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Samson: Analysis .. The world needs a real unified currency
16th April, 2019
The world is preparing this year to celebrate the anniversary of two major events in the development of the global monetary system
The first was the establishment of the International Monetary Fund at the Bretton Woods conference 75 years ago, and the second was the emergence of the special drawing right, the global reserve assets created by the IMF 50 years ago
The economist at Columbia University, Jose Antonio Ocampo, believes it is time to launch a truly global currency by exploiting the anniversary opportunity this year, according to the analysis of Project Syndicate
When the SDR was launched, the IMF hoped to make it the primary reserve asset of the international monetary system
This remains an unfulfilled ambition, although the right of special drawing is already one of the most widely used instruments of international cooperation
However, to come late is better than never to come: converting the right of special drawing into a truly global currency would bring many benefits to the world economy and to the monetary system
In the run-up to the Bretton Woods negotiations, John Maynard Keynes proposed a new currency, Bancor, as a unit to calculate his proposal for the creation of the International Clearing Union
In the 1960s, other proposals emerged to address the growing problems arising from the dollar-dollar linkage system created at Bretton Woods under the leadership of Belgian-American economist Robert Treven
But this system (dollar-to-gold correlation) finally collapsed in 1971
As a result of those discussions, the IMF approved the creation of the SDR in 1967 and incorporated it into the articles of its agreement two years later
Although the SDR version of the IMF is similar to the creation of national funds by central banks, it only meets some of the functions of money
While SDRs are a reserve and thus a valuable asset and the unit of the IMF account, only central banks, mainly in developing countries, some developed economies and a few financial institutions, use SDRs as reciprocal payment instruments
Special Drawing Rights (SDRs) have a number of key advantages, especially since the IMF can serve as a tool for international monetary policy in a global economic crisis
In 2009, for example, the IMF issued $ 250 billion in special drawing rights to help combat the recession, following a proposal by the Group of 20 nations
More importantly, SDRs can also become an essential tool for financing IMF programs
So far, the IMF has relied mainly on increasing quotas and borrowing from member states, but the shares tend to lag behind global economic growth
The latest increase was approved in 2010 but the US Congress approved it only in 2015
Loans from Member States, which are the main source of new funds for the Fund (especially in times of crisis), are not real multilateral instruments
The best alternative would be to transform the IMF into a fully financed and managed institution in its own world currency; the proposal made by Jack Pollack several decades ago, then IMF chief economist
A simple option might be to consider SDRs held by States but not to use them as "deposits" in the International Fund, which they can use to finance their loans to States
This would require a change in the articles of the IMF Convention, since SDRs are not currently held in IMF regular accounts
IFAD can then issue SDRs regularly or during crises (which is still the best option) as in 2009
In the long term, the exported quantity should be relevant to the demand for foreign exchange reserves
Some economists and the IMF believe that the IMF can issue between $ 200 billion and $ 300 billion of SDRs annually
Moreover, this would contribute to the spread of financial benefits from the issuance of a global currency in all countries
At present, these benefits benefit only those exporters of national or regional currencies used internationally, particularly the US dollar and the euro
A broader use of SDRs would make the global monetary system more independent of US monetary policy, with the fact that one of the biggest problems of the global monetary system now is that the goals of US policy as the world's first reserve currency do not always coincide with the overall stability of policy
In any event, the various national and regional currencies could continue to be traded in tandem with the growing SDR reserves
The IMF's new "exchange account" would allow central banks to exchange their reserves for SDRs, as the United States first proposed in the 1970s
Special drawing rights may also be used for special transactions denominated in national currency
But, as the IMF pointed out in its report to the Governing Council in 2018, these "SDRs in the market" that could transform the unit into full-fledged funds are not necessary for the reforms proposed here
Nor will we need special drawing rights to use them, such as an account unit outside the International Monetary Fund
The IMF / SDR Memorial Day in 2019 is a reason to celebrate, but it is also an ideal opportunity to convert SDRs into a truly global currency that will strengthen the international monetary system and should be exploited by policymakers LINK
Don961: Central control of the level of inflation and supports electronic collection
Monday, 15 April 2019
Baghdad / Hussein Thugb
"The Central Bank has succeeded in controlling the level of inflation, maintaining prices, maintaining the purchasing power of the national currency, controlling the exchange rate and closing the gap, Between the official price and the market price.
"Foreign exchange reserves rose from US $ 40 billion to US $ 62 billion and diversification of the currency basket to support balance of payments and crisis response
The coordination with the Ministry of Finance in the management of public debt to support the budget and funding the deficit during the financial crisis experienced by Iraq because of the drop in oil prices, the issuance of national bonds in the international financial market worth $ 2 billion, as well as the provision of new products to invest liquidity of commercial banks and investment and support Profitability ".
Issuance of bonds
She pointed out that "the last period saw the issuance of bonds for the receivables of contractors after being audited by the Ministry of Planning and the Federal Financial Control Bureau, as well as the issuance of bonds to farmers on behalf of the Ministry of Finance and this move reflects a shift in a broader vision for the management of government public debt by the financial authority and monetary authority "He said.
"We have supported the electronic collection of government fees, the facilitation of payments to citizens, the signing of a memorandum of understanding with Visa International, MasterCard International and Yunin-B International International to support the strategy of financial inclusion and the provision of electronic payment cards to citizens to urge them to work with the unified international bank account, Through bank accounts internally And other countries ".
"The standardization of the sukuk security standards to increase confidence in exchange and encourage traders to deal with electronic payments instead of cash, electronic payment companies in order to support electronic operations and the issuance of license cards payment to banks, as well as linking banks and sites of the Central Bank of Iraq with data centers bank by cable To enhance the infrastructure of the banking sector and to increase the security of information and networks on the speed of data transmission Sizes Big ".
On the developments witnessed by the Central in the payments sector confirmed "the establishment of the National Bank to settle payments between banks and increase electronic financial operations between banks, companies and citizens, support electronic collections of government departments and facilitate Ways of payment to citizens ".
Memorandum of Understanding
"We have signed a memorandum of understanding with Visa International, MasterCard International and Yunin-B International International to support the strategy of financial inclusion and the provision of electronic payment cards to citizens. As well as linking the banks and the Central Bank of Iraq with the bank data centers by optical cable Aziz infrastructure for the banking sector, increasing the information and network security, as well as high-volume data transfer speed. "
Localization of salaries
The launch of the localization of salaries for all public sector employees through the transfer of salaries to employees' bank accounts, as well as the easy receipt and withdrawal of salaries through the available payment channels, bank branches, ATMs, Points of sale, and enjoy the many advantages of bank accounts. " link
MilitiaMan: Looks like they have dotted to the "I"s and crossed some "T"s with this one in regard to international trade through high tech systems. They are using optical cables or (imo) Fiber Optics..
Read the link below.. It dates back to 07/04/2018 showing me they are set to go live with their systems are may have already based on some of the wording, i.e., launch for instance, have signed, established a National Bank, etc..
They are having parliaments of local countries of the regions show up 19th, same day they said they were going to celebrate the 10 year anniversary for the ISX and with interlinking to NASADQ. Again, imo, these are all things done now. Clearly ready to go.
We know that the NASDAQ is high tech and would need similar optical cables for high speed trading.. It also suggests that now they have the high tech in place and it can be trusted!! Sukuk is effectively trust worthy Bonds or Certificates in the Islamic areas of the world in regard to finance!
They have a very high regard and safety aspect to them!! imo So these things we see now, are all very positive to me, imo ~ MM
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