D. Sinan Shabibi Mohammad Reza *: determine the exchange rate .. Initiatives banks is good, but monetary policy is the foundation

[yota691]

D. Sinan Shabibi Mohammad Reza *: determine the exchange rate .. Initiatives banks is good, but monetary policy is the foundation

- POSTED ON 07/21/2013

The central bank faced some problems at the beginning of 2012 represented an increase demand for the dollar as a result of the withdrawal of U.S. forces and increasing regional demand, especially by Syria and Iran. Has such a sense of economic shock led to a large increase in demand for the dollar and thus rising amount of foreign currency auction. The phenomenon of external shocks is not strange in developing countries, it is a fundamental property of their properties because of the openness of their economies to the outside. The face of these shocks take a long time which fluctuates affected by the exchange rate and other economic variables. That these shocks are focused on the demand for the dollar, and is no stranger to the resort witnessed by the countries to some restrictions aimed at demand management. And successes vary as a result of these measures. This means that the fluctuation in the exchange rate in 2012 was mainly due to external shocks and not because of internal policy. Restrictive methods were not effective, but effective treatment which resulted in great success was through the lifting of all restrictions and exchange rate liberalization and meet the demand for foreign currency as is fully described in the statement No. 19 in 1/10/2012 where the "Bank has committed to maintain the value of Iraqi dinar and stability as part of its policy for the protection and growth of the Iraqi economy, and in this context ensures that the Iraqi Central Bank to meet the demand for foreign currency in full, including not intersect with the law of money laundering and money crime and terrorism No. 93 for the year 2004, instructions and regulations issued in this regard. " If the crisis the central bank in the previous period is a result of an external shock violent the oscillation, which happened in the time of the current administration was the result of its policies, and treatment that we have seen recently was not the result of the policy of this administration cash, but as a result of initiatives banks represented by the reduction in the exchange rate offered by the dealers end by reducing profits. I've been to restrict the supply of foreign currency starting (in the tenth month of 2012).This continued restraint so as not to desire the new administration to meet demand fully believing that thus avoiding wastage of public money, and was not this administration is aware that the main objective of the central bank, according to its law is to stabilize the exchange rate, so it is very essential that you are interviewed every demand except So which involves banking and administrative irregularities or so large that involves money laundering operations and the financing of terrorism. So price has continued to rise and became up to 1280 dinars to the dollar at the end of the fifth month of 2013. We do not know how to be in front of a waste of public money and we we meet a demand for the dollar and take currency Iraqi suit and the resulting stability of the exchange rate. the current administration is now selling amounts beyond what was sold by the previous administration in duration recent why there was waste in the past - as has been said - and not There are wasting now!? The new administration has adopted a cure is not consistent with the principles of monetary policy. This treatment represents that the banks cut the price of the dollar, which means that the procedure was the same on the exchange rate and not on the exchange rate fundamentals (of supply and demand of foreign currency). The target price directly price may ignore the basics and therefore it is merely a holding administratively by. But relying on the basics of price means the use of reserves to meet the demand, which will lead to a reduction in the price of the dollar, and this is a market issue and not an administrative issue, and if the reserve falls as a key parameter for the basics of price, baptize to increase the price of the dollar. So it was on the monetary authority to lower the exchange rate of the dollar by pumping the money supply through the reserve and not by the banking sector downwardly directly. In other words, that the treatment must be within the monetary policy mainly. The treatment through the reserve will be more stable and enduring. Change the price or reduced in this case must be due to the effect of monetary policy, especially the money supply and exchange rate policy. It should not be this reduction due to reduced profits of the banks it is not characterized by stability and permanence of the hand, as it is not within the means of monetary policy on the other. This has resulted in style (by banks) low exchange rate of 1280 dinars to 1225 dinars, the price is still high. On the other hand, the monetary treatment by banks will impose some restrictions on the central bank, will increase the bargaining power when private banks when asked the central bank to apply some developmental measures, such as increasing the capital of banks or ask them to activate brokerage to regulate the banking reality. Finally, the exchange rate policy is the policy of total while the area in which they operate is a partial area banks. Determine the exchange rate and the basic function of the functions of the central bank, which is certainly not the of missions banks, especially since the central bank has large reserves which can meet all the demand levels. It is possible to get to the same result, any reduction of the dollar, through the reserve and thus be in front of a monetary policy to maintain the stability of the exchange rate, led by the central bank. That trading with the banks on the issue of the exchange rate is needed, but that this trade must go out to the governmental and parliamentary bodies and the private sector as well, and can be trading covers other elements of monetary policy. * Central Bank Governor article

Edited July 23, 2013 by yota691

[Psych]

So in the street value of the dinar declined this past year as Iraq and Syria were shopping in Iraq for US dollars due to sanctions against them.  This lowered the demand for the dinar and heightened the demand for the dollar.  In order to counterbalance this, the CBI is now selling more US dollars which is considered to be a waste as it's poor monetary policy.  The CBI can maintain the exchange rate by maintaining and increasing the reserves.  Do I have this right?

