Thread: Raising The Value Of The Dinar

اEconomic : Raise the value of the Iraqi dinar and its impact in reducing inflation rates

Contrary Reza Ayub diamantaire
The decision by the Central Bank on the rise in the value of the Iraqi dinar against the dollar to reduce inflation in the economy now, as well as raising interest rates to levels higher than in the past and payment deadlines for various encouragement

To save all of this piece of the action, which is the heart of the duties of the Central Bank, but the main problem that these actions that have been taken were not synchronizing with a stable economic interact with all mechanisms in the economy in a harmonious manner and gross domestic product comes from a variety of sources productivity in the economy, but to come and see what is on the economic scene in the country.

1- One of the Chairperson of the economy, which is a compass to guide savings and investment in the country is the stock exchange or market Iraq securities and this market, we find that the poor security situation brought the case on the fact that most of the shares traded companies declined to the lowest of the dinar one after that the prices of those shares ranging between five dinars session dinars or more, as most investors as a result of the deteriorating security situation and fear for themselves from the kidnapping and murder. The well as their families, they transfer their investments to the Amman stock exchange and stock primarily with the Gulf States and other According to statistics from the Amman stock exchange that Iraqi investments in the stock exchange to quote the three billion dollars, and if we look here, we will see how quickly the Iraqi economy from the lost capital in the economic cycle and how the result will add capital turnover.

2- GDP Iraqi derived all its resources of oil, as we know that the Iraqi economy is one-sided and was supposed since 2005 that the government measures that encourage the private sector to play its role and the advancement of the Iraqi economy through the actions of soft loans and the laws of protection for local industries as well as the procedures for customs control on the imports of goods into Iraq compete for the produce of the private sector and to develop and support projects in the private sector which have an impact on the lives of citizens.

We find it of the foregoing that the private sector remained weak and marginalized and unable to embrace the challenge individually without government support Had for a specified period and within a studied what led to the increase in volume is inflation and be reflected in the the rising price of goods and services and are most of those goods and services imported This pushed the traders to lift from Akiam those goods and services, including parallels the decline in the value of the dollar in front of the Iraqi dinar according to the submission made by the Central Bank of Iraq and the result led to a the erosion of the value of the Iraqi dinar before the dollar once again due to the increase in prices including parallels the value of during the period of imported to preserve the ratios reasonable profit and with the minimum level, this the part and the other side is the the scarcity of import of the goods from before traders because of the security situation and the terrorist threat to traders to close down the their shops.

3- Three - that most local industries parked This result leads to the curtailment of resources derived from the industrial sector as well as the lack of the state's contribution and, as I said before, earlier in the activation of this sector, including those towards maximizing resources and have a share in the GDP.

4. -agricultural sector and the result of the opening of outlets in the country of import controls and without increasing the demand for agricultural products by all citizens led to a reduction in the role of the agricultural sector in any addition of the gross domestic product, as well as to weaken its ability to compete and, consequently, the evolution and growth.

And return once more to the procedure of the Central Bank with regard raise the value of the Iraqi dinar before the dollar we find that this procedure with each the suffering of the Iraqi economy from the stoppage in the process the entire economic because of terrorism as well as because of the underdevelopment of State institutions to be relevant after consideration of the events and beat of personal interests and selfishness for some all of that led to a reduction in the impact of dinar's value once again before the dollar with the procedures the Central Bank of Egypt because of the attempt to traders in maintaining on their right to non-loss result the difference between the value of the goods imported timely and between the teams dinar rate of exchange against the dollar as well as of a decline of import since the no less ferocious on the two months because of the deterioration of the security situation and a continuous basis what make the before of the goods declining about the survival of the same level of demand.

:In order to emerge from this vicious must follow :

1-activating the role of the private sector and to give sufficient flexibility to move in the hands of the laws and legislation in line and by the Constitution

2- .Two-and start working now since the principle of small projects through loans simple to activate the economic cycle in the country and to combat unemployment through these projects.

