Saleh: Explained the Goad of the CBI regarding selling dollar outside the platform according to supply and demand, 24 Nov
Today, Thursday, the financial advisor to the Prime Minister, Mazhar Muhammad Saleh, explained the goal of the Central Bank’s circular today regarding trading the dollar outside the platform according to supply and demand, indicating that it will provide high flexibility in supply that contributes to market stability. Saleh told the official agency,
“Liberating the operations of buying and selling foreign exchange is not an alternative to the policy of defending price stability and the government’s plan to interfere in the stability of the general level of prices.”
Saleh added, “Families, natural and legal persons in Iraq are hoarding amounts of cash in foreign currency and outside the banking system amounting to billions of dollars and are subject to two phenomena.
The first is the difficulty of disposing of their circulation outside the laws of supply and demand that create the currently free exchange rate due to deterrent legal controls and
the second is the contraction of a large monetary supply from Liquid foreign currency, which has stopped moving in the form of a cash hoarding that is immobile and outside the circle of supply.” He continued,
"This exacerbates exchange rate fluctuations under the influence of (a liquidity trap in foreign currency resulting from an expected positive wealth due to the rise in the value of foreign exchange against the local currency)." Saleh added,
“Therefore, liberalizing the climate of dealing in foreign currency and giving it a white character will provide high flexibility in supply that contributes to reducing noise in the secondary exchange market,
which provides a flexible supply of foreign exchange that leads to market stability, supported by a government policy that provides commodity supply through the official price.” “For highly stable exchange and financed at an exchange rate of 1,320 dinars per dollar.”
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