The role of the exchange rate in determining the general level of prices and the problem of monetary policy in Iraq

[yota691]

Hatim George Hatim *: the role of the exchange rate in determining the general level of prices and the problem of monetary policy in Iraq **

- PUBLISHED ON 03.13.2015

1. 1.    Summary [1]

This paper discusses the role of the Iraqi Central Bank's policy toward the Iraqi dinar exchange rate [2] In particular, cash and area in general, contain inflation and calm the rates of increase in the general level of prices, including believes the ultimate price stability.The paper explains that the heavy reliance of the Iraqi economy on imports makes the Iraqi dinar exchange one influential variables in the path of the general level of prices in Iraq as a laboratory, which turns whereby prices of imported goods to the local currency prices price. But success in calming the rates of increase in the general level of prices in recent years is not due only to decrease the rate of exchange (ie, improved value of the dinar measured in foreign currencies); but thanks in also to the large expansion in imports and thus in the commodity supply, which became possible by mutations in the large oil revenues and the demise of the blockade restrictions on Iraq. The paper shows that the control of the exchange rate is not sufficient in itself to contain inflation and to ensure price stability, also warns that the exchange rate is close to exhausting its potential in the course of the general level of prices of control, and that the large rise in aggregate demand resulting from the broad jumps government spending puts the economy on just around the corner or lower than the point at which you start the limited available capacities for the production of goods or semi-tradable, and in particular the infrastructure capacities, to impose severe restrictions on the expansion of commodity supply, which converts it to broadcast spots inflation in all aspects of the economy. Paper and go to the heavy reliance on oil revenues to finance government spending, take away a lot of monetary policy effectiveness in influencing aggregate demand and give fiscal policy a very important role in determining the path of macroeconomic variables, including the general level of prices.As the Iraqi Central Bank to focus on controlling the path of the exchange rate, and less on foreign exchange reserves, transforms the basic instruments of monetary policy, and the offer of cash and interest rates, to a subsidiary variables.

To continue reading please download the full text of the research as a PDF ... Click here To download the statistical supplement as a PDF, click here

(*) Iraqi economic researcher and an international consultant

(**) Research published in the "Arab Economic Research Journal Nos. 59-60, Summer - Fall 2012 Please note that this version includes some minor adjustments to the published version in the" Arab Economic Research Journal. " Lead author of this paper would like to thank Dr. Mahdi and the entire House of Representatives, Dr. Nabil value their feedback on the first draft, and would like to emphasize at the same time full responsibility for all content of the paper from the shortcomings and loopholes.

 

Margins

[1] adopted in this paper on the conceptual frameworks and analytical tools for the theory of Keynesian in determining income / operating level and the interest rate and the money, and as expressed in accordance with the formula model Hicks Hansen ((Hicks-Hansen Model, which is referred to most often model IS-LM . a good explanation of the theory of Keynes in determining income and model Hicks Hansen wrote in a lot of macroeconomic, for example, are not limited to available:

Dornbusch, Rudiger, Stanley Fischer and Richard Startz, Macroeconomics , 9 ^thEdition, McGraw Hill, Singapore in 2004.

[2] known as the Iraqi dinar exchange rate in this study as the purchase of foreign currency price of the Iraqi dinar, any value of the Iraqi dinar and one unit of foreign currency. Accordingly, the value / price of the dinar foreign currency exchange rate improved landing and deteriorate Ptsaadh. It follows from the statistical tables published by the Central Bank on the exchange rate that adopts implicitly this definition of the exchange rate, see, for example, the table number (38) in the "Annual Statistical Bulletin 2012" issued by the General Directorate of Statistics and Research of the Central Bank of Iraq and the Table (1) in the Statistical Appendix . This definition Msatmd in numerous scientific studies, see, for example, but not limited to

Catoa, Luis AV "Return to Basics: Why Exchange Rates," Finance and Development, September 2007, p. 48

 But the most dependent known internationally at the present time is the inverse of the previous definition stipulates that the exchange rate is a foreign local currency or the price of one unit of local currency calculated or expressed in foreign currency, or words, explained that the currency amount Alahnbeh needed to buy one unit of currency See local

 Dornbusch, Roger, Stanley Fischer and Richard Startz. Macroeconomics , op. cit., p. 576.

The following shows the reference motives behind the widespread use of the second definition in recent years

Dunn, Robert M. Jr., and John H. Muttin. International Economics , London and New York: Routledge, 2000, p.3

[aliciadogz]

Thanks Yoga good information.

[sandfly]

THANKS

[SgtFuryUSCZ]

***///

 

[Laid Back]

The paper shows that the control of the exchange rate is not sufficient in itself to contain inflation and to ensure price stability, also warns that the exchange rate is close to exhausting its potential in the course of the general level of prices of control, and that the large rise in aggregate demand resulting from the broad jumps government spending.