3- .Three-start from now to activate the industrial enterprises of the public sector that can through rehabilitation to provide service to the community and absorb part of a reasonable unemployment.

4- Four-start housing projects, according to the basic needs of the community to ensure that such projects are implemented by the private sector with some of the projects that wish to implement the public sector, as we know that housing projects move more than 60% of the economic sectors in the country as well as it would eliminate the major proportion of unemployment.

4- promote the agricultural sector through soft loans through the Agricultural Bank, as well as in the first stage, the provision of fertilizers, pesticides and seeds at affordable rates to help re-production format which allows it to block the local market need, as well as the provision of the means of agricultural production and building Almbazl other hardware and channels and provide incentives for farmers who have known that production is increasing year after year.

5- important issue and last, namely, that the security situation You can not disbanded only through dialogue and the political aspects, but through the revitalization of joints the economic process including suited and maintaining the continuity Durán all sectors of the economy and in a flexible manner gives the economic process the dynamic required in the face of any pressures may be subjected to This can be done only through coordination between the political side and the economic side like someone who strikes a of U.S. MUSICAL it could not depends on the the guitar player without others, as the total instrumentals instrumentalists gives uncontrollably consistency and makes it Ttarb comforting Thus economy when left most of its sectors for Atazv in tune with the Central Bank of the Central quitted uncontrollably anachronism and made life miserable comforting, and when spoke in political in economic language before politics and had a friendly the Platform economic when that one be delighted to we are fine, Allah willing.

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No date but originally posted by SGS 09-01-2007, 03:05 AM

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Building on the policy of the Ministry of Finance : the exchange rate of the dinar would arrive at 1260 per dollar

Mohsen Al-Gabri - 06 / 01 / 2007-17:07

According to relevant information markets currency and the Ministry of Finance that the final decision taken by the Ministry of Finance is planning firmly to communicate the value of the Iraqi dinar to 1260 dinars compared to the American dollar, and the dinar rate of exchange has started improving and steadily since the beginning of the Minister of Finance of its new policy aimed to improve the currency exchange and reducing inflation rates in order to raise the zeros by increasing rents financial staff, and the Iraqi dinar ranges purely between 1470 and 1480 before three months that began the path towards gradual decline.

Link: Translated version of ..:: æßÇáÉ ÃäÈÜÜÜÜÜÜÜÜÜÜÜÜÜÜÜÇÁ ÈÑÇËÇ ::..

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Governor of the Central Bank : This year's budget focused on increasing the volume of investment in Iraq

Baghdad : Ali Jasim

Dr. Sinan Shabibi Governor of the Central Bank that this year's budget, the budget investment because it focused on the size of the investment Ziada.
And Shabibi said that the Central Bank's role is to address the imbalance resulting from the development process that will produce changes in the economic structure are basic.

He pointed out that the work of the Central Bank is to achieve development in a stable monetary attention through all means and policies to achieve economic stability and moderation in the environment straight and moderate inflation rate.
He continued : "Our budget for the preservation of resources, and will be achieved through combat inflation.
Stressing that the bank had several measures including raising the exchange rate of the dinar.
He pointed out that the impact of this action on the budget through the impact on the purchasing power of the government, will increase by addressing inflation.
He added : Shabibi that this policy will increase the confidence dinars, which will pull some of the money to the banking sector and the rationalization of government spending because of its impact on inflation.

He indicated that this action will lead to the reduction of prices of import goods such as private sector imports and the import of the government's development that come from the conversion of the Iraqi dinar to the dollar.
He added that this policy at the time weakens the ability of the government to buy the dinar, it strengthens Aldenarabraghi owned by the government.
Pointing out that the bank wants as a means to affect the economic and monetary policy by making the dinar a valuable and powerful.

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Posted on RC...18-01-2007

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Iraqi Central Bank expects more investments in 2007



MENAFN - 21/01/2007




MENAFN) The Governor of the Iraqi Central Bank said that the 2007 budget will focus on increasing the investments size and volume in Iraq, Iraq Directory reported.

