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Successful monetary policy lowers the dollar and defeats smugglers. .!
Haitham Khazali 213 2023-02-07
Haitham Al-Khazali ||
Since the US federal government forced Iraq to submit to the OFAC financial transfer platform, the price of the dollar began to rise.
Although the official price did not exceed 148 dinars per dollar, the value of the dollar began to rise continuously, and with the government taking steps, including increasing sales outlets, granting dollars to travelers, and opening letters of credit to merchants at the official price (148) dinars,
however, the dollar continued to rise until it reached (170) dinars for one dollar in the parallel market.
(The main reason for this is the unwillingness of most merchants to enter the electronic platform to evade tax, or to trade in currency and money laundering).
The black business owners used to collect the dollar from the exchanges or the parallel market, then smuggle it to Kurdistan and pay a $10 commission for each ($10,000) smuggled to Turkish banks.
Then the money is transferred to the final beneficiary from the Turkish banks as soon as the merchant notifies, after the clearing agent completes all import procedures, without the merchant going or registering on the electronic platform or paying taxes and revealing the commercial activity.
This was perhaps the main reason for the rise in demand for the dollar in the parallel market, and
then the rise in the prices of materials and goods, which constituted the beginning of a state of imaginary inflation that exhausted the citizen.
Although the state tried to intervene by instructing the Prime Minister (Muhammad Shiaa al-Sudani) to the Ministry of Commerce to go to the markets and sell goods and merchandise directly to the citizen at subsidized prices, or distribute additional food baskets to eligible families.
However, the dollar continued to rise in the parallel market, and not all merchants joined the electronic platform, for fear of tax accounting.
Until the government took a remarkable step, as it (reduced the official price of the dollar to 130 dinars for every $1).
This has positive economic consequences, which mean that the state is the one who controls monetary policy, and that it will force most, if not all, merchants to engage in the electronic platform, and force the parallel market to reduce the exchange rate of the dollar.
Otherwise, there is no sane trader who evades paying a tax amount, or engaging in a transparent business, and bears a loss ($35) for every $100.
Therefore, this procedure will achieve the following:
1- Accelerate the merchants’ involvement in the electronic platform, and the savings of Iraq’s money from smuggling or tax evasion, with transparency in dealing and opening a documentary credit, which guarantees a certificate of origin of the commodity and ensuring its quality, in addition to insuring it, which is in the interest of the merchant and the citizen.
2- Reducing the price of the dollar in the parallel market, which works to reduce the prices of materials and goods and raises the pressure of inflation on the shoulders of the citizen, in addition to limiting currency smuggling, which will become economically useless.
3- An increase in the supply of the dollar and the tendency towards adopting the dinar as a store for currency and savings, which will enhance the value of the dollar.
And if I were to describe this procedure in economic terms, I would say the courage of a trader, the creativity of a planner, and the stroke of a teacher.
Yes, the teacher said:
Do not acquire the dollar.... The dinar is stronger, the dinar is stronger.
7-2-2023
https://burathanews.com/arabic/economic/426015
