"Iraqi currency needs radical reforms that commensurate with location of the country," economist says
The Iraqi situation needs radical reforms in the coming period, in line with foreign currency to support the local market, the oil situation and economic development in the country," an Iraqi economic expert said on Saturday.
"The next stage requires activating the role of the government to make radical reforms to the issue of financial currency and how it fits with the value of foreign currencies, particularly the euro and the role in moving the Iraqi market," Ali Kahiachi said.
"Iraq has been unable during the last period to reinstate the currency to its position in the global market because of the confused economic situation in the country," he added.
Changing the currency in Iraq is related to the political situation and other major changes. When the Iraqi state was founded in 1921 a new currency for the Iraqi Kingdom was printed and continued until July 14,1958, after the announcement of the Republican system and the currency was replaced by the Republic currency; and after the fall of the former regime in 2003, the currency was changed and it is dealt now in the market.
The current currency suffers from inflation in the money supply, and this promoted to economic experts to ask the Iraqi government to make reforms and organization, particularly eliminating the zeros to reduce the amounts of money found.
"It is not easy to make real reforms in the value of the Iraqi dinar, but it also possible to put development strategy to change the situation of the Iraqi currency," Kahiachi said.
"The Iraqi economy could be much better than neighboring states, but it is inaproportionate to its oil situation," explaining that "the Iraqi currency trading can't be improved except after the deletion of the zeros to reduce the huge money amounts," he suggested.
The Central Bank of Iraq excluded recently deleting the zeros of the currency in 2011, stressing that this is linked to the extent of stabilizing in the economic situation in the country, at a time when the numbers indicate that the Iraqi currency is amounting to more than 27 trillion (t) dinars in 2010.
The Central Bank of Iraq (CBI) in Baghdad has four branches in Basra, Sulaimaniyah, Erbil and Mosul, and was founded as an independent Iraqi bank, and according to the law of the Central Bank of Iraq, issued on March 6, 2004, it will be responsible for maintaining price stability and the implementation of monetary policy, including exchange rate policies, management of foreign reserves and the issuance and management of currency, as well as regulating the banking sector.
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