Economist: The Decrease In The Actual Value Of The Dinar Will Lead To Inflation
12/28/2024 Economist: Economic expert, Munar Al-Abidi, confirmed that “the value of any currency is determined based on two basic factors: the amount of currency issued, which is the total cash pumped by the central bank, and the size of reserves, which includes foreign currencies, investments, and gold held by the central bank.”
Al-Obaidi said in a tweet seen by (Al-Masry - Today, Saturday), that “at the end of 2023, the amount of currency issued reached 101 trillion dinars, and the value of official reserves reached 145 trillion Iraqi dinars.”
He added, "As for the situation at the end of 2024, the amount of currency issued remained at the same level of 101 trillion Iraqi dinars, and the value of official reserves decreased to 139.7 trillion Iraqi dinars."
He pointed out that "the continued decline in the actual value of the dinar will lead at some point to an increase in inflation as a result of the decline in the strength of the dinar compared to reserves alone. All this while the average price of Iraqi oil was high, so how will things turn out in the event of a decline in oil prices?"
He continued, "The impact on the value of the Iraqi dinar, despite the stability of the issued monetary mass, the decrease in the value of official reserves by 5.3 trillion Iraqi dinars led to a decline in the purchasing power of the dinar, and as a result of this decrease in reserves, the actual value of the Iraqi dinar decreased by 5.3%." https://almasra.iq/113717/
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