On: Sun 27/05/2012 17:28
Terms of the write-off (80%) of Iraq’s foreign debt cancellation control system for foreign exchange
D. Accustomed Naji al-Hamdani
Since the change of the former regime on the fourth of April 2004, the monetary and fiscal policy in Iraq has become a spin in the orbit of international capital frameworks identified by the International Monetary Fund.
Out of the IMF conditions for write off 80% of Iraq’s foreign debt cancellation control system for foreign exchange system and the application of the open market as one of the requirements of market economy and capitalism that must be on the Central Bank of Iraq abide by them.
This means that virtually compel Iraq to restructure its economy and its monetary policy, financial, and according to the philosophy of the capitalist economy which does not result in at best only to the transfer of pests and diseases of the capitalist system and crises to the Iraqi society and increase the army of the poor and the armies of the unemployed and increase the accumulation of wealth parasites. According to the will of the International Monetary Fund and the implementation of unfair conditions, the central bank became unable to intervene in determining the exchange value of the Iraqi dinar against the dollar and other currencies.
Despite assurances by senior officials of the Iraqi Central Bank on the strength of the Iraqi dinar because of the protection cover of sober is the hard currency that the market indicators refute these allegations and confirm the value of the dollar rises and the value of the dinar continues to deteriorate.
As confirmed by the Central Bank of Iraq, the foreign exchange reserves exceeding 65 billion dollars, and this means that the Iraqi dinar must enjoy the competitive capabilities in the foreign exchange market is supposed to exceed the monetary value of the dollar.
The question here is
Q: Why descends towards degradation of the Iraqi dinar and the rise of the dollar as long as the central bank has these huge reserves of hard currency.?
- The central bank bears a great responsibility about the decline in the value of Iraqi dinar and its implications for the lives of citizens and especially the laboring classes and those with limited income. Central bank implements monetary policy is governed by policies of the International Monetary Fund and the private sector domestic and foreign. Did not take effective measures able to stem the flow of hundreds of millions of dollars abroad that constitute a guarantee for the protection of our national currency of the deterioration and collapse. Demands that the central bank to intervene directly to stop the deterioration in the value of Iraqi dinar and determine its value against foreign currencies exchange, including the U.S. dollar.
Central bank as the State Bank can control the money supply in the national economy and to achieve balance in the foreign exchange market.
With the sharp rise in the current political crisis is expected to witness the Iraqi dinar more volatility in the rate of exchange against the dollar and lead to consequences painful from the sharp rise in the prices of consumer goods and non-consumptive and rising crazy in property prices and rents houses, shops, business service daily and the deterioration of the ability purchasing power to enter the consumer suffers mainly from the pressures of life are many.
It is unreasonable to keep the plight of the Iraqi dinar live the wrong policies in order to conform with the requirements of the International Monetary Fund expressed the interests of countries and monopolistic parasitic bourgeoisie. The ultimate goal of the International Monetary Fund conditions of integration of the Iraqi economy of monopoly capitalism.
We believe that the central bank required to intervene and take quick steps to stop the deterioration in the value of our national currency and save it from collapse and the tougher measures to pump foreign currency and sold in accordance with the legal requirements require a combination of access to foreign currency in return for goods and raw materials contribute to support economic activity as a means of production and raw materials not available in the Iraqi market and working to support the movement of industrial and agricultural production.
It is indeed distressing that hundreds of dollars that flow Mlaeyen formally equivalent to the outside not only the imports of poor and depressed commodity markets in neighboring countries to cover up the smuggling of hard currency for the benefit of groups of parasitic mafia thieves market and strengthened the people. An activity plan to drain hard currency and weaken our national currency and fabricating crises and to sabotage the national economy.
The government is required to pursue a sound financial policy is able to create internal and external balances to support monetary policy. The economy of Iraq is still economical Rieia constitute its oil imports more than 95% of national income, and that the economy strong is not measured by the extent of state ownership of billions of cash from the national currency and foreign mortgaged the quantities produced from oil, but that the strength of the national economy and ensure its stability and the stability of prices, which is determined by the ability of productive sectors in industry and agriculture in particular, to achieve self-sufficiency and address the economic and financial crisis expected.
The rehabilitation of factories and plants of Iraq and the re-operation and the establishment of industrial parks and huge agricultural and providing the investment climate welcome attraction for the local private sector and foreign investment will lead to the creation of economic cycle contribute to the increased demand for the Iraqi currency and the rise of the Iraqi dinar against foreign currencies and of the dollar.