Wednesday, June 6, 2012 19:38
Baghdad says traders and officials said the Iraqi Central Bank, who is struggling to stem the illicit flow of dollars to Iran and Syria, has achieved some success in supporting the stability of its currency the dinar by the flow of dollars to the Iraqis through the state-run banks.
The Bank faces a months ago it difficult to cope with increased demand for the dollar in daily Mzhadath with Iqbal traders to buy the U.S. currency to sell in neighboring Syria and Iran, where galvanized the international sanctions imposed on them the demand for hard currency.
Iraq and is recovering from decades of war and sanctions is still a centrally managed economy to a large extent. Oil represents 95 percent of government revenue.
The central bank allowed in late last month to sell the dollar at a fixed price through the state-run banks, which helped lower the dollar price of 1280 dinars to 1210 dinars and narrow the gap between the official price and the market price.
The denominator is harmful to the deputy governor of the Iraqi Central Bank said the bank began to pump six million dollars a day by the largest banks in the country and government are the Rafidain and Rasheed, for their sold to the Iraqis who plan to travel abroad.
He added that the difference in the value of Iraqi dinar between the central bank rate and the market price was seven percent, but now less than four percent, adding that the bank is expected to fall below two percent in a few weeks.
Being the central bank daily auction selling the dollar, compared to 1166 dinars. The sale price of U.S. currency in the Rafidain Bank and Rasheed Bank 1189 dinars, while the market price of 1210 dinars.
Usually the central bank sells every week about 250 thousand dollars to private banks and 75 thousand dollars for the exchange companies and money transfer.
The central bank data showed that the traders rushing for months to buy the dollar in daily auctions of the Central Bank to sell in Syria and Iran as they buy up to $ 400 million on some days in December, compared with a previous average was $ 150 million.
In an effort to crack down on this practice emphasized the central bank in April, the rules on who can participate in these auctions traders that they are binding on members of the Iraqi Chamber of Commerce and obtain licenses from the Ministry of Commerce.
The central bank raised the rate of the dinar is also a bit at the auctions to 1166 dinars to the dollar of 1170 dinars.
But these steps raised the value of U.S. currency in the Iraqi market, inflicting damage to local businesses that depend on the dollar to buy foreign imports.
Traders said that the measures, which include obtaining a permit within 30 days to send money abroad to pay for imports consume time and forced them to shift to the local market to buy dollars at a higher price than the price of the Central Bank.
Kassem said that the central bank extended after that statement to six months to allow greater flexibility in the import process. As requested by four private banks from the central bank to allow them to sell the dollar at a fixed price.
The central bank says that Iraq’s vast reserves of foreign currency, which rose to a record $ 60 billion thanks to rising oil prices will protect its financial system from damage.
However, some economic analysts say that these measures may not maintain the stability of the dinar in the long run.
The economist said Majid picture, “we still import more than 85 percent of our needs and there is still pressure from Syria and Iran.”