds, commodities, derivatives and other investments market, if the currency were destroyed with the country in all its markets were destroyed, this created what has become known as the war of Finance , as well as the security of collapse followed thus clutter Al at all levels.

dip dinar Iraqi

government faces Iraqi crisis financial result of lower oil prices in the world market, and remains the preservation of the local currency value of the need to further steps, according to experts economists is the high price of the dollar against the dinar Iraqi major challenges facing the economy Iraqi Valmdharbh suffered by the dinar Iraqi will later collapse against the dollar through the depletion of large reserves of the Central Bank of Iraq being the ultimate weapon used to defend the currency exchange rate of Iraq .

trying to Central Bank Iraq would increase the money supply of the US dollar , where the sales in the last auction to sell the currency of $ 235 million , a significant amount goes to a few banks or offices or companies transform Mali in the process of speculation, economists that some politicians believe the Iraqis are standing behind them.

restructured the banking sector

treatment to this crisis is divided into two structural take time through the restructuring of the entire banking sector in Libya, the construction of an integrated strategy linked to the development of the Libyan economy and diversification of treatment, and returns the oil export operations, which is not the focus of it seems everyone now is the fact that the fire needs to extinguish before come fire on the rest of the house.

the second are topical treatment call on the central bank to declare stop the division, and the return of the board of the Central Bank 's management to work as a team, and to unite efforts and reconnecting the banks between the region of East and West through the Central Bank to activate the immediate settlement of the clearing operations system and to facilitate the sale of foreign exchange in all bank branches with the need for the central bank announces allocated to operations cash sales budget , which must not be less than $ 100 million a month in size, especially as the tally of foreign currency cash in has in Libya , according to the Central bank reports year - end process last indicate the presence of nearly 16 billion dinars , foreign currency can work on the supply part of the inside in coordination with the banks in the sanctions committee and the Nations United , and about 47 billion dinars monetary gold found inside can be used as part of the solution.