He indicated that the Central Bank's task is to deal with the changes produced by the development process and to moderate inflation rates.

He added that the bank has raised the exchange rate of the Iraqi Dinar in order to increase the confidence in the Iraqi currency and to reduce the prices of imported goods.

MENAFN - Middle East North Africa . Financial Network News: Iraqi Central Bank expects more investments in 2007

الاخبارNews : Financial : obliges the government to deal exclusively with the Iraqi dinar

The Ministry of Finance ordered the state funded centrally and self-dealing transactions that the buying and selling Iraqi dinars exclusively. The ministry explained that the uncles in this procedure, also includes public companies and the remainder to be paid from the assets of the institutions, services and self-financed government bodies and public companies, including foreign currency equivalent of the local currency

Adding been funded centrally directed circles that the deposit amounts previously accepted date of the foreign currency that still exist in funds to the current account in the name of the cash accounting in the Central Bank and the corresponding restore Iraqi dinars final income. He pointed out that this action aims to raise the value of the Iraqi dinar against the dollar and foreign currency, which would serve the economic development reflected the benefit of Iraqis

كل العراق - بثينة كريمAll Iraq - Karim Buthaina

RE-Posted by $onedaysoon$ on 05-01-2007, 10:17 AM music to his ears...no date provided

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Originally Posted by kiko

Economic Inflation is the prominent event in 2006

The phenomenon has grown more frightening and threatening to disrupt production sectors

02/01/2007
Source: Translated by IRAQdirectory.com

Iraqi economy experts find that the economic inflation phenomenon, which has begun to increase and had reached a frightening threat to the Iraqi economy, is one of the most prominent events in the country during 2006.

They emphasized in an opinion poll: "When the inflation rates in the countries of the world rise, they will rise to varying fractional, and this will compel the governments to make adjustments and changes in the economic decision, but the phenomenon in Iraq have taken another foreshadowing form, if it is unleashed, it will disrupt all productive sectors".

The economic expert, Dr. Madhar Mohamed Salih, said: "The dangerous phenomenon of inflation experienced by the Iraqi economy is one of the most serious economic phenomena because it is still continuing without finding any radical solutions to eliminate or control it effectively", pointing out that "part of the State policy to eradicate this phenomenon was to raise interest rates and other measures which are considered procedures for controlling and not eliminating it".

He explained: "The things that could be considered high profile events during 2006 is the fruitful movement of the Iraqi government for rescheduling the debt of commercial banks and foreign private sector to the government and quenching them with an international bill equivalent to the conditions of the Paris debt, amounting to 20 billion dollars".

Dr. Mohammed Risan, from the Economic Studies Center, said: "the economic inflation is one of the most prominent economic phenomena experienced by Iraq in 2006. It began to grow from the beginning of the year and continued without taking effective steps to stop or reduce the rate of its growth; which means that the country will live a serious economic crisis if effective steps were not taken to deal with it".

He explained: "The decision of the current Iraqi government to raise the prices of fuel by 125% compared to its prices last year, had a significant effect in raising the prices of foodstuffs, consumer goods and others; which created the appropriate environment for the growth of the phenomenon of economic inflation", pointing out that: "This did not come from the vacuum, but from the pressure imposed on Iraq by the International Bank and the IMF to reduce its debt, in exchange for raising the fuel prices without seeing the negative side, which Iraqis would live as a result of international resolutions that have more negatives than positives".

Dr. Sundus Abd Jassim, professor of international economics at the Faculty of Management and Economics in Baghdad explained: "The dramatic decline in the dollar exchange rate during the latest weeks is a phenomenon which should be taken into consideration because of the economic implications that could be reflected positively on the value of the Iraqi dinar".

She said: "The optimistic predictions for rehabilitating the deteriorating Iraqi economy coincide with starting the work by the budget of 2007; however, those predictions should be backed up by the State to raise the value of the Iraqi dinar versus foreign currency", adding: " the Iraqi government can eradicate the phenomenon of economic inflation through ongoing work to develop plans and programs to reduce the value of foreign currency against the Iraqi dinar".