Time to increase the exchange rate to solve the problem.!

Go iraq

Go dinar

Go strong $1.13:1

[deniscanada]

Here is the whole article A long read but a damn good read.

OCR BING TRANSLATION

 

The charts are missing but it does not affect the context of the article/research paper

 

It explains what is involved in exchange rate policies, exchange rates and foreign exchange rates

Enjoy I liked it.

 

Hatim George Hatim *: the role of the exchange rate in determining the general level of prices and the problem of monetary policy in Iraq **

1
The role of the exchange rate in determining the General level of prices and monetary policy dilemma in Iraq 1
Hatim George Hatim Iraqi economic
The publication urged < magazine "Arab economic research No. 59 — 60, r; p — autumn 2012" 2
1. Summary 3
This paper discusses the role of the Central Bank of Iraq policy toward the price of a ^ RV rug is ^ ^ Iraqi assets, the cash area generally, ahatraa alndakhm and calming the rates of increase in the general price almszook, and secured at the end of the
1 submit this paper is intended to thank Dr. Kamil Mahdi and Dr. Nabil deputies on their value on the first draft, and wished to stress at the same time, full responsibility for all its shortcomings and gaps of the paper.
2 Please note that this version contains minor altadilaka bahad althskhh published in the "Journal of Arab economic research".
3 adopted in this paper about me althalilabe almvahimabe frameworks and tools for determining the level of alkinzib theory aldkhlralcha ^ for interest rate and money, as expressed in the formula form Hicks Hansen (; © Hicks-Hansen Mod) referred to most often IS ~ LM model. Sarah is a good Keynesian in determining income wekmozeg Hicks hasn in many books alassad total including but not limited to:
Dornbusch, Rudiger, Stanley Fischer and Richard Sta^z, Macroeconomics, 9th Edition, McGraw Hill, Singapore 2004.
4 know the Iraqi dinar exchange rate in this study that the purchase price of the foreign currency of Iraqi dinar, Iraqi dinar value for one unit of foreign currency. Accordingly, the value/price of the foreign currency dinar improved exchange rate declines and deteriorating escalation. And derived from statistical tables published by the alpisac central exchange rate that implicitly adopts this definition of exchange rate, see for instance table (38) of the "annual statistical alaethrh e 01 h ' issued by the Directorate-General for statistics and research your lion's central table (1) in the statistical annex. And this definition msatmd innumerous scientific studies, see for example
Limited
opment, September؛Catoa, Luis A.V. "Return to Basics: Why Exchange Rates," Finance and Deve
48 .2007, p
However, the most widely known internationally nowadays is the inverse of the above definition and States that price! to distract is the price alagaebi to local currency or price of one unit of local currency calculated and expressed in foreign currency, or by the amount of foreign currency
To purchase one unit of local currency see Dornbusch, Roger, Stan; ey F; R; chard and scher Sta ^ z. Macroeconomics, op. cit., p. 576.
George weld weld research [kosadih Arab 1 of Eden 59 — L0O scary — autumn 2012 "
2
Eventually stabilization force. The paper explains that the heavy reliance of the Iraqi economy collapse alasneradat makes one Iraqi dinar exchange rate variables affecting general price-level path in Iraq as the factor that turns the prices almsnzerdh prices in the local currency. But success in easing the rates of increase in the general price level in the latter refers only to the declining exchange rate (i.e. improved dinar value measured in foreign currencies); but thanks also to the significant expansion in imports and in the supply of the commodity, and made possible by breakthroughs in revenue alaeftih and restrictions on Iraq. Show
To control the exchange rate is not sufficient in itself to containing inflation to ensure stability, Arri, and cautions
The exchange rate is close to exhausting its possibilities to control the path of the General level of prices, and that the large rise in aggregate demand caused by vast government spending jumps put almzotsad on the corner of alaekth you start the limited capacity available for the production of goods or for trafficking, in particular the energies of master Brown, of restricting choke on the expansion of commodity supply, turning it into hot spots for alnthkhm in all parts of the economy. The paper argues that reliance althdid alkoftih revenue to finance government spending take away alaekdih alczeibr of policy effectiveness in altao'r on aggregate demand and give fiscal policy a role very important in determining the course of macroeconomic variables including the general price level. The central focus of albaek control track price a ^ rack, and ash on ahaniati alaekd alagaebi, alaekdih policy prevents core walmtmzh balardd alaekdi interest rates, to a variable.
2. harm the overall level of consumer prices in Iraq llkotrh 1995-2010
Despite the radical change in economic policy and institutional frameworks, but the average annual rate of rise of the General index of consumer prices for the years 2003-2011 (0/23.47) was higher than for the years 1996-2002 (10.71/). Even assuming that the institutional frameworks and economic mechanisms that controlled path almzotsad 2003 continued in the conduct of the economy until the end of 2003, the average annual rate of increase in the General level of secrets for the years 2004-2011 (22.2%) Remains higher than it was for the years 1996-2003 (up 13.57 e/°). In both cases it was possible to jump the average annual rate of increase of the uncovering of a 2002 or 2003 to msttriat the top Lola
The following reference shows the motivations behind proliferation using the second definition in the years when Dunn, Robert M. Jr., and John H. Muttin. International Economics, London and New York: Rout؛edge, 2000, p.3

