12/17/2020 14:20 Readings 167 Section: File and Analysis
Analysts: The currency auction is a drain on the dollar and an opportunity for the influential-backed banks to make profits
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Baghdad / Obelisk: Analysts of the Union Group for political locals considered that the price of the Iraqi dinar collapsed against the US dollar, until one dollar exceeded 1,300 Iraqi dinars,
surprisingly after its prices since the Corona pandemic were 1223 and 1200 before it, while the selling price of the dollar in the central station is fixed at 1190 One Iraqi dinar to one dollar.
The Central Bank did not make any effort in that crisis to restore the exchange to its normal price, besiege speculators' mafias and manipulate the currency auction, which seeks to destroy the Iraqi dinar and bring the country into a crisis whose tax is paid by the simple citizen with the rise in commodity prices and the decrease in its purchasing power.
Despite the expectations of economic observers that the gap of the economic crisis will shrink in the first quarter of next year thanks to the rise in global oil prices, which will affect the country's economic situation,
but this did not prevent speculators from manipulating the prices of the dollar, taking advantage of the "fabricated" crisis it is going through. Iraq now.
On this issue, political analyst Muhammad Sadiq al-Hashemi believes that "a number of reasons contributed to raising the price of the dollar, including the control of a stream over banks, starting from the movement of government money to the central bank until the last (private) buyer, which is the new lobby that is unique in selling, exchanging and disposing of the currency to be the first seller.
"The only one and the rest are secondary buyers, which led to him selling the first at a price and the second at a higher price until it reached the citizen at a price as it is now."
He explained that "the solution to this corruption lies in returning to justice by the government’s control of the banks’ policy to draw up a government policy that will be supervised by Parliament, or at the minimum, which is the worst solution, to conclude a political agreement on the matter."
And that "the second problem is that the central bank is no longer independent, but is owned by a party, and the rest of the banks come in second place and their financial entitlement is within their electoral entitlement.
The size of the block draws the ability to control the dollar exchange rate and limit it to it and its agents."
He pointed out that "there is a near clinical death for the active regulatory and governmental institutions in this aspect."
For his part, political analyst Qassem al-Gharawi affirms that “when planning is absent, the government's monetary and banking policy fails, speculators and monopolists rise above it, corruption ramps up in it and the parties lead the money laundering process,
the country will not be safe from slipping towards internal and external borrowing that threatens the country's sovereignty and subject it to harsh conditions by the bank.
This is what happened in many countries due to loans and foreign debts."
Al-Gharawi indicated that "in the absence of deterrent measures and fines for violating banks, as it was previously, will there be an excess of the central reserves under the pretext of covering the market's need for dollars in the coming days, and what are the measures taken by the bank in this regard?"
He stressed the need to "change the selling mechanisms in the window, apply compliance standards and money laundering, and that the Central Bank continue its supervisory measures, and lift all other restrictions in transfer operations so that we secure a dollar (for the beneficiary companies) instead of the dollar being at exchange companies, speculators and monopolists."
He pointed out that "it is possible to transfer the window of sale of currency to banks that have a history, experience and balance in international financial transfer, such as the Iraqi Trade Bank, to be the central bank away from speculation and to devote itself to its original tasks in investment and contribute to the economic development process that Iraq needs."
He continued by saying that "it is possible for the government to issue strict instructions and laws through which it tries to control the events and influences of the decline and rise of the value of the dollar against the Iraqi dinar, through a deliberate approach through monitoring and a study provided by economists and financial experts."
On the same level, political analyst Yunus Al-Kaabi believes that "the currency auction and its suspicions have become suspicious of everyone, as the name suggests suspicions of corruption that have become known to everyone else."
He explained, "These suspicions come because this auction is exclusive to certain private banks affiliated with political parties, which control the hard currency market in the country."
He pointed out that "the increasing demand for hard currency is not commensurate with the country's economic situation under the shadow of the Corona pandemic, and many economic activities have stopped,
but we have noticed the same rate of daily sales of dollars in the currency auction, but rather it increases more."
And that "the rush of large blocks to obtain the post of central bank governor is almost another raises fears, that this position has become a source of funding for some parties, or what is the motive behind this competition for it."
He stressed, "The need to remove this position from the partisan quota system and to know the fate of the money that is pumped into this auction.
If the purpose of the auction is to obtain the local currency, the state can pay part of the employees' salaries in dollars and the employee will spend this currency in the local markets, and thus savings of local cash will be realized."
If the matter remains in this way, this is a drain on the country's funds and may lead to financial collapse."
As political analyst Aqeel Al-Taie confirms, "The currency auction is a bad year enacted by Paul Primer, who is working on pumping hard currency to private banks that were established on the basis of speculation only, which are shops to monopolize currency."
He added that "the rise in the exchange rate of the dollar against a decrease in the Iraqi dinar was deliberate due to the radiation released from politicians and owners of private banks, which numbered 78 banks, through the media that the exchange rate would reach 1500, and this is to create a ground and a climate for monopoly and the acquisition of hard currency that is smuggled abroad."
He explained that "the new central bank governor is inexperienced, as he canceled the bulletin detailing the names."