Dr.. The appearance of Muhammad Salih *: monetary adjustment in Iraq: visions and perspectives in monetary policy
In the conditions of the current economic stagnation, which indicates the availability of unemployment at two decimal places and falling prices at the zero level, supported by indicators of dual deficit, one of which is internal in the general budget and the other is external in the current account of the balance of payments, the controversies between the economists tend to adopt something from the fiscal adjustment that works To correct the exchange rate and according to a temporary floating mechanism that helps to target the target and defend stable exchange rates at other levels.
Thus, the exchange rate adjustment comes in disciplined degrees to address the imbalance of two basic budgets in the overall economy: The first is to correct the current account of the balance of payments and reach a point close to the balance between inflows and outflows.
The second is to provide a leverage to finance the budget deficit with the differences in correcting the dinar exchange rate to the dollar in order to fill the deficit in the general budget in whole or in part and another source from the corrected exchange rate rest, and count those differences as a final revenue for the treasury.
Such revenues are, in all cases, an inflation tax, whose money is a pure cash issuance commensurate with a reduction in the exchange rate.
The spending arising from the collection of resources for such an inflationary tax (in the form of rentier cash surpluses generated by the new exchange rate) is not without underlying inflation factors in a market that generates expectations leading to continuous price fluctuations.
But at the same time it may move some aspects of public finance and real macro activity to some extent.
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The appearance of Muhammad Salih - cash conditioning in Iraq – edited