1 tadmha George tathmha. "Economic Research [Arabic 1 Eden 99 ~ ~ 60, wool p — autumn 2012 "
3
Getting off llstwat 2008-2011 to (7.41%) .5 (see fee chart number 1 and 2 and tables 1, 2, 3 and 4 in annex).
Raises the comparison above of general price level the following questions: are the rates of increase in the overall level of ^ r downward in the last 60) after 2007 (being ' "d exclusively Central Bank policy achievement in the appreciation of the exchange rate in particular? or is that the collection holds a package of policies, procedures, interdependent and overlapping changes do not constitute policies World Bank report said only one of the central components? and what is the actual extent of the impact of policy altkodih and limits their effectiveness on the variables almzondadetMacro-economic mode and we will gynandromorph?
Chart (1)
Price index almmthlk in Iraq for the period 1995-2011 (100 = 2007)

General index
It also will explain later thought is search index for rent published by culprits were statistics does not reflect accurately on the large rise in rental housing.
Soldering George Collier. "Research/athmadet aladdin Arabian 95 — am j p — autumn 2012"
4

3. Iraqi dinar exchange rate and the General level of prices
Provides most of the exports of Iraqi alaeftih ^ what the diameter of the foreign currency financing needs alasiradih and animosities still keenly felt by other types of demand for money alagaei; unlike the resource alaefti, occupying an important position in the alasiradat before the commodity in the domestic market. It is also known that Iraq was generating most of the oil production to frivolous and not used locally only simple 100. This is why many professionals tend to adopt the GDP is alaefti (i.e., excluding crude oil sector output (as a rough indicator of the national productive structure can of saturation of demand for final goods not domestically produced oil 6. For the same reason, being the ratio of imports to GDP as a measure of non-altafti ئقريبي the role of imports to satisfy demand for final goods excluding alaeft raw and also the degree of adoption of non-productive structure alaefti on imports in its productivity. I have alasneradat to output ratio ranged from the statistics exclude mining and quarrying 7 adoption of current between (span%) And (50.74 e/°) during the period 2007-2010.?
Any excluded from crude oil
7 use the GDP excluding mining and quarries instead of gross total ornaments by excluding crude oil due to the lack of data on output of alienating the crude oil sector for the years 2009 and 2010. And considering the scant remainder of mining output, the ratio will not be affected by the degree of worth when using variable first rather than second in charge.
8 this is believed to have been a reserve will be considered and each age period in question if it was calculated on the basis of constant prices for the elderly. On the one hand, warns review rates of change annual sectoral output in constant prices of God mghalat in
Tadmha George tathmha. "Research [kosadih Arabic 1 to 1 n 59 — 60 row p — Reeve 2012"

