BAGHDAD / JD / .. Confirmed the Arab Monetary Fund said Iraq from among the countries which depend on the system flotation orbit currency exchange, pointing out that the drainage systems prevailing in the global economies and Arab currencies, including 3 types first “floating fully” and that left to market forces by identifying currency exchange rate, as dependent other countries system “peg a single currency or a basket of currencies” including states “cooperation”, Jordan and Lebanon, as well as drainage systems combine the two systems ex.
said head of training in the Fund during the “financial stability”, which concluded yesterday at the Fund Abu Dhabi Ibrahim Alkrasna “are diverse exchange in the Arab countries to 3 types,” noting that both Jordan and Lebanon and the GCC countries peg its currency to fixed exchange rates against the dollar. “
he added, linking Libya and Syria their currencies unit SDRs, while Morocco linking exchange rate DRAM basket undeclared currency, where the euro weight largest in the basket and determined central bank exchange rate Moroccan dirham daily, and selecting the minimum and maximum exchange rate of the dirham.
between the link to a basket of currencies are choosing linkage system to a basket of currencies available, such as special drawing rights and baskets of other currencies, which is based usually on the currencies of major trading partners of the state.
added Alkrasna adopt all of Iraq, Tunisia, Algeria, Mauritania and Sudan system “floating orbit of exchange”, where value is determined currency in the market, according to the forces of supply and demand, and you government to intervene when necessary to re-route the exchange rate, in line with a set of criteria including the status of the current account and foreign currency reserves, while dependent both Egypt and Yemen system floating exchange.
pointed out that “free-floating” leaves the exchange rate freedom change continuously over time, including consistent and market forces, and limited interference by the authorities in this case to influence the pace of change in the exchange rate only, and not to limit that change.
said Alkrasna “refers literature on systems exchange rate that there impact of exchange rates on economic growth and be that impact either directly from During influenced exchange rate or indirect impact of the exchange rate on both investment and trade and financial sector development. “
indicate the economic theory that the effectiveness of countries to deal with the trade shocks depends primarily on the drainage system adopted in these countries, which in turn is reflected in the country’s economic growth .
“In the event prices fall exports State, the impact on economic growth depends on the exchange rate regime, whether fixed or floating, pointing out that the low price of exports will reduce state revenues, which will lead to a decline in economic activity, as well as in employment. “
and “In the case of the adoption of the state system a fixed exchange rate, it requires the state to intervene to keep the exchange rate of the local currency by starting to buy the local currency, will reduce the availability of these currency, to grant facilities and investments, which will negatively impact on economic growth” .
said that if the national adoption of a flexible exchange rate or floating, the state is committed to intervene to raise the exchange rate results in a lack of foreign currency and lead to a further decline in the price of the local currency which will reflect positively on exports and thus an increase in economic growth.
explained that the impact of the exchange rate regime based on the level of sophistication in financial markets, as the flexible exchange rate is usually coupled with fluctuations high and that could have a negative impact on the economy unless the financial system is able to absorb shock and provide dealers with tools hedge occasion, so thought it There must be a sophisticated financial system if I want to take advantage of the flexible exchange rate.