SUMMARY OF Recent Interview from Iraq about the topic of the Project to Delete the Zeros BY THE ECONOMIST DR. SAFWAN AND DR. AHMED, 14 AUGUST

 Recent Interview from Iraq about the topic of the Project to Delete the Zeros from Baghdad by the academic and expert Economist Dr. Safwan Qusay and Dr. Ahmed Hal, Professor of Economics, at Al-Mustansiriya University

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THE REMOVAL OF ZEROS FROM THE CURRENCY 

 This process is known as "redenomination," and it involves adjusting the nominal value of a country’s currency, typically by removing zeros from banknotes and coins to simplify transactions and improve economic stability.

Overview of the Project to Delete the Zeros

Objective: The primary goal of deleting zeros from the currency, also known as currency redenomination, is to simplify financial transactions and improve the efficiency of monetary policy. This process usually accompanies broader economic reforms aimed at stabilizing and strengthening the economy.

Key Figures:

• Dr. Safwan Qusay: An academic and expert economist who is likely providing insights on the broader economic implications of the redenomination project, including its impact on inflation, purchasing power, and public confidence in the currency.
• Dr. Ahmed Hal: A professor of economics at Al-Mustansiriya University, who may be offering a more detailed analysis of the project’s implementation, potential challenges, and the expected outcomes for the Iraqi economy.

Recent Interview Highlights

Dr. Safwan Qusay:

• Economic Impact: Dr. Qusay might discuss the potential benefits of redenomination, such as simplifying accounting and pricing, reducing the cost of handling large denominations, and potentially enhancing economic stability.
• Public Perception: He may also address how such a significant change can affect public confidence in the currency and what measures are being taken to ensure a smooth transition.

Dr. Ahmed Hal:

• Implementation Challenges: Dr. Hal could focus on the practical aspects of implementing the redenomination project, including the logistical challenges, the timeframe for the transition, and the necessary adjustments in banking systems and financial institutions.
• Historical Context: He might provide a historical perspective on similar projects in other countries and the lessons learned that could be applied to Iraq’s situation.

Broader Context

Redenomination projects are often part of broader economic reform packages and can be influenced by various factors, including high inflation rates, a need to stabilize the currency, or efforts to modernize the financial system. The success of such projects typically depends on clear communication with the public, effective implementation strategies, and strong coordination between governmental and financial institutions.

In the recent interview with Dr. Safwan Qusay and Dr. Ahmed Hal, the discussion centered on the ongoing "Project to Delete the Zeros" in Iraq, with a focus on its implications for financial inclusion and the broader economic landscape. Here’s a summary of the key points they raised:

Key Issues Discussed:

1. Financial Inclusion:

   • Impact on Liquidity: The project’s goal to remove zeros from the currency has a direct impact on liquidity. By requiring individuals to exchange old currency for new, it compels people to deposit their money into banks. This process essentially pulls liquidity out of the informal economy and funnels it into the formal banking system, thereby increasing financial inclusion.
   • Bank Deposits: Dr. Qusay and Dr. Hal highlighted that this mandatory exchange helps to increase the volume of deposits in banks. As people are forced to bring their old cash to financial institutions, it expands the base of depositors and encourages the use of formal banking services, which is crucial for financial inclusion.

2. Re-pegging from the Sole Dollar Peg:

   • Diversification of Currency Peg: The discussion also touched upon the need to consider alternatives to Iraq’s current reliance on the US dollar peg. They explored the benefits and drawbacks of potentially diversifying the currency peg or adjusting the country’s monetary policy to reduce dependence on the dollar.
   • Control of the Dollar: Strategies for controlling the dollar’s influence were also examined. This includes measures to stabilize the domestic currency and manage foreign exchange reserves more effectively.

Pros and Cons of the Project:

• Short-Term Benefits:

  • Simplification: The removal of zeros simplifies transactions and accounting processes. It reduces the need for large denominations and makes prices easier to manage and understand.
  • Encouragement of Formal Transactions: By drawing more money into the banking system, the project encourages the use of formal financial channels over cash transactions.

• Long-Term Considerations:

  • Economic Stability: Long-term success will depend on the broader economic environment. For instance, effective control over inflation and a stable currency are critical to ensuring that the redenomination has lasting benefits.
  • Public Perception: The success of the project also hinges on public trust and understanding. Clear communication and education about the changes are essential to prevent confusion and ensure a smooth transition.

SUMMARY :

The interview underscored the Project to Delete the Zeros as a crucial step in modernizing Iraq's currency and banking system.

 By drawing liquidity into banks, it aims to enhance financial inclusion, making it easier for more people to participate in the formal economy. 

However, the project's success will also require careful management of the country’s monetary policy and consideration of alternatives to the US dollar peg to ensure long-term economic stability.

Overall, Dr. Qusay and Dr. Hal's insights highlight the multifaceted nature of the project and its broader implications for Iraq’s economic future.

The discussion reflects a broader effort to stabilize and modernize the Iraqi economy, with a focus on both immediate and long-term goals.