5
This important role of imports in the production and provision of goods in alakondad Iraqi dinar exchange rate gives a mo'wa in prices before alaslei not altafti in the airplane market. As is well known, the rabies almsnzerdat hyphen Iraqi ports is determined as the product of his prices! its alasalilau hand and exchange rate as the factor by which the turn prices almsnzerdh prices in the local currency, on the other. On this basis, the exchange rate of the dinar affects rabies alardd local commodity whether you are financing the State budget with or without disabilities, and inevitably have the statistics for market price inflationary pressures at a price araekaa ^ rack (no depreciation of the dinar in the currency alagtbet) prepared by the Latvian ئقوق rates applicable to imports decline in indigenous markets, whether a balanced State budget or deficit or hardcore kotkhr bevathd comfortable. The exchange rate is one of the factors determining the path of the ASSH ^ RSS feed displayed in markets not only specified ornament. Any path for the price of a ^ rack does not guarantee in any way the uncovering of other components of the asnkrar before the commodity in the domestic market wages and freelance workers earnings and profit rates and customs duties and other indirect taxes and transportation and insurance margins and neighbouring local primary and wasaaralmwad prices of non-tradable or Non-tradable and Semi-tradable goods. On this basis, the asnkrar or falling dinar exchange rate not sufficient in itself to ensure the stability of the General level of prices or to control rates rise even suppose asnkrar or even almsnzerdat prices decline in their markets of origin. The stabilization force yshanrt also the ability to control wages and all other components the uncovering, as it also requires absence of bottlenecks and structural constraints on the supply of goods ralsterrdh of walmttgh locally) arising from zetrada capabilities
These estimates and estimates of GDP without and with mining and quarrying constant. For example, hard delivery assadet conditions overcame the diameter that the average annual growth rates for the period 2003-2010 agricultural sector output at constant prices reached (9.5%) And the water and electricity sector output at constant prices (30.12%) And building and construction output in constant prices (2 h. 5%) (See tables 9 and 10 in the appendix). However, the path variables used in the conversion of current prices to constant prices (index price imports and reduced the implicit GDP excluding mining and quarrying) stating that the numerator decreases at a rate less than the rate of decline is a member of the conversion. This is the first to exceed the annual increase rates of price in Iraq for years 2004-2011 annual growth rates of prices of the biggest exporters to Iraq (see Figure 8 and table 11 in Appendix), and secondly to the declining exchange rate dinar for dollars in the market during the period 2003 — 2011 average
Annual (5.47 —%) Improved value of the dinar against the dollar with an annual average of (5.47 ham) (table 12 in the appendix). 9 including the cost of transport and insurance to Iraqi ports.
Tathmha George طثمحا• "Research [kosadih Rabo 1 of Eden 59 — L00 summer — autumn 2012"
6
Capacity to produce goods or tradable ^ especially those energies of master structures. for these bottlenecks remain dormant as long as the total demand on the untamed msenzii commodity the statistics on senior sec of altdsh stkei is not raised, only < they soon appear and begin the practice inflationary pressures and obstructive to the productive process and the smooth flow of goods when rising aggregate demand. And crisp these bottlenecks, exacerbated by the negative effects when combined increase in aggregate demand by changing the bagheto Wala krehto for goods or tradable. It is agreed that the demand for port services and taxis to the flow of goods to and from Iraq intensifies when mounting external and internal trade movement associated with the development of alaeshat economy, the demand for the building and construction sector and productive inputs increase by rising investment demand. And also the share spent on housing demand special lamination rises when a rising per capita income of low income, as well as brochures and the building and construction sector in GDP improves with rising investment share in aggregate demand in the short and medium term at least. The path followed by the overall level of consumer prices in Iraq after 2007 cannot be attributed entirely to the downward path of the dinar exchange rate. Other factors have contributed to the degree of at least the exchange rate, if not the largest, in calming the uncovering increases in recent years. The most important of these factors significant expansions in the untamed local commodity and ranks them from decline in the gap between the disease and the demand for tradable goods despite the rapid rise of the latter. Under the limited and poor domestic productive capacities, the credit is due to mutations in alasneradat, which in turn rose between 2003 and 2011 (9933.5) million to (47803) million in 2011, which is equivalent to (4.8) weak (see chart 3 and table 5 in annex). Due to the diameter of these amazing alasiradh rise in a relatively short period to cancel most of the blockades beyond the year 003 don't compact package and the demise of
10 for example: residential land, commercial and industrial (i.e. land for residential construction, commercial or industrial, equipped with basic services, including roads, electricity, water and sewer) walabthet residential, commercial and hotel services, banking, insurance, construction, brickworks and cement walghan, and

