Saleh supports continued use of currency auction; contributes to the stability of the exchange rate

Posted by on Nov 21, 2013 | Leave a Comment

They called to reconsider granting leave enter currency auction

confirms experts and specialists need to reduce the effects of the parallel market to stabilize the market and the exchange rate of the dollar against the dinar, pointing to the importance of maintaining the experiences of economic participation in the auction currency.

effects of the parallel market
in this context called economic expert, Dr. Mohammed Saleh appearance to minimize the effects of the parallel market exchange rate of the dinar against the dollar, because the reduced significantly contribute to the stability of the exchange rate of the dollar. He said in a statement to the (morning) that it is necessary to reconsider granting banking companies and financial transfer licenses to enter the auction currency because plentiful harm the economy and affect significantly the stability of the dollar in the local market., And pointed out that those companies lacking greatly to the experience that qualifies them to compete private banks while private banks have become familiar enough experience to enable them to post the central bank to control the exchange rate of the dollar. Recalling the establishment of private banks that fall under the Association of private banks in reducing the price of the dollar last summer through coordination with the Central Bank after the market saw the Iraqi decline is unprecedented in the exchange rate of the dinar against the dollar.

auction currency
Saleh explained that he was supposed to sell the central bank dollar to the companies in order to sell them at a price that it deems appropriate for civil sells to banks at subsidized price to create a state of balance and entrench the freedom to choose the citizen to the point of buying of the dollar. Indicating that the dollar buying from auction sale currency (for banks) Best of the citizen from the sale of the Central dollar exchange offices in local markets being sought to make profits fictional at the expense of the economy.

called for reducing the number of intermediaries in the sale of the dollar directly and be selling at the official rate and not as it gets at the moment in exchange offices in local markets. Also, higher interest rates reduces investors and businessmen on the assumption, while falling encourage investment, which is reflected in the follow-up the economy and improve the value of the local currency. Stressing the importance of reducing the rates of inflation, as the lead inflation to the devaluation of the national currency and accordingly changed exchange rate.

supervision and control of the adviser said the Iraqi Institute for Economic Reform d. Ahmed al-Husseini: that of the duties of the central bank supervision and control over the parallel market and not on the banking companies, because the parallel market plays a big role in the pressure on the economy by crowding out banks in the auction currency.

said in an earlier statement (morning) that the Bank’s role Central oversight may be suffocating at times on these companies for the purpose of providing an opportunity for banks to exercise its natural role in the work, as the private banks began to complain about the existence of competition from banking companies, which greatly influenced the deterioration of the activities of these banks.,

and pointed out that the banking companies registered Newly not possess experience in the market and the mechanism of the real work to them, and this is what caused by a volatile exchange rates of the dollar and rising rates in the domestic market. variables cash For his part, academic economic d. Essam المحاويلي that the large number of companies competent in brokering the sale of the currency in light of monetary policy in Iraq may cause a burden on monetary variables other, and thus would be a burden on banks in general by calculating the interest rate and draws customers for banks.

pointing out that the number of banking companies large increase of the proportion of demand while the supply is limited what is causing the gap request because the money supply today is managed from the central bank, and therefore, the monetary policy of Iraq did not unleash the market to take its course, because the amount of money supply is controlled by a central bank and demand unspecified and open because of the increased registration banking companies shall affect the stability of the currency through the creation of a gap request for viewing a limited currency What causes an economic problem for the country.

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