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stockings3333   Tuesday, 07/15/08 09:49:23 AM
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Disparate views of economists on a basket of currencies Iraqi
by Bambaboo on Fri Jul 11, 2008 2:33 am

Disparate views of economists on a "basket of currencies Iraqi"

Jul 8 2008 8:38 AM

Lighthouse / Voices of Iraq

At a time when Economists agreed on the importance of diversifying the basket of currencies of Iraq, the opinions varied on the mechanism and the time needed to be followed between waiting for the repair defect in the structure of the Iraqi economy, and the duty to take a quick decision so, another view is likely the futility of the whole matter. Manaf says goldsmith From the Institute of economic reform for the Independent News Agency (Voices of Iraq) that "a basket of currencies is the best solution to deal with the devaluation of the dollar against other currencies" explanation that it "will enable us to deal with the exchange rate of the dinar as the real value to him."

Afterthought but pointed out that "there are procedures that must be taken prior to a basket of currencies in the forefront of not adopting the economy on oil but on all economic activities so that all of one block."

The basket of currencies means that are selected group of currencies with average weights measure of value. The normally used in contracts as a way to avoid or minimize the risk of currency fluctuation. Goldsmith and finds that "Iraq must begin now translate the words of Prime Minister Nouri al-Maliki that in 2008 in reconstruction, so as to activate other economic sectors such as agriculture, industry and services"

He expressed his conviction that this would "activate these sectors to be an impact on the recruitment of gross national product of Iraq" indicating that "this can be achieved only through the support industries and agriculture in all its aspects, in addition to" support small primers. "

And that this support "will generate economic movement in the market and will give new tributaries," pointing out that "in case the interaction of all sectors .. then we disengagement dinar dollar."
Goldsmith promised "Iraq is made entirely on oil revenues and put it in the future fund or cash reserve, are not enough."

He said "we must give ourselves a chance until a year or two sectors to interact and Iraq due to an active regional and international level then say the link has been there and make a basket of currencies."

The Adviser to the Prime Minister Abdel Hussein Al-Anbuge was called to expedite that there will be a basket of currencies "on the grounds that this would flotation of the Iraqi dinar with the dollar for import case if other currencies"

He expressed his objection to talk about the dominance of the dollar on the Iraqi economy because "the dollar is not dominant in Iraq, but in all regions of the Middle East, a major task done."

He stressed that "this decision (the basket of currencies) requires time and effort, and it needs a decision by the Central Bank of Iraq because it is primarily responsible for this matter."

It is noteworthy that the last five years witnessed a continuous decline of the dollar against the various major international currencies such as euro, which is the second most important international currency after the dollar and the pound sterling and Japanese yen. And encourages the U.S. administration devaluation of the dollar in order to increase U.S. exports and reduce the trade balance deficit, which means reducing the escalating external indebtedness of the United States of America and on this basis, the phenomenon of decline in the dollar as a means intended to strengthen the competitiveness of American exports at the expense of exports of competition for foreign markets, especially European exports The Japanese and Chinese. The magnitude of the dollar trading around the world, amounting to about three trillion in the year one of the most important reasons that make any fluctuation in the rate of exchange, preferring to evaluate the rest of currencies, as reflected by any disturbance and fluctuation in the dollar exchange rate on prices of goods and services.

For his part, said economic researcher Hossam Osama out that "we should as a country that does not rely on only one coin, because the insistence and determination of the Central Bank to keep cash reserve of Iraqi thirty billion dollar only occurred in heavy losses"

Sam finds that it must "hasten also hastened the Gulf States and China, which maintains a reserve of up to about half a trillion and the diversification of the majority of their currencies"

He pointed out that Sam "The United States itself maintains currencies other than the currency comes from the factory inflation from the company General Motors in Korea and Japan."

He denied Sam told (Voices of Iraq) that "there will be no complicated procedures to diversify currencies, since anyone can now transfer any amount to any currency needed" and wondered "what prevents access to a basket of currencies of Iraq?"

He pointed out that "the rejection was coming from if monetary policy remains CBE can the House of Representatives and the government have decided that the usefulness of economic attached resolution, the process does not need to lift only one telephone stock exchanges to buy other currencies"

He concluded by saying "Whenever diversified basket of currencies of any country given more options in dealing with all economic countries."

Regarding the impact of fluctuations that occurred in the U.S. dollar exchange rate on the movement of import and export in Iraq says scientist's name Abdul Hadi, "The fluctuations that occur at the level of major currencies (dollar, euro) have a major impact on every country in the world in different proportions and this applies particularly to Iraq and that is Economic relations with the European countries dealing in euros and other states dealing in dollars. "

He told (Voices of Iraq) that "Iraq affected the global exchange rate fluctuations increased after the lifting of the siege, and his return to the international arena in view of the existing international economic relations through imports, exports and cash reserves to be maintained." Increased "in the last year of Iraq's reserves rose from 22 Billion dollars to about 30 billion dollars, and if we learned that "the euro exchange rate has risen by 10% during the same period, we will find out that Iraq's dollar reserves decreased the same percentage," adding that the scientist that this matter is "economic loss for Iraq, especially under the current circumstances and needs For every dollar to rebuild the Iraqi economy.

He added: "The trade volume between Iraq and EU countries rose to more than 40% during the last years of the total import while its exports increased to more than 20% "and added that" the size of the increase This in-interest of the Iraqi trade balance surplus that for the European Union and the deficit in relation to Iraq and if it continues, the euro exchange rate to rise and the dollar decline, the imports from EU countries of Iraq will go down in the future and turn to other destinations may be the Southeast Asian countries to compensate. "Confirmed Abdul Hadi that the best solution to compensate for these losses lies in the "diversification of reserves by Iraq, is now larger than they are to retain currently worth only four percent of the total reserves in euros," calling for "lift this ratio to 40% or more to keep abreast of developments in trends Iraqi trade "as well as the importance of" diversify investments to reduce losses occurring.

"The economic researcher Najem Aboud, referring to the" ineffectiveness of the basket of currencies of countries which is linked to its economy as a major oil export so as to link their exports in dollar. "He added, a researcher told (Voices of Iraq) that" This policy would be acceptable if the export diversification and thus enter the diversity implications. "He considered that" the problem of dependence on oil in the state budget is the main obstacle affecting the feasibility of the policy of the basket of currencies. "The reason for this" because we sell oil directly in dollars and then we Transforming it into other currencies such as euro, sterling or yen, which meant that the basket of currencies that there is only after passing on the dollar. "

The comprehensive study by the University of Qatar on inflation and the dollar linked currencies in the GCC countries, and exchange rate policy followed in those countries confirmed that the Gulf states do not need to link their currencies to the dollar break, but needs to be greater flexibility in dealing with the exchange rate. And the most prominent effects Implications of linking the economies of the Gulf States dollar study sees it is that United States policy towards its currency and economic interest to them may not be compatible with the economic situation that with the Gulf states, and the depreciation of the dollar against other currencies will exacerbate the problem of inflation, especially if topped Without currency-denominated imports dollar a large segment of the overall value of imports. Therefore put on the arena idea of a policy shift to a basket of currencies or to adhere consistently to link the local currency dollar, as it exists for the current situation in the Gulf states except Kuwait.

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