2012 "
7
Restrictions on export (and import) almtbthkh Iraq, and open all the border crossings to neighboring States. say we have allowed the financing of this expansion CITES Iraqi rights State retrieval in exchange revenue akftaih and marked increase of these proceeds beyond the year 2003 on the other hand (see Figure 4 and table ^ and no. 6 in the annex). It also has high unemployment rates (16 h/°) SIP altvaodd and work alaekabi and even if limited to basnerad the hand of over-crowded with toys cheap at ahantraa wage increases dissatisfaction. Third hand also contributed to the reduction of customs duties to the modest rates to decline in the rates of increase in the general price level and to a lesser degree of ex. 15
Patchwork rates compared to the prices of other commodity items to the General index of consumer prices as announced the Iraqi economy this limit (see exhibits a ^ THA ^ c ^, 5 and 6 and tables 2 and 3 in the annex). The rent yrtka usually either due to lack of housing demand compared to alabaeh and/or alabaeh assigned the figures ' residential-and on this basis, the rent is one of the indicators for measuring good approximate asphyxia from the limited capacity available for the production of many goods are not tradable or (medal land for residential construction walabaeh construction materials manufacturer, residential and extracted, transport, etc.). It is important to note in this context that the conviction justified the index
Iraq rights in oil revenues after the item you putthese revenues under the control of the United States and the United Kingdom.
See
Wikipedia. Sanctions Against Iraq, http://en.wikipedia.org/wiki/ Lifting of sanctions Sanctions against Iraq#
13 also helped in that secondary, but avoid the Iraqi Government of quantitative restrictions on imports and administrative.
,Iraq Business News
This refers to the source, Mr. Minister of planning announced in June 2012 fall in the unemployment rate (16%). this machinery could not
Paper from the source given recent data on underemployed (underemployment). It is unfortunate the total absence in the website of the Central Bureau of statistics for any data on unemployment and unemployment before and after 7008.
15 June 2003 the Coalition Provisional Authority shut down the system and custom definitions in Iraq at the time. In September 2003 the ashadkt what it called a reconstruction and the standard 5% tariff on all imported goods except food, medicine, books and other goods related to humanitarian assistance and reconstruction of Iraq.
See
Iraq-Business News, "Iraqi Import Tariffs Rise Sharply from March," 08 February 2011, http://www.iraq-businessnews.com/2011/02/08/iraq
طدمحا جورج طثمحا• "بوث [قصأدية عربية 59 — 60 صف ف — رف 2012 ' '
الرسم البياني رقم (3)
ا ^ ادات العراق (سيف) للمتوات 2003-2011

60000
50000
40000
6
0;
1
30000
? 0000
10000
? 003? 004 2005 2006 2007 2008 2009 2010 2011
90000 80000 70000 60000 *I 50000
40,000 and 30,000 20,000 10,000 0
2011 2010 2009 2008 2007 2006 2005 2004 2003
Iraq oil exports UI
Figure (4) value of exports from Iraq coverage

60 ' row p — Reeve 2012 "
For rent poplar by the Central Bureau of statistics gives estimates of undervalued large rise in rental housing because of the shortage in housing and the big jump in the cost of housing boom in residential land prices and the construction cost on the other. 16 because of the rise in rentals find increasing numbers of families and individuals themselves are obliged to participate in the skzrmtzl one. This expansion in the residential subscriber numbers per balmenr box higher rent per person at a rate lower than the
The need to calculate the evolution
Rent according to the latter.
Higher rent per apartment, box llmenr as calls for the precise definition of the requirements to
Figure (5)
Contagious Latvian annual change index ^ consumer index prices for rent in Iraq for the years 1996-2009) 1993 = 100)
100
80
60
40
20
0
-20
-40
Sales
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
General index ■ rent
16 no official data on the evolution of prices of residential land and building and construction. But according to one insider, the residential land prices rose in some suburbs of the capital in more than 15 times the cost of construction by more than 5 times between 2002
And 2012.
Tadmha George طثمحا• "Huth makes Arab 59 ~ 60 summer — Reeve 2012"
10
Chart (6)
Alsaeoet rates of change in the price index alsthaek number
O housing index 2010-2011

7011
Machine, water, electricity, gas
7010
General index
4. the intergovernmental agreement and the General level of lsaar in Iraq
Ysnvad from the above that aggregate demand is one of the most important determinants of general price المسترئ path. In Iraq is Government spending — both lamination walasnshari — one of the most important components of aggregate demand not to generated a huge multiplier 17 request, but more importantly for its prime location in the demand for final goods in the local market. Increased government spending in Iraq between the years 2008 and 2011 with about 85 times (1982548) million dinars in 2003 to (69639523) million in 2011 (see Figure 7 and table 6 in the annex) warkat to GDP excluding mining and quarrying at current prices of 21.52% in 2003 to 68.32% in 2010 (see table 7 in CLI).
7 according to Keynesian theory of income determination, independent demand generates a request through several more times. See ibid.
Rudiger Dornbusch, Stanley Fischer and Richrad Sta^z^^^££§^^^^^, pp. 222-225
Tadmha George tathmha. "Both [kosadih Arab 59 — 60-fold — Reeve 2012"
11
Drawing aleiani (7)
The State budget lnmtwat 2003-2011
120,000,000 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 0
2011 2010 2009 2008 2007 2006 2005 2004 2003
Overall total Expenses • surplus or deficit total revenue

