Thursday, July 5, 2018


“There are three types of exchange rate:
Fixed (Iraq) .
Fully floating or moving (determined by market factors entirely)
And partially or creeping (Lebanon)

In order to determine the most appropriate system, the main economic indicators of the Iraqi economy should be: 44 billion dollars in the balance of trade, and surplus in the balance of payments about 30 billion dollars at the end of 2012 .. b) total foreign exchange reserves $ 71 billion at the end of 2013 .. c) the value of the monetary mass MO (paper and metal) ) M2 (M2 + demand deposits + mobile savings accounts) is about 73 billion. Based on the assumption that 30% of the M2 will be available to citizens for daily expenses. 

This figure, according to the figures above, will be $ 22 billion. It is not used to buy the dollar and therefore does not constitute a demand for it. Some measures can be proposed to absorb liquidity: The disclosure of bank accounts and freezing them for reasons not related to the specific cases specified will contribute to the flight of capital from banks, And keep them in cash, constitute x (C) Issuance of treasury bonds to the public, which are subscribed by banks with a nominal nominal value of one bond, with periods ranging from one to two years, with attractive interest, to absorb up to $ 20 billion of the size of the monetary mass. The Central Bank shall determine the price of the dollar, for example, 1170 for buying, and 1200 dinars for sale. B) The Central Bank shall release the market of the pieces and leave the banks and customers free to sell and buy. C) The Central Bank shall intervene or sell when the price is touched. The Central Bank reserves control of the market, especially in light of the presence of a cash mass of more than 23 billion dollars. 

In addition to other measures such as controlling the movement of money through border crossings, and encouraging citizens to deposit their savings in banks, And easing of strict measures, in the neighborhood Money Traceability can be tracked and moved. ” Tebow the banking cycle, or frozen in banks, which instead of encouraging them to enter the banking cycle and turned them into investments and instruments for the stability of the monetary markets, exaggerated by the repressive measures, keen on the philosophy and loss of dinars.

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