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The need to adopt a monetary policy suited to the stage of development
28/04/2012 0:00
Because they regulate the joints of the economy
Baghdad - Al Sabah
to adopt tight monetary policy helps to a great extent in the development of all the joints of the Iraqi economy, also contributes to contain all the financial problems suffered by Iraq for long periods of time, led to the to witness the Iraqi economy, large fluctuations took a negative impact a wide all economic spheres.
economist Riad Obaid stressed that monetary policy in Iraq has moved from direct intervention by the authority of the former regime to full independence under the new system and was the result of interference in the function of the central bank at the time that hit the extreme vulnerability measures the monetary authority and the deviation of the reality of procedures for achieving the objectives of that policy which led to the exposure of the Iraqi economy to the crisis in general and monetary, in particular, pointing out that the impact on the Iraqi dinar exchange rate, which fell drastically, especially in the nineties, reaching to (3000) dinars per dollar, which led to direct the citizen to keep foreign currency instead of the Iraqi dinar and interest to buy durable goods and real estate to maintain the maximum extent possible from the buying power of the Iraqi dinar.
He added that the central bank after 2003 enjoyed full independence of direct and Giralmbacrh, and in this period began to monetary policy succeeded in achieving the objectives economic policy through the relative stability in the economy through Matsmah its tools to control the collection of domestic liquidity, also used the bank 4/10/2003 auction of foreign currency for buying and selling the dollar to stabilize the Iraqi dinar exchange rate in the range of (1500) dinars to the dollar then began to decline gradually to without it and to less than (1200) dinars to the dollar. He pointed out that this was reflected directly on the reduced cost of import of goods and services imported and which occupies the largest percentage of goods and services offered in the Iraqi market and thus has the general level of prices down a clear and remarkable stability in it, but at the level of exports, the effects that were not of value because Iraqi exports limited in size, except that oil prices are determined according to a mechanism far from the Iraqi dinar exchange rate. And it is natural to reflect the effects of the bank's decision to intervene in determining the exchange rate of the Iraqi dinar through public auction on the volume of liquidity in the home, which inevitably fell through the purchase of large amounts of dollar a day. Inevitably reflected on prices through scalable demand for goods and services of all kinds. This is in addition to the provision of central bank foreign exchange to finance imports and the elimination of speculation in which that may be practiced by dealers in this market. What helped in the face of inflation and to stop the aggravation. It is important to point out that these measures and policies taken by the Central Bank is responsible for formulating and implementing monetary policy had an important role in achieving tremendous success on many levels.
competent financial affairs d. Soraya Khazraji shown through the study in this regard: that monetary policy is an important part of macroeconomic policy as the lead monetary policy is an important and active role in the organization of the money supply and control of liquidity and credit.
added through this important role can the monetary authorities and of the Central Bank's highest monetary authority that achieve the objectives of specific critical according to priorities determined by the economic problem facing the economy, and pointed out that he sometimes used the monetary authorities intermediate targets Kaared money and interest rates to reach the ultimate goal aspire Castaqrar prices and reduce inflation, which is one of the most prominent and most important goals pursued by all the economies of the world because of inflation of negative side effects on the economy and economic growth, and showed that the challenge faced by monetary authorities in Iraq after 2003 is the problem of inflation but incontinent permission must be subjected to control through drawing monetary policies independent of any political decision, and the need to have the monetary authorities flexibility and freedom to use different tools to fight inflation. In time find that the Iraqi economy unilaterally dependent on oil exports, which covers revenues of more than 90 percent of the expenses of the Treasury and in case the oil markets to supply shocks due to changes in oil prices transmitted shock directly to the Iraqi economy, the outcome of this trauma and its impact on the state budget show effects of by increasing inflation and affected the local currency (the dinar) and negatively transformed individuals to use other assets as a store of value instead of the dinar and the trend in Iraq is to use the U.S. dollar Kkhozan of value or use it sometimes as an intermediary for the exchange of so-called phenomenon (dollarization), or bring foreign exchange instead of cash local and characterized the Iraqi economy that (economy dollarized). and confirm these facts find that the volatility in exchange rates of the dollar and its impact on inflation, including pushing up prices that lead the citizen at the time of administration is seeking central to curb inflation, monetary policy desired reflection from behind to control the exchange rate.
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