It is noteworthy that the rate of inflation during the last year ranged between 25 and 30 per cent, while reached up to 77% during the current year.

http://www.iraqdirectory.com/DisplayNews.aspx?id=2867

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11:14 a.m. December 8, 2006

"BAGHDAD, Iraq – Iraq's dinar currency has risen to a nearly two-year high against the U.S. dollar, as the nation's central bank tries to fend off skyrocketing inflation by buying up the currency with dollars at its daily auctions.
Most of the money the Iraqi government earns is in U.S. dollars because oil exports are the main source of its income, and the bank has about $14 billion in foreign assets, said Mudher Qassim, the Central Bank of Iraq's director of statistics.

On Thursday, the last day of the work week in Baghdad, the central bank led the way at its daily currency auction, which saw 25 million U.S. dollars sold by about a dozen banks, the central bank said. Even larger amounts of dollars were sold during 10 of the auctions in November.
“Our goal is to reduce inflation, which is now running at about 50 percent, by improving the dinar and thereby making imported goods cheaper,” Qassim said in a telephone interview, adding that more than 80 percent of all Iraq's tradable goods are imported, he said.

In a report in August, the International Monetary Fund also said inflation was escalating in Iraq. The 12-month rate of inflation ended 2005 at 31.7 percent, but inflation then accelerated, with 12-month inflation reaching 58 percent in May 2006, the report said.

Iraq's Central Bank also is trying to fight inflation by raising interest rates. In November it raised its key policy rate to 16 percent from 12 percent. Wednesday's report from the bipartisan U.S. Iraq Study Group said that by the end of 2006, the bank will raise rates to 20 percent and appreciate the dinar by 10 percent....

“The dinar has steadily increased against the dollar because of the central bank's efforts to stabilize the currency and control inflation,” said Hussein al-Uzri, president of the state-owned Trade Bank of Iraq.

“Iraqi consumers get oil and food that is government subsidized, so the rise in the dinar won't have an immediate effect on them and the economy. It will take some time. But as Iraqis realize the value of the dinar is rising, they will stop immediately exchanging their currency into dollars,” he told The Associated Press. "

SignOnSanDiego.com > News > Business -- Iraq central bank buys up currency to fight inflation

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The Central Bank denies reducing the rate of the dollar against the dinar

14/12/2006

The Iraqi Central Bank denied rumors on its quest to determine the rate of the American dollar against the Iraqi dinar value of one thousand dinars.

Dr. Madhhar Mohammad Saleh, Head of Research and Statistics in the Central Bank, said in a meeting with reporters and Iraqi economists last Sunday: that the issue of determining the exchange rate of the dollar against the Iraqi dinar is not possible, now, for two reasons: first, the reserve capacity of the bank is not absolute, and second is the factor of the price increase.

He added: observing the general trends point to higher prices in return for a lack of improvement, which makes the dollar reduction to this value impossible at the present time, in addition to the limited financial capabilities of the Bank.

He explained: that the significant decline in the dollar, directly after the fall of the previous regime, was caused by the flow of billions of dollars to Iraq and distributing them among employees as well as opening exchange and restrictions. He pointed out: that at the present time and because of the deterioration of security and the high rate of inflation, the devaluation of the dollar is not expected at all.

http://www.iraqdirectory.com/DisplayNews.aspx?id=2761

Kiko originally posted this on 14-12-2006, 07:28 AM and said it was old news reprinted....if anyone can find an earlier article please post it

See Posts #8, #17, #54 and #62 for comparison of this article

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INTERVIEW-Iraq finmin expects dinar to strengthen 13 pct

11 Dec 2006 17:23:43 GMT
Source: Reuters

By Mariam Karouny

BAGHDAD, Dec 11 (Reuters) - Iraq's government expects the dinar to strengthen by 13 percent against the dollar by early 2007 after raising interest rates to limit the use of dollars in the economy and stem inflation, the country's finance minister said.

