Specialists suggest the adoption of a law regulating the currency conversion

Specialists suggest the adoption of a law regulating the currency conversion
04/28/2013 12:00 AM


After the fluctuation of the U.S. dollar exchange rate
BAGHDAD - Hussein ثغب of Tamimi
Witnessing the Iraqi market volatility evident in the exchange rate of the dollar against the Iraqi dinar is to climb in favor of the dollar as the price ranges cashed between 127-128 dinars. Comes this volatility, despite the many actions taken by the central bank to stabilize the exchange rate through the expansion of distribution outlets and the inclusion of all citizens to the dollar through a specific mechanism.
Some economists attribute the reason to the absence of a law regulating the process of converting foreign currencies, allowing the creation of this gap in supply and demand. In interviews conducted by the (morning) with a number of specialists Gather the need to address this phenomenon, which is detrimental to the national economy. The confirmed number of economists on the need to follow a number of measures that contribute to the stability of the value of the local currency in the market, They pointed to the importance of passing a law regulating foreign exchange in addition to the importance of follow-up foreign transfers and check the documents submitted for the purpose of buying the currency, in addition to pumping the largest amount to Mahlahabr markets Mnavd new.
In an interview with economic expert d. The appearance of Mohammed said: supposed to improve the exchange rate of the Iraqi dinar against the dollar, because Iraq is the advantage of a trade surplus in the current account, and this is reflected in the value of the dinar and not the other way around if it improves the dinar at least settle down.
He added that Iraq secure the principle of freedom of foreign exchange, including not intersect with any transfers of criminal Kgusal money and other things illegal, we need to organize a more accurate conversion process outside because the conversion all depends on oil resources, and pointed out that the treatment depends options first is to rely on style Central severe economic freedom or release with more organization.
He pointed to the lack of clarity in the liberation of the capital account to the payments, and we are still afraid of capital flight, and pointed to the importance of legislation, a law that regulates exit the Iraqi capital, in practice we have a law regulating the entry of foreign capital, which is an investment forms, and here to be a law to regulate exit the Iraqi capital to prevent external inflate import bills.The financial expert Hilal Taan said that maintaining a fixed exchange rate to the dollar is one of the duties of the Iraqi Central Bank, which is located has a responsibility to balance at home and abroad, noting that the reasons for the high dollar many the most important regional events and increasing foreign remittances, pointing out that the central bank auction was selling daily about the 200 million dollars, but rose recently to nearly 400 million 30 percent is sold in the domestic market, and 70 percent go on the form of remittances treasury go abroad in addition to the security situation, which contributed to the instability of the dollar exchange rate.
He pointed out that the stability of the exchange rate depends on increased sales of the currency in the domestic market to meet the growing demand while reducing the external conversion.
Competent in the matter of financial Iraqi Institute for Economic Reform Alaa Fahd said that the fluctuation of the dollar exchange rate in the local market depends mechanics of supply and demand as well as the limitations of the auction for the inclusion of some banks during the previous period, but the central bank began to change its policy by subtracting the amounts more than the previous cross-ago sales Direct-to-citizens, and this needs to continue reviewing and studying this trend by Central.
He stressed the importance to be for control of the central banks that make up the role of mediator between the student real currency and central bank, and pointed out the importance of ensuring the documents provided by the merchant as well as the orientation towards expanding sales base. Proposal for the distribution of employees' salaries in dollars, as is the case in Jordan and Lebanon, because it raises the demand versus low supply.
Economic expert Amer Issa jeweler pointed out that the overall stability in the country leads to the creation of a force for the local economy doing production and services and reduce the exit of hard currency for imports, as well as help in bringing investment and foreign capital, and in all cases can be achieved stability in the dollar exchange rate . It also can work on the organization of the conversion process, including external service provides to the local economy.
He noted that the uncontrolled import of various commodities leads to stagger the exchange rate, as well as speculation is natural, which should be the role of the financial authority for monitoring and analysis and to take the necessary measures, and pointed out that the oil resources kept the country's economy.


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In an interview with economic expert d. The appearance of Mohammed said: supposed to improve the exchange rate of the Iraqi dinar against the dollar, because Iraq is the advantage of a trade surplus in the current account,

Read this definition and think oil and then you understand why the exchange rate will increase once the sanctions are fully removed. Also consider that the value of the proven reserves and the political influence in determining an exchange rate...

In [You must be registered and logged in to see this link.], the current account is one of the two primary components of the [You must be registered and logged in to see this link.], the other being [You must be registered and logged in to see this link.]. It is the sum of the [You must be registered and logged in to see this link.]
(i.e., net revenue on exports minus payments for imports), factor
income (earnings on foreign investments minus payments made to foreign
investors) and cash transfers.

The current account balance is one of two major measures of the nature of a country's foreign trade (the other being the [You must be registered and logged in to see this link.]).
A current account surplus increases a country's net foreign assets by
the corresponding amount, and a current account deficit does the
reverse. Both government and private payments are included in the
calculation. It is called the current account because goods and services
are generally consumed in the current period.^{[You must be registered and logged in to see this link.][You must be registered and logged in to see this link.]}

The balance of trade is the difference between a nation's exports of
goods and services and its imports of goods and services, if all
financial transfers, investments and other components are ignored. A
Nation is said to have a trade deficit if it is importing more than it
exports.

Positive net sales abroad generally contributes to a current account surplus; negative net sales abroad generally contributes to a current account deficit.
Because exports generate positive net sales, and because the trade
balance is typically the largest component of the current account, a
current account surplus is usually associated with positive net exports.
This however is not always the case with secluded economies such as
that of Australia featuring an income deficit larger than its trade
surplus.^{[You must be registered and logged in to see this link.]}

The net [You must be registered and logged in to see this link.] or income account, a sub-account of the current account, is usually presented under the headings income payments as outflows, and income receipts as inflows. Income refers not only to the money received from investments made abroad (note: investments are recorded in the [You must be registered and logged in to see this link.]
but income from investments is recorded in the current account) but
also to the money sent by individuals working abroad, known as [You must be registered and logged in to see this link.],
to their families back home. If the income account is negative, the
country is paying more than it is taking in interest, dividends, etc.

The various subcategories in the income account are linked to
specific respective subcategories in the capital account, as income is
often composed of factor payments from the ownership of capital (assets)
or the negative capital (debts) abroad. From the capital account,
economists and central banks determine implied rates of return on the
different types of capital. The United States, for example, gleans a
substantially larger rate of return from foreign capital than foreigners
do from owning United States capital.

In the traditional accounting of balance of payments, the current account equals the change in [You must be registered and logged in to see this link.]. A current account deficit implies a paralleled reduction of the net foreign assets.



current account = changes in net foreign assets


If an economy is running current account deficit, it is absorbing
(absorption = domestic consumption + investment + government spending)
more than that it is producing. This can only happen if some other
economies are lending their savings to it (in the form of debt to or
direct/ portfolio investment in the economy) or the economy is running
down its foreign assets such as official foreign currency reserve.

On the other hand, if an economy is running a current account surplus
it is absorbing less than that it is producing. This means it is
saving. As the economy is open, this saving is being invested abroad and
thus foreign assets are being created.
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very informative. so they take in revenues that exceed what they spend on imported goods?that has to be a good thing, right?

Yeah, good post wciappetta.. ;)