Financed government spending in Iraq, as is the case in other developing countries oil mainly from revenue aktaih 18 the contribution of direct taxes and indirect taxes on such funding is very modest. This funding pattern indicates two things: first, that Government spending take a channel through the transfer and infusion of revenue aldalia
18 ymzel public expenditure for the most developed countries — if not all — and for many developing countries rely mainly on direct taxes on income and indirect taxes on goods. In those instances where the financing of this expenditure believes based on revenue generated by the exploitation of natural resources, which are only States that occupied the production and export of raw materials and space in its ahtsadi. Is balance the State budget or reducing disability through expansion of revenue or spending cuts or both. Assuming steady public expenditure, the balance or reducing budget deficits of the first group of States is achieved by expanding the tax revenue which means that these processes be ^ raean withdraw special access of economic cycle (from an economic trading) and pressing the final demand and ^ hush lamination from. In the second group of countries, or reducing the deficit balance under the same hypothesis is based on the income of natural resource, and combined with the following conversion and more revenue to the ahtsadet through public spending. It follows from this that the balance or reducing disability associated with the economic downturn, airlines achieved in the second case, without prejudice to the level of economic activity and final demand. And the pattern is likely to result in the second funding to step up private investment والاصتهلاكئ of final demand and further support for economic activity; the neighborhood pumping revenue from natural resource to economic cycle leads to expansion of the money supply and lower interest rates, which could stimulate private investment and private consumption on the rise.
Tadmha George طثمحا• "booth [kosadih Arab 1 of Eden 59 — 60 row p — rack 2012"
12
The economic cycle and trade almhedadi; and second, that the financing of Iraqi Government spending does not require scaling (shrinking) disposable income of honor and therefore not associated with betkhvidd final demand special consultant of walasthlam. These stresses that reducing the deficit or balance depending on income akftaih does not lead to a decrease in the expansionist implications of public expenditure at Headquarters, on the contrary, they have huge effects that either expanded view akkadi and a decline in interest rates and a rise in final demand, particularly investment, the ntibegh part of the 19 it also means that increased government spending in Iraq to increase aggregate demand in the governmental and non-governmental alike that this increase was funded in Spending only ^ ^ my Wataniya it (deficit) or through revenue akftaih (without failure). And that this increase in demand could raise inflationary pressures and whatever exchange rate path (i.e. whether the exchange rate stabilized or improved or ءهور) that led to the near total demand from the ceiling that still available energies to produce goods or tradable on the disease s.
As already noted, the track record of rent; very balmhetrab seed maximum energy available to produce a set of non-perishable goods or tradable. This indicates that continuing to push the Iraqi Government spending to higher levels would gradually expand the scope and severity of bottlenecks arising from limitations of the display limitations of available energies to produce goods or tradable, and that puts prices on mounts patchwork speeds, whether this spending was financed with oil revenues or alakonzad procedure (from the Central Bank or the public) or leveraged from I choose him, and whatever path the secret Exchange (i.e. whether The exchange rate has stabilized or improved or deteriorated). The Central Bank will in this case be unable effectively to altair path upward for the general price level or calming effects of acceleration even invested in its gradual reduction of the exchange rate (i.e. improvement a ^ Reggie for foreign currency dinar value; ykhrakolar) or the use of other monetary policy tools available to it in law. Based on the analytical framework the legislation law of the infrastructure and the implementation of ytstb sharp jumps in government spending to
19 shows our Hicks any model Hansen (IS-LM) the expansion of Keynesian theory larded instead of cash leads to falling interest rates and rising investment, total demand and other factors constant baftradd. See ibid.
Rudiger Dornbusch, Stanley Fischer and Richrad Sta^z, Macroeconomics, op. cit., pp.
239-267;
Laidler, David W., Demand for Money: Theories, Evidence and Problems, HaprerCollins College Publishers, New York 1993, pp. 3-23.
Hazedagorg tathmha. "Research اءقصاديه Arab aladdin 59 — 60 ' summer — autumn 2012"
13
Inflation accelerated memory and acute bottlenecks which she lit them explosive development during the period 1975-1935 and launched major development projects, Act No. 157 of 1973 to follow their implementation.
5. objectives and tasks of the Central Bank washkalhh monetary policy and exchange rate dinar:
Article No. (4) of the law on the Central Bank of Iraq duck basic functions albaek 20 2004. "in the introduction to this
Tasks "
Up the paint for Iraq, his Administration said. Except for the Government's operating balance "and in accordance with the law. Weino'ka coffee

 

 

 

 

 

