Iraqi Dinar’s Peg to a Basket of Currencies Enhances the Diversification of the Economy
|June 16, 2014||Filled under Iraqi Dinar News|
Iraqi Dinar News –
Called on the Finance Committee and an expert in economic affairs the central bank to the need to activate the financial trading by linking the Iraqi dinar to a basket of foreign currencies and not rely mainly on the U.S. dollar, to build a diversified economy and a flexible retractable face of economic crises present and future.
Said a member of the parliamentary Finance Committee Abdul-Hussein al-Yasiri In an interview for “The term the main currency in the country is among the dinar offset by the U.S. dollar, which is considered the base currency in the trading process locally and globally because of its economic power, affecting most countries of the world.”
He added that “the existence of a basket multiple foreign currencies greatly help to ensure resilient economy can cope with financial crises and their impact on the dinar National, where he owns a system of currency trading has many advantages, such as maintaining the rate of real exchange in the face of financial shocks and the decline in the value of the currency and avoid any exaggeration in the rate of exchange as well as the relative stability of the exchange rate of the currency, as the high value of a particular currency in the basket means lower other currencies for that currency and vice versa, “explained Yasiri that” public acceptance and how widespread the circulation of the U.S. dollar put data by which dispense with the other currencies such as the yen Japanese and European euro and other, which helped to citizen-sufficiency in a single currency more assurance than others.”
The Yasiri that “the central bank bears responsibility for turning financial dealings of the monopoly of a particular currency for the stock market to the entry of foreign currencies competition through the activation of its own laws and the Order for more than 5 different currencies represent countries leading economic and economically strong,” and pointed to “the need to diversify reserves National various world currencies as well as other coins and gold in particular to support the Iraqi dinar and increase financial Rsanth which reflected significantly on the level of improvement in the economy of the country.”
He pointed out that “the exchange rate in any country depends on the balance of payments which arise from factors affecting the presentation of the national currency and the demand for them, any surplus in the balance of payments of the state leads to increased demand for the national currency, which leads to higher disbursement versus other foreign currencies and vice versa.”
In turn, the economic expert Abbas Bahadli in an interview for the “long” to “choose other currencies represent a basket of global economic must be on the basis of serving the national economy and the movement of trade and mutual investment with countries with an economy strong financial, and considers this step to enhance the value of the Iraqi dinar, and reduce the the potential risks to the local currency as opposed to linking them in a single currency as dollar.”
He added that “the increase and diversification of foreign currency and use it as a reserve pick it economically by the Central Bank of Iraq represents addition of monetary policy and help to enhance the value of the dinar by increasing dealing with other countries.”
Explained Bahadli that “money is the measure of the values of goods and services represent one unit of money, for example, dinar standard to calculate the values of things, including the calculation of this process of pricing, which requires the presence of groups of cash representing the complications or parts of them, therefore, is a mediator of the swap between the goods and services as a result of the contradiction between the mechanism barter of goods and services and the market mechanism of freedom of choice, and the decision to purchase or sale “and that” the movement deal depends on the monetary policy of each country, there are states that allows monetary policy trading of its currency outside its borders, and there are other countries to prevent it, such as Iraq, which has become a currency is not allowed to be traded externally, but not taken to support the dinar in the coming years, but through the development of an economic plan national actors on the ground are working to increase production and start-up development projects and attract major foreign investment real new order to ensure the support of the local currency in the coming period.”
He pointed out that “cash tool to ensure the right of possession of the goods and services at any time and place, and because of the different types of currencies in the countries of the world, there are currencies have gained strength from the economy of this country comes the U.S. dollar at the forefront of the currency, which represents the U.S. economy nearly 20% of world exports Then comes the euro as well as the Japanese yen and the pound sterling other than gold and silver, a so-called basket of currencies.”
He pointed out that “the exchange rate of the currency basket is considered a low-risk and change, there is a currency price declines and other price rises have shown a basket of currencies that it is due to the absence of a monetary unit the Common taken by traders as a basis for calculation, which are in the framework of international payments and this leads us to the identification of the exchange rate and the international monetary system.”
The economic reports that the U.S. dollar is a currently almost 86% of the volume of daily transactions in the global market for foreign exchange, which amounts according to the latest statistics by the financial crisis to more than three trillion dollars a day, and the rest is traded in euros and to a lesser degree in other currencies. It is noteworthy that the value of the dollar declined during the last 12 years by 40 percent for the Swiss franc, and 30% for the Japanese yen, and 25% for the euro, in addition to the large fiscal deficit in the United States did not stop at the borders of the loss of confidence in its currency, the backup, but also led to a surge levels of U.S. public debt.
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