said the Iraqi Central Bank, Wednesday, November 11, 2015, issued 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 circulation,
and some think of analysts and economists, "The sale 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 will lead to the final collapse
"In my view it is not 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 class the fifty 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 money circulation speed in the Iraqi economy. According to economic theory, the process of printing a large new categories means increasing the money supply ratios ( cash flow) which have fits directly proportional to the increase in money circulation speed (trading) that speed velocity of circulation, which is directly proportional to accelerating inflation caused by high output rates of increase in new demand on the supply of goods and services due to the increase of that cash, if the demand for increased domestic goods, the displayed quasi-static at the moment for lack of a multitude production or, comparable to a foreigner so that the local product and in particular the industrial to fill the increasing demand of desirable purchased gap, as well as there are no modern techniques of agricultural production up to provide a new offer of agricultural product fills what it needs the consumer what leads to increased direction of consumer demand to the foreign product, which means that the merchant to increase import of products foreign to fill the shortage of what supply goods imported from the front of the new demand resulting from the increased liquidity that means more Iraqi imports from abroad means that increases of imports increased dollar absorption from within Iraq to the outside 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 to raise the dollar price within these auctions and thus 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 Dollar albeit at a price higher than the previous price within Iraq to the expectation of a decline in value 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 hath privacy as there is no economic theory that could explain the work of the Iraqi economy, Our economy is going the 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 once enough and a half limit this moment any no fear of occurrence of exposure to cover the currency despite the large size of the money supply, but the rolling of which does not exceed by an estimated 25 trillion dinars, the spread of the phenomenon of compactness within the economy, and signs the recession experienced by the Iraqi economy during the other two years, which reflect the scarcity of liquidity in the local market with low inflation rate does not exceed more than 1%. And I believe that the issuance of the fifty-class thousand dinars will increase the speed of money circulation, which have a positive impact on moving the stagnant water (hoarder) cash in the case of the Iraqi Central Bank set the filtering auction currency. *, Professor of economic theory, Faculty of Management and Economics / University of Qadisiyah
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Last edited by Rocky on Sun Nov 22, 2015 9:25 am; edited 5 times in total