EconomyDollar PricesBreakingCentral Bank Of IraqThe Iraqi Dinar
2024-03-25 15:46Font
Shafaq News / At a time when the price of the dollar is still fluctuating between rise and fall, and the market is forced to live in a situation in a kind of confusion, because the hard currency is an important tool in Iraqi trade, as it is a trade that depends on import in most of the products in the local market, a researcher whose master’s thesis, at the Faculty of Management and Economics at the University of Tikrit, on Monday, put some possible solutions to hold and control the dollar price, because his message came about the role of the Central Bank and the currency sale window and their role in stabilizing the dinar against the dollar and the importance of maintaining the reserve for foreign currency.
Researcher Ahmed Abdullah Akil, Shafaq News Agency, said that “the study aims to know and measure the impact of some central bank tools in achieving the stability of the Iraqi dinar exchange rate against the US dollar during the period (2004-2022) in order to know the places of imbalances and negatives that hinder the stability of the value of the local currency according to the nature of Iraq’s economy, as the goal of maintaining the value of the local currency was the main goal of maintaining the price level related mainly related to the level of the local dinar exchange against the US dollar.”
He added that “the study variables were analyzed and measured according to the (Eviews 13) program, and it was found that there is a moral positive relationship between some central bank instruments as independent variables and the official and parallel exchange rate as subordinate variables in the short term with some negative and positive correlations of some variables in the long term, as it was noted that some instruments were ineffective in affecting the currency exchange rate such as the legal reserve, the re-discount price and open market operations, but the impact of some of them were limited to inflation.”
He pointed out that “while the impact of the interest rate and the window was positive on the value of the local currency as a result of its reduction in the nominal exchange rate, and this indicates the ability of the Central Bank to affect the stability of the exchange rate of the local currency in front of the foreign currency, especially through the window of selling the currency throughout the study period, except for some last years of the study period, as the nominal exchange rate re-rise, as well as the situation in the parallel market by a decision of the monetary authority represented by the Central Bank, for the purpose of facing public expenditures and facing the repercussions of the global health crisis related to the Corona epidemic and the accompanying decrease in oil prices, which is the main source of the US dollar, due to the rentier nature For the Iraqi economy.”
He continued: “It was also noted that the gap between the official exchange rate and its equivalent in the parallel market was increased due to the increased demand for the foreign currency. The study presented a number of recommendations, the most important of which was continuing to work the window without excessive use of foreign reserves and diversifying the sources of access to foreign currency by advancing development and activating the real sector, industry and agriculture, in order to achieve a reduction in imports, which reduces the depletion of currency, in addition to tightening regulatory measures to prevent the smuggling of foreign currency and the works that affect the supply of it, which contributes to the stability of the exchange rate of the local currency.”
He stressed that “continuing to work with the window of selling the currency without redesting foreign reserves, and diversifying the sources of obtaining foreign currency so that the exchange rate does not remain hostage to oil prices as it is almost the only source of foreign currency access.”
He pointed out that “pushing the wheel of development in Iraq, activating the real sector, activating industry and agriculture to reduce imports to relieve pressure on foreign reserves of the dollar, keep the Central Bank away from political pressures and give it the necessary powers to deal with the fluctuations of the economic situation, including fluctuations in exchange rates, and tighten regulatory measures to prevent the smuggling of foreign currency abroad so as not to affect the supply of foreign currency, and therefore the value of the local currency.”
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