Money and business Economy News – Baghdad Adviser to the Prime Minister for Economic Affairs, Mazhar Muhammad Saleh, said that the Central Bank of Iraq will address the recent rise in the dollar exchange rate, noting that annual inflation in the country only exceeds 3%.
In an attempt to control dollar smuggling, the Central Bank issued in previous times a number of measures with the aim of contributing to raising the value of the dinar or reducing the large demand for the dollar.
The difference between the official exchange rate of 1,320 dinars per dollar and what is sold in the market still encourages dollar smuggling networks to increase their activity to achieve profits, in addition to the impact of this matter on the daily life of the Iraqi citizen.
Recently, the exchange rate of the US dollar against the Iraqi dinar rose to about 1,495 dinars.
"Highest international reserve base"
Mazhar Muhammad Salih said, “The fixed exchange rate system in Iraq is based on a base of international reserves that are the highest in the history of Iraq and its monetary policy, and the foreign currency covers a percentage of more than 100% of the total currency currently exported.” He explained,
"In light of the strength of the official central exchange market, the exchange rate of the dollar to the dinar in the parallel market today in our country does not constitute any relative importance in influencing the stability of the general price level, which has become stable in its components and trends as a result of the influence of the exchange rate factor."
The official financing currently dominates foreign (import) trade financing, amounting to 1,320 dinars per dollar. Saleh pointed to
“the stable trend of the exchange rate, centered around the stable external value of the dinar, which is embodied by the state of stability in the relative prices of goods and services to a large extent, as annual inflation in our country does not exceed only 3%.” The Prime Minister’s Advisor for Economic Affairs noted that,
“In light of the strength of the foreign reserves supporting the Iraqi dinar, whose value as liquid foreign assets exceeds 100 billion dollars, the official exchange market, as a general trend, will remain dominant in containing any colored noise or ambiguous information that is affected by the parallel market.” For disbursement in short periods, due to urgent international or regional political events here and there, or in adapting some instructions regulating the monetary market. Saleh stressed that
"The decline of the phenomenon of dollarization"
“after the decline of the phenomenon of dollarization in internal transactions, especially in contracts, obligations and payments inside the country since last year and its legal ban, the parallel exchange market has begun to have its general impact today only on a narrow economic scope of prohibited transactions, practiced by informal markets at a rate of 10%.” “Of the total transactions of supply and demand for the currency.”
He explained that “the stability of the dinar-to-dollar exchange rate that the country is witnessing, even in the secondary markets mentioned above, is a real and established stability.
Rather, it is derived from the strength of the influence of the price and quantitative factors of the monetary and financial policies, and
their integration in imposing overall price stability in the country, and containing the inflationary expectations that they were causing.” Parallel exchange market forces during the past years.
The Prime Minister's Advisor for Economic Affairs pointed out that
"the informal secondary market, due to the freedom of external transfer, is under the influence of the official exchange market rate, whose operations are constantly expanding in the interest of dealing at the fixed official exchange rate. - https://economy-news.net/content.php?id=44995
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