The fixed based financial system market competition. " And work to "promote the development of almmtdamh and creating jobs and prosperity in Iraq" and in line with the objectives of the first 22, 21, appeared to be the central control supports albaek in the exchange rate as a tool in achieving the goal of securing stability, freedom and contain inflationary pressures. In line with the programme of structural adjustments ^ 2 Structural
20 Central Bank law in 2004, p. 9-10.
The Central Bank of Iraq Act 21 of 2004, p. 9.
22 the Central Bank enjoys a legally independent Lima's efforts to achieve its objectives and functions) Act, the Central Bank of Iraq of 2004 aalmadh No. 2 from 2 am 3 — 9 (and seen as one of the most important safeguards the principle of independence of the Central Bank's success in achieving its objectives and functions. operational main stretches of this principle to refrain from lending to the Government and the financing of the general budget of the State where the Iraqi Central Bank prohibited under article 26 of the law of credit directly or immediately pleased
To the Government or to any body with 1 hand mahao is owned by the State.
23 intended — "structural adjustment programme" that package of policies which aim to achieve the following: stability, privatization, deregulation, Privatisation and Stabilisation □ beralisation/Deregulation as the Trinity is
1 lthrtalmalatar is necessary for growth. To learn the details of this program can refer to the following sources
Rodriguez, Carlos Alfredo "Macroeconomic Policies for Structural Adjustment," Working Papers, The World Bank, August 1989; Zagha, Roberto, "Economic Growth in the 1990s: Learning from a Decade of Reform", The World Bank, Washington DC, 2005
See "Washington Consensus defines the most common development program ب—" Washington consensus
Williamson, John, "From Reform Agenda, A Short History of the Washington Consensus and What to Do Next", Finance and Development, September 2003.
Formulating monetary policy wekvizet in Iraq, including foreign-exchange policy... " And "possession of all
Tadmha George طثمحا• "symptom associated with Arab ymsadla Don 59 — 60 ' summer — autumn 2012"
14
Ad ^ stment Programme promoted by the international financial institutions International Financial Institutions to the Central yterli albaek control path pretty sight exchange of market forces, namely khalak by adopting free market mechanisms, tools and not through administrative procedures and controls.
As is the case for any commodity, the dinar exchange rate in a free and competitive market take a path upward when
Demand for money alagthbi on the market liberalized its untamed price, and take downs when vice versa,
Weisnkr when you balance demand with untamedfrom this price. On this basis, the Central albaek
Iraqi foreign alaekd are being deductions in the domestic market and dragging them according to changes in the factors alardd
And demand and ensure the check target path for the exchange rate in the market.
There are many sources of demand for foreign alaekd in the statistics. Traditionally occupied the foreign alaekd to finance imports top the list. Certainly, financing alastradat still occupies in the list alaravi foreign exchange demand not only that domestic demand for Foreign Exchange to finance the capital flow from the local market to global markets began to take increasing importance after the opening up of the economy and growing world market, tmvselh and under poor management, legal restrictions and penalties on humiliating that flow on the other. And stimulates the alttvk several factors including opportunities to invest in the foreign market with waknr to ensure better returns, and also available in a wide variety allows you to minimize the risks arising from the difficulty of predicting and forecasting economic fluctuations almkhzofh and may result in losses. However, the continued tension in the attractive almiasbb and tterldh of fear and concern over the political situation, asnkrar and appalling backwardness in infrastructure master, and deficiencies in institutional frameworks and the poor performance of existing ones, the poor environment alasnsharh and the difficulty of doing business, they remain the most important extruder domestic capital to foreign markets.
24 see balance of payments which are published in the annual alahasaeb releases for the Central Bank, which can be found
Http://www.cbi.iq/index.php/pid=Statistics through the website
25 based on the ease of doing business report for 2003 prepared by the World Bank, Iraq is ranked 122 out of Starring in a ranked 122 to start Doing Business Ease of 185 countries for ease of doing business, World Bank, Doing Business 2013, International Bank for reconstruction and Development/The Business see the World Bank, Washington DC, 2013, p.3 & 58.
Tadmha George tathmha. "Research [kosadih Arab 1 of Eden 59 — 60 ' summer — autumn 2012"
15
^ Sources became more diversified after the openness introduced almhesadi to beyond 2003. It was removed under this opening restrictions on flow of foreign capital to the local market, whether direct investment or introduced ^ alasshar financial procedures and legislation also issued several encouraging entry. But despite this openness does not and the export of ', herewith the main source of the Iraqi Central Bank of foreign currency as the local market satisfied and still limited capacity accurately to define grow contributing other exports and capital flow alagtbet in the diameter of the Al-ejtebi machine revenues and yarded in local market. 26, but in this context it is important to mention the weak or even absent the tide any role

 

 

 

