Government Advisor: “Petro Dinar” Requires Good Stock of Foreign Currencies and Gold
The Prime Minister's advisor for financial affairs, Mazhar Muhammad Salih, explained today, Sunday, that "the adoption of the dinar in pricing oil, or what is called (petro dinar), requires, first of all, the availability of foreign reserve currencies or gold, as Russia did when it purchased Russian oil with gold-backed rubles, which caused problems that we will discuss later."
He added in press statements that "these foreign reserves must be available (as a necessary condition) and operate according to a high standard of efficiency that guarantees the stability of the exchange rate linked to oil (the petro dinar) in order to hedge against oil price fluctuations to ensure the stability of the exchange rate (the petro dinar) itself."
“Linking oil sales to the dinar on a fixed basis with oil prices instead of the foreign reserves base means linking the dinar to the oil asset cycle first, and that oil is sold according to global oil prices. If the exchange rate of the dinar (petrodinar) against the (petrodollar) is fixed, and oil prices fall, then the demand for the dinar for accounting purposes will certainly fall, and the dinar will be exchanged for oil in larger quantities and the demand for the (petrodinar) will be lower, and vice versa,” he added.
He pointed out that "any deviation between oil prices (petrodollar) and the exchange rate (petrodinar) according to international market data will be considered a cost that requires compensation by paying fewer dinars or collecting a higher dinar in the opposite case," indicating that "international reserve currencies are foreign currencies held by central banks and global financial institutions as part of their cash reserves. These currencies are used in international transactions and settling debts between countries, and are a standard for international payments and facilitating global trade." link
No comments:
Post a Comment