Iraqi Dinar Discussion Board

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CBI to change Dinar back to REAL Exchange rate

Economic Adviser to the Prime Minister: the central bank would reduce the hardline policies

BAGHDAD - Iraq votes 13 / 05 / 2008 at 03:46:14


The economists are Iraqis, including an economic advisor to Prime Minister Nouri al-Maliki, on Monday, the Central Bank to abandon its adoption of tight monetary policies, because of their negative impact on the national economy, by changing the value of the real exchange rate of dinar and causing a deficit in the general budget.

He said Abdul-Hussein Al-Anbuge, economic advisor to the Prime Minister, before the specialized symposium held in Baghdad on Monday, under the banner of (economic and financial reform and reconstruction in Iraq), that "actions at the Central Bank of hardline Iraqi currency to reduce the mass and raising the rate of disbursement, led to results Damaging the Iraqi economy a whole. "

The Al-Anbuge, during his research entitled (the effects of tight monetary policy ... How long?) In the symposium, that "that the Central Bank of attempts to raise the value of the dinar, changed the value in the market, which led to a decline in the value of resources Oil resident dinars. "

He added that "reflected negatively on increasing the rate of disability, in addition to the resurgence of the economy rental, because the high value of the dinar led to a dependence on imported more industries, which seem cheap imported goods for the Iraqi consumer."

The economic expert, "Despite high oil prices, but the truth is that the economic cycle has become ends in outside diameter," considering that the beneficiary of the rising Iraqi currency "are the ones who remit their profits at home abroad, and not vice versa."

He said Al-Anbuge that monetary policy "did not address the phenomenon of inflation, as demonstrated by the rise of imported goods whose prices have increased because of higher oil prices globally," stressing the importance of monetary policy to be "neutral if were not able to cope with fiscal policy, reduce the gap with inconsistencies Between them. "

Rehn called Ahmed, Deputy Governor of the Central Bank, economists Iraqis to "re-examine the causes of inflation," considering increasing government spending, "one of its main causes, because the expansion of spending is not offset by an increase in production."

Rehn said "For example: How Iraq needs of cement, and how he can produce."

He called on Deputy Governor of Central Bank not to be "load bank unit responsible for what is happening in the Iraqi economy," pointing out that the central lift interest rates to control the volume of cash "that led to bank deposits comes to it, without lending to the private sector."

He pointed out that Rehn (93%) of deposits in the Central Bank "comes from a bank: the Rafidain and Rasheed Gumian", he wondered, "Why does not the government directed banks to lend, rather than deposit the funds in the Central Bank to maximize profits ..?."

A financial expert, Majid image on this last speech by saying that he "does not desired results of the exchange rate to float the dollar, since that will ensure that interest rates will rise to more than the day."

The image that everyone "focus on how to solve immediate problems, namely how to develop the financial process, pressure on the state in order of preference the production process on trade, and finding solutions to reduce unemployment."

But the president of the Economics Department at Mustansiriyah University, Ahmed Al Wazzan expressed his optimism about the economic situation, and said that "groping for the first time in Iraq, the features of the building fiscal and monetary policy after it was everything but the state only."

Wazzan said that the problem of the Iraqi economy "that is still held OWN government control over all the joints," adding that "the time of parental care has ended, and it is time for action, according to indications of the market."
The punitive Hamid, Chairman of the Businessmen Association, that Iraq "stands in front of the economic situation is difficult and very delicate, but it has the ingredients necessary to fill an important position globally."

He agreed with the view of the punitive-Wazzan, the importance of the emergence of the economy "parental care," but he believed that the best solution to the current Iraq situation is "making a mix of cooperation between public and private sectors, and this will not be through investment laws, but also to Improving infrastructure, focusing on the development of human skills and development and introduction of modern technology at work. "

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