"QFS CONVERSATION: " IT IS FISCAL POLICIES THAT RAISE THE VALUE OF CURRENCIES" WITH GOLDILOCKS, 6 AUGUST

 GOLDILOCKS

The Supervisory Committee for the Restructuring of Rafidain Bank met. One of the topics of major interest in the meeting was achieving Financial Stability.

This meeting comes after a meeting with the IMF Article 4 consultation. One of the key components of this meeting was the following. "Without policy adjustment, the risk of medium-term sovereign debt stress is high and external stability risks could emerge." 

Iraq has achieved great strides since the opening of their budget in 2023, but they still need to expand in revisions regarding their fiscal policies. 

Many emerging economies are beginning to realize that devaluation of currency leads to more public and governmental debt along with imbalances in the private sector in pay. This lowers the GDP for a country and the values of currency over time.

It is fiscal policies that raise the value of currencies creating a shift in a country's economy by boosting from within the economy natural growth. 

Many emerging economies are considering being part of a trade weighted basket. By pegging to a trade-weighted basket, debtor countries can reduce the effect on their international trade. The listing goes on a trade weighted index (TWI).

A TWI weighs in the average prices of several domestic currencies to come up with average prices for each currency; rather than, the single average of a currency standing alone.

This would bold well with countries who join the BRICS Nations in determining new price correlations for international trade. 

This shift in focus towards raising the level of pay in the private sector is going to actually bring in more revenue towards the government itself. The result is a self-sustaining government reaching beyond dependence on oil to each other who have various aspects of the economy of which all can contribute to the boosting of its economy. 

© Goldilocks

https://cbi.iq/news/view/2631

https://www.elibrary.imf.org/display/book/9781557751713/ch007.xml

https://www.elibrary.imf.org/display/book/9781557751713/ch007.xml