Central Bank of Iraq announced, Wednesday, November 11, 2015, for issuing a new banknote fifty thousand Dinars category, attributing this to the completion of the Iraqi Securities monetary structure and the development of high-class value in the [...]
Central Bank of Iraq announced, Wednesday, November 11, 2015, for issuing a new banknote fifty thousand Dinars category, attributing this to the completion of the Iraqi Securities monetary structure and the development of high-value category in circulation,
Some think of analysts and economists "to sell the dollar at the central bank auction of the same amount and the introduction of the category of the 50 000 new dinars to the market without the withdrawal of the equivalent of the dinar would lead to the collapse of the last"
It is my view that there is a relationship between the central bank auction, which is a fixed nominal rate of the dinar exchange rate against the dollar and the introduction of the fifty-class thousand dinars to be traded in the local market the collapse of the dinar, but the effect will be to increase the number of times the monetary union trading (dinar) within the economy any increase speed money circulation in the Iraqi economy. According to economic theory, the process of printing a large new categories mean an increase in the money supply ratios (liquidity) which fits be directly proportional to the increase of money rotational speed (the speed of trading) that speed of trading, which is directly proportional to the speed of inflation Output higher prices resulting from the increase in new demand on the supply of goods and services due to the increase of that cash, as if the demand for domestic goods increased, the displayed quasi-static at the moment of the lack of production of a multitude or, comparable to a foreigner so that the local product and in particular the industrial fill the increasing gap demand desirable purchased, as well as there are no modern techniques of agricultural production even provides a new view of the agricultural product fills what it needs the consumer thereby increasing trend consumer demand to foreign product, which means that the merchant to increase the import of products foreign to fill the shortage of what supply goods imported from in front of the new demand resulting from the increased liquidity, which means an increase of Iraqi imports from abroad it means that increases of imports increased dollar absorption from inside Iraq to the outside, which means to increase the desire of traders and speculators on their access to the dollar from auctions of the Central Bank and the increase that desire means raising the price Dollar within those auctions Batalli to increase the proportion of declining value of the Iraqi dinar against other currencies, including the dollar, which increases the desire of speculators at this time to get a dollar, even at a price higher than the previous price within Iraq to the expectation of the depreciation of the dinar at a higher rate from the current time and the high value of the dollar.
This economic analysis may apply to any growing economy, but Iraq Velho privacy There is no economic theory that could explain the work of the Iraqi economy, Our economy is going ability of the Almighty, only the good Lord knows how to walk the Iraqi economy because it is led by ignorant all that means this sense of the word, On the one hand, on the other hand that the money supply in the economy in excess of 40 trillion dinars her cover of foreign reserves at the Central Bank and a half times curb this moment any no fear of occurrence of exposure to cover the currency as well as despite the large size of the money supply, but the rolling of which does not exceed by an estimated 25 trillion dinars, the Anchar phenomenon compactness within the economy, and signs the recession experienced by the Iraqi economy during the other two years, reflecting the scarcity of liquidity in the local market with Mnkhvs inflation rate does not exceed more than 1%. And I believe that the issuance of the fifty thousand dinars category will increase the velocity of money circulation, which have a positive impact on moving the stagnant water (hoarder cash) in the case of the Central Bank of Iraq and set the filtering auction currency.
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Last edited by Rocky on Sun Nov 15, 2015 9:33 am; edited 2 times in total