Minister Bayan Jabor told Reuters on Monday that the government has targeted an exchange rate to reach 1,260 dinars to the dollar in the first three months of 2007 from the current level of 1,500 to the dollar.

The 2007 $41 billion budget assumes an exchange rate of 1,260 dinars to the dollar, he said, adding the cabinet would discuss the draft budget on Saturday before hopefully sending it to parliament next week.

"There is an expected increase in the value of the dinar. The exchange rate is expected to drop from 1,500 dinars to the dollar to 1,260 in early 2007," he said in an interview.

"We will calculate the budget based on 1,260 dinars to the dollar and based on 50 dollars per barrel (of oil) and production of 1.7 million barrels per day.

"The central bank has started increasing the interest rate from 12 percent and it has now reached 16 percent."

Jabor said there were no immediate plans to raise interest rates further. The central bank increased its main interest rate to 16 percent from 12 percent on Nov. 8, according to the bank's Web site.

He said the aim of raising interest rates was to strengthen the dinar to fight dollarisation -- the use of dollars on a daily basis alongside the local dinar currency -- to stem high inflation and boost Iraqis' confidence in the domestic currency.

"It is to fight dollarisation. Every economy that depends on the dollar is considered weak," he said.

"Now I can say that Iraqis should use dinars instead of dollars. When we increase the value of the dinar it will help ease inflation, which is now at 56 percent. We expect inflation will decrease," he said.

Iraq's inflation rate hit 76.6 percent in August.

But sectarian violence is claiming the lives of more than 100 Iraqis a day and threatening to push the country into civil war. The daily violence has scared off foreign investments in the oil rich country.

A recent UN report said there was growing unemployment and poverty rates in Iraq. Corruption is endemic and state owned industries are inefficient. Oil is the main source of revenues but oil sector is suffering from years of mismanagement and violence.

"There is also a psychological factor -- Iraqis need to trust their currency when it is stable or strengthening."

The International Monetary Fund, which has backed Baghdad with a $685 million standby credit agreement, has also warned that rising inflation could undermine economic well-being and hinder the goal of improving the welfare of ordinary Iraqis.

Another problem facing the government is the high rate of unemployment, mainly among the young. Officials say the unemployment rate is between 30 and 40 percent.

Jabor said he was not worried by possible negative consequences of strengthening the dinar because the Central Bank had enough reserves to support the dinar.

"The dinar is strong -- the central bank is one of the best central banks in the region except for those in the Gulf. We have reserves of $15 billion in foreign currency other than gold, and it is only to support the dinar."

http://www.alertnet.org/thenews/newsdesk/KAR156797.htm

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Putting these 2 articles together

The Ministry of Finance expects the rise in the dinar exchange rate early next year

Justice / follow-An official source at the Ministry of Finance that the government expects the increase in the price of the dinar by 13% against the dollar by early 2007 after raising interest rates to limit the use of the dollar in the economy and curb inflation.

.Pointing out that the government aimed at access at the rate of exchange in to the 1260 dinars to the dollars in the first three months of 2007 from the current level 1500 dinars of the dollar, "he said, emphasizing that the budget of 2007 supposes the rate of exchange of when 1260 dinars against the dollar adding that the Cabinet would discuss the the draft budget in the hope submitting them to the parliament next week, explaining that the budget will be established on the basis of a dollar rate of 1260 dinars to the dollars and '5' dollars for a barrel of oil with the production of 1,7 million barrels per day, and added that the CBE started raising the rate of interest from 12% to 16% currently pointing to the lack found immediate plans to continue raising interest rate n and pointed Almusdrali that the goal of the RAISE INTEREST RATES is the to strengthen the dinar and the fight against the dollarization and curb inflation and to strengthen the confidence of Iraqis in the local currency affirming that the any economy depends on the dollar longer weak, it is recalled that the Central Bank of Iraq that had been denied earlier that be of the bank faith to determine the or the exchange rate of the dollar against the Iraqi dinar for two reasons First : standby capacities of the bank non-absolute and II is attributable to the increase in factor prices.

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