[Bunk]

 No,I mean Yes,Ah I mean  ..... Alan Greenspan MIGHT be able to tell You.. Maybe.....

[sanders2340]

Lost me

[uncirculd]

So Turki's monetary policy is to launder money and supply the two neighboring countries with the money they need to either support bashards war or auk ma nuts nuke program.  This is his policy.  Then pretends to talk about laundering.  Give me a break.   The bank loses money and the dinar plummets.

[Nelg]

Revaluation and creating a valid exchange rate will eliminate their problem with a low value of the dinar.  The dinar exchange is low because the banks were responding to supply and demand.  The demand for the dollar was high and countries under sanctions (aka Iran) were coming to Iraqi to purchase dollars.  So it was not the bank that controlled the price but the demand.  

 

Ok, so set the price at $4.00 per dinar!  Then the CBI will be in control.      

[Shelley]

How can it possible we here at DV know the right thing they should do , and the CBI and whatever government they have don't have a clue..... I find that impossible to believe !!!

[sandfly]

THATS WHAT I SAY

[Shelley]

THATS WHAT I SAY

Good morning Sandfly.... Hope you get to come home really really soon

[Alex38]

horse dung.

[Carrello]

What are these countries buying dollars with?  Chinese yuan?  No, they are purchasing with IQD, and thereby removing IQD off the street and out of terrorists regimes that would love to see the IQD revalue, especially while they are holding it.  There may be a plan in place to suck the remaining IQD out of these countries....this is not just a one-way street.

How can it possible we here at DV know the right thing they should do , and the CBI and whatever government they have don't have a clue..... I find that impossible to believe !!!

 

You got it! 

[Shelley]

What are these countries buying dollars with?  Chinese yuan?  No, they are purchasing with IQD, and thereby removing IQD off the street and out of terrorists regimes that would love to see the IQD revalue, especially while they are holding it.  There may be a plan in place to suck the remaining IQD out of these countries....this is not just a one-way street.

 

You got it!

Good morning C, I truly wish I did !!!

[Diddle]

So is Shabibi back or not?  That's what I want to know...did I miss something? That photo looks like a pic taken at the press conference in Wash DC 2years ago. That, plus the article, have thrown me into state of total confusion!!!  Wow - they're masters at throwing us a curveball...

[zigmeister]

What are these countries buying dollars with?  Chinese yuan?  No, they are purchasing with IQD, and thereby removing IQD off the street and out of terrorists regimes that would love to see the IQD revalue, especially while they are holding it.  There may be a plan in place to suck the remaining IQD out of these countries....this is not just a one-way street.

 

You got it! 

Badda Bing Babeeee, 1,2,3, easie peasie!

[Nelg]

How can it possible we here at DV know the right thing they should do , and the CBI and whatever government they have don't have a clue..... I find that impossible to believe !!!

What I posted was a joke.  NO ONE KNOWS what or why Iraq is doing.  No one!  It is rather laughable that we think we know what they should do and why they should do it.  We "ain't them!"  Reading someone who things they know what is about to happen is like reading "tea leaves" and has the same validity; your guess is as good as mine.  Until Iraq acts, we are all just gazing at tea leaves in a cup.

[supergirl]

What I posted was a joke.  NO ONE KNOWS what or why Iraq is doing.  No one!  It is rather laughable that we think we know what they should do and why they should do it.  We "ain't them!"  Reading someone who things they know what is about to happen is like reading "tea leaves" and has the same validity; your guess is as good as mine.  Until Iraq acts, we are all just gazing at tea leaves in a cup.

Love your posts.  You are a very intelligent person.

[billjr]

What I posted was a joke.  NO ONE KNOWS what or why Iraq is doing.  No one!  It is rather laughable that we think we know what they should do and why they should do it.  We "ain't them!"  Reading someone who things they know what is about to happen is like reading "tea leaves" and has the same validity; your guess is as good as mine.  Until Iraq acts, we are all just gazing at tea leaves in a cup.

The most sensible post I have seen in years! Thank you.

[vomer]

What's sensible to us is cluelessness to them.  I am of the opine that they are under demonic oppression over there keeping them from thinking sensibly.   Like we're heading in the US.