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Talk about re-work coin and delete the zeros from the paper
A member of the Parliamentary Finance Committee revealed that there is a tendency to reintroduce the coin that has been used for decades in the country, while another member of the Committee proposed to pre-empt the coining process by “deleting zeros” from the current currencies so that there would be value for the small cash classes.
The committee member, MP Hanin al-Qadu, that "during meetings and discussions with officials at the Central Bank stressed the need to re-work coins that were used in Iraq during the past decades, rather than paper that is damaged and printed in large quantities again."
He explained, "The use of metal categories and their descent for trading gives a notional value of the currency," noting that "a number of neighboring countries (exchange rates are very high against the dollar) and yet we find that it has a coin in order to preserve the currency and not need to request more papers Cash, especially in small categories. "
He expressed surprise at the "policy of the Central Bank, which does not favor the introduction of coins for circulation in the Iraqi market."
The Central Bank of Iraq announced in April 2005 to offer coins of denominations of 25, 50 and 100 dinars for circulation for the first time after it was canceled by the regime of Saddam Hussein after the Gulf War in 1991.
The Iraqi currency was canceled in 1991 when the international economic embargo on the country to increase the rate of inflation in Iraq by 1000%, and the result of the situation under the economic siege and a significant rise in prices led to the destruction of the value of the Iraqi currency and reaching a very low and severe exchange rate , Which made the coin and the few currency denominations without value.
It is noteworthy that the Iraqi dinar, which was equal to 3.22 dollars before the occupation of the former Iraqi regime of Kuwait in 1990, its value fell to one dollar equivalent to three thousand dinars by 1996.
Another member of Parliamentary Finance said, "The cost of a coin is more than paper money, and it is more difficult to carry it on the citizen."
MP Ahmed al-Saffar said that "inflation in the economy prevents the minting of coins and make them circulate among citizens," suggesting that "there is a step to delete the zeros before the coinage process to be a value for small groups to large."
1 - 29 - 2014
Exchange rate 1000 old to 1 new
After Deletion of three zeros
No Millionaires Will be made by holding onto the old currency that will get Redenominated
A rupiah redenomination bill is currently being sought by the Indonesian government and it is asking the House of Representatives to start the legislation process for the bill next year.
The redenomination is an attempt to simplify currency transactions by replacing the currency with a new one. In the past, officials have mooted the idea of removing three zeros from the rupiah. For example, a Rp 1,000 note would become simply Rp 1.
Finance Minister Agus Martowardojo conveyed the plan to House Deputy Speaker Anis Matta on Friday, according to Ignatius Mulyono, chairman of the House’s legislation committee.
“The House accepted the government’s plans,” Ignatius said. “We are now awaiting the draft to be submitted to the House.”
Ignatius said that the House would discuss whether the redenomination bill could be included in the 2013 national legislation program — a list of bills that the House targets to ratify during a year.
An academic study of the bill, Ignatius said, has been completed. “With the redenomination, transactions would be simpler and faster,” he said.
Bank Indonesia has introduced higher-denomination bills five times since 1964 because of inflation. That makes current daily transactions often run into the millions of rupiah.
The Rp 100,000 ($10.43) note is now the second-highest denomination banknote in the region after Vietnam’s 500,000 dong note.
There are concerns, however, that the proposal could devalue the currency. But Ignatius said that the House would ensure that the government would conduct intensive socialization programs for the public should the bill be passed.
Agus said that the government and Bank Indonesia had coordinated closely to transform the redenomination idea into a workable plan.
He also added that any redenomination process would take anywhere from five to 10 years to complete.
One of the likely consequences of a redenomination is marked prevalence in the use of coins because they are worth smaller denominations.
1 - 24 - 2014
TEMPO.CO, Jakarta - Center for Strategic and International’s economist Haryo Aswicahyono, said currency redenomination should be done after general elections where the public psychological condition is relatively stable to prevent politicalization.
"The current situation is unstable. If the people are panic because of redenomination, banks may be affected," Haryo said yesterday. According to him, most people have not understood about redenomination and often mistaken it with sanering (slashing of currency's value).
Bank Indonesia (BI)'s governor Agus Martowardojo previously said redenomination needs economic and political stability. One of the influencing factors of national economy is the fluctuating global and domestic conditions and last year's current account deficit.
According to BI's deputy of payment system, Ronald Waas, although the economy is unstable, redenomination must be done. The House of Representatives (DPR) has established a special committee and the central bank has informed the public about redenomination.
The government has planned to implement redenomination policy by removing the last three digits in rupiah. Redenomination bill has been submitted to the DPR and is expected to become law this year.
Redenomination has been said to need seven years of preparation which includes printing, designing, distribution, socialization and education. "Our country is big. Preparation and committment from all sides are needed," Ronald said.
1 - 16 - 2014
Bank Indonesia (BI) Governor Agus Martowardojo has said a stable economy is the key to the successful implementation of the redenomination that will replace Rp 1,000 of the old currency with the new Rp 1.
“We want to make sure that the redenomination will be successful, but one of the keys is that it takes place when the country’s economy is stable and in good condition,” he said in Jakarta on Thursday, as quoted by Antara news agency.
Agus said that in 2013, domestic economic growth was corrected and the impacts of global fluctuations could still be felt in 2014.
“The US Federal Reserve’s monetary stimulus has been reduced while domestically, the inflation rate in 2013 has increased, exceeding the targets expected,” said Agus.
Moreover, he said, Indonesia’s current account was predicted to remain at a deficit of 3.5 percent until the end of 2013 and the weakening of rupiah exchange rate was still a challenge for the country’s economy this year.
“To ensure the redenomination’s targets can be achieved, it would be better that we don’t push ourselves to implement this in a less than proper situation,” said Agus.
Similarly, Deputy BI Governor Ronald Waas said one of requirements for the implementation of the redenomination was the stable economy and political situation.
“The current economic situation is less conducive to implementing the redenomination,” said Ronald, while mentioning the redenomination plan would still continue.
“The President’s directives must go on. The House of Representatives has established a special committee while public discussions have taken place,” he added.
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