The Central Bank's plan for reducing its Iraqi Dinar
The oil wealth and progress of the proceeds of abundant, secure the cover of the national currency with the Iraqi dinar has become one of the strongest currencies in the Middle East.
The central bank has the distribution of foreign exchange reserves in a basket of currencies like the dollar and the pound sterling and the Japanese yen as well as its reserve of gold so that the cover of the Iraqi dinar remains strong, regardless of fluctuations in the currency market.
Until the early eighties was the Iraqi dinar equivalent of more than three dollars U.S., but the damage to the Iraqi economy since the invasion of Kuwait at this time 21 years ago and subsequent wars and international sanctions, ensured all firing runaway inflation destroyed the value of the Iraqi dinar so that the price now spent more than a thousand dinars to the dollar.
Coupled with the erosion of the value of the currency and banking financial difficulties and administrative and accounting are still different, especially in trade and handle daily cash.
Faced with this situation since the central bank decided early in 2010 a plan to drop three zeros from the Iraqi currency nominal and pave the way for a gradual procedure that preserves the purchasing power and prevent the exposure of the Iraqi market to the economic turmoil hurt consumers.
Radio Free Iraq adviser met with the Central Bank of the appearance of Mohammed Saleh, who reviewed the falling value of the Iraqi dinar, referring to the deletion of zeros is part of a project to reform the management of the national currency.
The Chancellor said Mohammed Saleh, the burden posed by the mass cash payment system, as reflected in the revenue budget figures, for example, trillions. Mohammed Saleh pointed out that the draft dropping zeros from Iraqi dinar is based on optimistic forecasts the prospects for the development of the Iraqi economy in the coming period.
He revealed the central bank adviser said the bank plans to return to the coin because of their preferences on paper currency, especially from small groups that are not worth the trouble worth dealing with.
Mohammed Saleh refused to set a date to launch new dinar, saying that the management reform of the national currency a strategic project, but stressed that the central bank will be within a month of the implementation of an integrated plan to the Cabinet the last word in this regard.
Expert in the Ministry of Finance Crescent Miller predicted that the result in the deletion of zeros from lower inflation, noting that countries such as Turkey and Brazil prior to Iraq in this area.
Miller noted the characteristics of the new currency trading is expected after this procedure, including the adoption of the three languages are Arabic, Kurdish and English, only the symbols of civilization and to prevent the use of pictures of any official.
The expert in the Ministry of Finance on the conviction that the process of replacing the currency will be smooth, especially as the old currency will remain in circulation alongside the new currency of time to allow a gradual withdrawal of steps does not affect the daily exchanges.
Economic analyst, Basil Jamil Antoine ruled economy is affected by changing money, but called for an awareness campaign to prepare public opinion and to the logistical procedures in financial institutions involved.
One benefit of the consumer citizen is expected to result directly delete the zeros of the possibility of using vending machines that are still unknown in Iraq because of the technical and practical difficulties in the mobilization of these ATMs in Iraqi dinars now.
Contributed to the file via Radio Free Iraq in Baghdad, Khalid Waleed
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