The Iraqi Central Bank foreign exchange management, which gets the bulk of the Treasury to deposit oil revenues has replaced local currency. 27 weisaedl of course the secret Exchange and pronouncements, the key determinant of akkad alien by the CBI in the local market ytmanl to land acres; you'll need but the slow Exchange rate, and contributes to inflation and decline azaoaa percent rise in the general price level, and serves to stabilize the Arri first and allowing the accumulation of good foreign exchange reserves II. It is clear that the Bank's criticism poses a ^ yrdolar in the domestic market to finance imports and other types of demand for machine alagnni with secret Exchange target less significantly than of foreign exchange income deposits from alaeftih of the Finance Ministry and other sources. This is barkaa up 9.2 billion dollars in 2005? 2 to 67 billion US dollars in August 2012. and 2 it is important to note that the surplus
According to the reading of the balance of payments for 2003 — 2011 modest contribution from other sources in the pleural patrol boat in the local market.
27 income المتاءب State oil exports, are the property of the State budget. These revenues are flowing into the country through the CBI as the authority responsible for foreign exchange flows to and from the country. When deposited in the bank account is opened on behalf of the Ministry of pain 1 ybralmwaznh the value of the Iraqi dinar and the dinar exchange rate established by the Bank.
Index Mundi - Country Facts, http://www.indexmundi.com/g/g.aspx?c=iz&v=144 28
Tadmhagorg tathmha. "Research اءقصاديه Arab 1 of Eden 59 — 60 ' summer — autumn 2012"
16
Annual State budget) see Figure 7 and table 7 in the Appendix (is one of the important factors contributing to the surplus cash alagnd. as is well known, that part of the expenditure alhakos and some of the demand multiplier generated heading towards msnzerdh goods, which means that the failure to disburse all the public budget allocations associated with reluctance to expand alasiradat and the consequent demand for foreign alaekd.
C. monetary policy wetmobl the general budget of the State and the General level of an ^ the
Iraqi economy mvno'h economy in the sense that it does not place any restrictions on the flow of foreign alaekd and from it. And within this framework almzotsadi that give priority to control the path of the exchange rate or to stabilize important economic consequences on the functioning of the Iraqi almgtsad. The central control albaek balmarodd foreign exchange market the statistics to control the price of a ^ yhazl rack of central control albaek foreign currency reserve to a policy also disrupted rtterd paralysis on (one of the important tools llmitarh alaekdih) i.e. there control ^ alaekd introduced through adjusting the course price of alvathdh (the Ministry of Haq. water bkaidah its cash algaebi derived mainly from export akftaih to meet local currency Central albaek would widen Foundation alaekdi; 1 ^ the recruitment of these revenues to finance public spending would expand a ^ alaekdi r.i.p. And alaekdi basis as subsides and cash when the disease shrink albaek central foreign exchange put for sale in the local market. To confirm the Iraqi Central Bank to control exchange rate path requires it to sell) ask (or buy) withdrawal (from the foreign exchange market in order to secure the match alardd of foreign alaekd with demand according to the exchange rate target. it is clear that the size of the reserve at the end of alsaeh under this framework will be the ultimate given net results albaek alrczi in buying and selling alaekd alagaebi during alsousa. but it is also clear that the sale and purchase of foreign alaekd would lead to volatility Alardd alaekdi and accordingly the interest rate during the year that operations were intended to control the exchange rate or on foreign alaekd reserves. To freeze or
29, Ahmed Al-Zubaidi, the CBI h ^ p://www.iraqhurr.org/content/article/24674534.html
30 serious difficulties trying to enjoy at once — fully: the freedom of movement of capital and control the exchange rate and monetary policy independence. A number of ahtsadeyen were convinced of the impossibility of achieving this than them to label this trio with impossible Trinity
Impossible Trinity. For more details on hzelalmodoa can refer to the following sources:
Rudiger Dornbusch, Stanley Fischer and Richard Sta^z, Macroeconomics, op. cit., pp. 317-320 and pp. 512-515; Robe^ Frenkel and Lance Taylor, "Real Exchange Rate, and Employment," DESA Working Paper No. 19, February 2006, pp. 5-10; and Robe^o Frenkel,
.16. "Sustaining Sterilisation," G-24 Policy Brief No
31 alardd cash is known as equal to the product of the monetary base by a cash multiplier
Hazedagorg tathmha. "Research اءقثماديه Arab Don 59 — 60 ' summer — autumn 2012"
1/
Neutralize the impact of these operations on the alaekdi needs central to give albaek heavily to other monetary tools to control the monetary multiplier in particular to credit ceilings, they felt to open market operations to buy and sell government securities to control alardd cash or interest rate. The limited capacity of the policy alaekdih on altao'r on msenzi economic activity might justify acceptance now of the location. On the one hand, government spending (both consultative walasthlam) currently totally inelastic to interest rate, meaning that this expenditure is not affected by changes in interest rate is to be determined in the light of it. However, the modest contribution llaschar in total alasnshar not give it d

Edited March 15, 2015 by deniscanada

[Big_J]

[staunch]

352 posts, and 164 of them are bumps.

Sandfly Big-J,........Sandfly ;-)

["Fred"]

352 posts, and 164 of them are bumps.

Sandfly Big-J,........Sandfly ;-)

Lol