An economist talks about what controls the dollar exchange rate in Iraq
Economy 07/20/2020 19:41 634
Baghdad today - Baghdad
Economist, Hammam Al-Shamaa, on Tuesday (28 July 2020), talked about what controls the exchange rate of the dollar in Iraq and the effect of internal factors on it.
Al-Shamaa said, in an interview with (Baghdad Today), that "the exchange rate of the dollar in local markets has nothing to do with the exchange rate of the dollar in global markets towards other currencies."
He added, "What controls the dollar exchange rate in global markets are expectations, oil prices, gold prices and a relationship with the euro.
As for Iraq, the relationship between the dollar and the dinar is controlled by internal factors related to the demand and supply of the dollar."
And Al-Shamaa said, "The decrease leads to higher prices, inflation and more problems for the poor classes, because the devaluation of the dinar means an increase in the value of commodities."
The price of gold reached record levels yesterday, with a new drop in the price of the dollar in the global market at a time when investors rushed to buy it as a safe haven, amid concern about the tension between the United States and China and the rise in the number of cases of Covid-19 again around the world and the lack of progress in Washington on a new package To stimulate the economy.
After months of improvement in stock markets, driven by the trillions of dollars of support from governments and central banks, investors are rethinking the long-term economic implications of the emerging corona virus.
And at a time when the wide easing measures imposed by the Federal Reserve monetary dollar push the dollar against most of the other currencies, gold rises significantly, reaching a record level of $1944.71, which is much higher than the previous record level recorded in 2011 and reached $1921.18.
The focus is on the next meeting of the Federal Reserve to discuss its policies this week, as some expect that more measures will be imposed to boost the economy (probably negative interest rates), which is expected to increase pressure on the dollar and raise the price of the gold ingot to more than two thousand dollars.
There is also concern that recording worse-than-expected results in US gross domestic product for the second quarter of the year will cause major selling to the dollar, and while the weak dollar has been a major driver of the high price of gold, the matter is also driven by the attractiveness of the metal as a haven in times of turmoil, especially in light of the deterioration The relations between the United States and China day after day.
Gavin Wendt, chief resource analyst at MineLife Consulting, said: “Strong gains cannot be avoided at a time when we are entering a stage similar to the atmosphere that prevailed in the aftermath of the global financial crisis as gold prices rose to record levels as a result of large amounts of Federal Reserve funds being pumped into Financial system,” and the dollar fell again against the other currencies, while the euro reached its highest level since September 2018.