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Deleting currency zeros throughout the history of the world .. Will Iraq join the list?
Baghdad / Obelisk: The economic expert, Salam Sumaisem, said that the government is now obliged to reduce the value of the Iraqi dinar against the dollar in order to obtain greater quantities of Iraqi money against the dollar without printing more, and thus preserving the currency from collapse.
In an interview with the "obelisk", Sumaisem said that in the pre-2003 era, the currency was printed without cover and in large quantities, and it was reduced without a balance. Today, it can be reduced with a balance, indicating that this reduction increases the amount of exports because it pays people They import from abroad to the demand for local goods, which will lead to a devaluation of the currency and the demand for it becomes more.
Several countries resorted to writing off zeros of their currency, with the aim of restoring some confidence in the national currency by trying to absorb inflation represented by high prices and the erosion of purchasing value.
And deleting zeros from the currency is the process of replacing the old currency with a new one whose price is less than the old currency by the number of zeros that will be deleted, for example deleting three zeros from the Iraqi currency means that one dinar from the new currency is equivalent to 1000 dinars from the old currency.
And if Iran was the latest country to write off the zeros of its currency to restore confidence in the national currency by trying to absorb inflation represented by high prices and the erosion of purchasing value, then dozens of countries preceded it to measures of this kind that have exceeded the number of 70 since the mid-twentieth century.
Let us know the most prominent of these cases
On Monday, the Iranian parliament responded to a bill approved by the government of President Hassan Rouhani at the end of July 2019, and referred it to the Shura Council for many months, as it was subjected to extensive debate and conflicting opinions about the feasibility of a step of this kind, as an official at the Central Bank confirmed that deleting the zeros is supposed That it is contingent on controlling inflation first, warning that the possibility of an increase in the prices of goods and services is present, as well as the possibility of the return of zeros after several years. The government at the time decided to delete 4 zeros from its deteriorating currency and replace the riyal with the Toman in transactions, and this was approved by Parliament, but it is not The first time that Tehran deleted zeros, in 2017 the central bank had to delete one zero, but this time the decision means that one million riyals will be equal to 100 riyals only.
Multiple studies indicate that cases of deleting zeros from currencies have exceeded 70 since 1960, including cases carried out by 19 countries that got rid of zeros from their currency at once, and 10 countries resorted to this step twice.
Venezuela, Brazil, Argentina, and Bolivia The Iranian decision comes at a time of great deterioration of the riyal, as a main result of the severe sanctions applied by the administration of US President Donald Trump, which have found deep resonance in Venezuela, which is also subject to harsh sanctions. In the first stage of a recovery plan launched by President Nicolas Maduro, to issue the sovereign bolivar by deleting 5 zeros from the old currency.
As for Brazil, between 1930 and the beginning of the twentieth century, it got rid of 18 zeros in 6 batches, the most prominent of which was in 1993, when it suffered severely from the acceleration of inflation to the level of 2000% and eliminated 3 zeros.
Also, the recurring economic deterioration in Argentina led its authorities to take decisions to write off zeros from its currency 4 times.
Bolivia also got rid of its zeros twice. Turkey, Iraq and Sudan replaced Turkey the old currency by canceling 6 zeros starting in 2005 with a decision issued in 2004, so that one million pounds became equal to one lira, and it was withdrawn from circulation, and instead new currencies without zeros were introduced in the name of "New Lira" before the name was re-approved. The lira "separately, and it gave citizens 10 years to exchange their old currencies for the new currency from the headquarters of the Central Bank.
In Iraq, in 2014, it was proposed to delete 3 zeros from the dinar, but in 2015 it was announced that a new denomination of 50 thousand dinars would be printed instead of deleting the numbers from the 1000 and 10 thousand dinars denominations. Sudan also removed two zeros from its currency in 2007.
Zimbabwe This country deleted 3 zeros from its currency in 2003, and after only about 6 years had passed, it decided to cut 12 zeros, which practically means that every trillion Zimbabwean dollars became equivalent at that time to one Zimbabwean dollar!
Former Yugoslavia, Serbia crossed zeros in 5 batches, while the Netherlands deleted 4 zeros from its currency after it issued in 1960 paper currencies with very large numbers, and Ukraine resorted to deleting zeros 3 times, as did Russia, Poland, South Korea and Ghana.
09/26/2020 Looks like another proposal to delete the zeros again - DWS112
The central bank project to delete the zeros will be implemented in early 2017 Last updated 10/11/2016 And independent Iraqi news agency and /. X The governor of the Iraqi Central Bank, on Thursday, said the project to delete the zeros will be implemented in early 2017, indicating that the bank began to develop the first steps of the project. Keywords and said that " the goal of deleting three zeros from the Iraqi currency is to support the Iraqi dinar and make it a competitor of foreign currency," returned him as "that strategic project will serve the country 's economy." he added that " the Bank is working on the mechanisms in place towards the implementation of this project is expected to commence by the beginning of 2017 , " noting that " the central bank began the first steps of the project through the selection of designs, companies and the country that will be done Print currencies. " He noted that" the introduction of new currency does not mean the destruction of ancient coins , but it will continue to trade to about ten years , "pointing out that" this period will enable the central bank to withdraw the old currency in accordance with the mechanics will maintain market liquidity. " Finance Committee and was in former House revealed, (2013 August 15), the postponement of the process of removing zeros from the currency until after the next parliamentary elections, while confirming that the government is demanding guarantees for non - substituent currency back to the markets and forge. the Central Bank of Iraq confirmed, in the (April 25, 2013 ), that there is no intention at the moment to restructure the currency and delete the three zeroes of them, denying the reports in this regard. it is note worthy that the General Secretariat of the Council of Ministers announced (April 12, 2012), for the patient in the application process of deletion of zeros from the national currency, which had to be stop all procedures related to the transaction mentioned until further notice. It is noteworthy that some economists believe that Iraq is not formatted for the time being to delete the zeros from the dinar, pointing out that the deletion needs to be a security and political stability as well as economic stability. www.ina-iraq.net The Central bank: the project to delete the zeros will be applied beginning of the year 2017 Tomorrow Press / BAGHDAD: The governor of the Iraqi Central Bank, on Thursday, that the project to delete the zeros will be implemented in early 2017, indicating that the Bank embarked on the development of the first steps of the project. Keywords and said for “tomorrow Press”, “The goal of deleting three zeros from the Iraqi currency is to support the Iraqi dinar and make it a competitor of foreign currency “, he returned him as” that strategic project will serve the country’s economy. ” He added that “the Bank is working on the mechanisms used to implement this project is expected to start by the beginning of 2017,” noting that “the central bank began the first steps for the project through the selection of designs, companies and the country that will be done printed currencies “. He pointed out that “the introduction of new currency does not mean the destruction of the old currencies, but it will continue to trade to about ten years,” pointing out that “this period will enable the central bank to withdraw the old currency in accordance with the mechanisms will maintain market liquidity. ” The Finance Committee in the House of Representatives earlier revealed, (August 15, 2013), the postponement of the process of removing zeros from the currency until after the next parliamentary elections, while confirming that the government is demanding guarantees for non-substituent currency return to markets and forgery. The Central Bank of Iraq confirmed, in the (April 25, 2013), that there is no intention at this time to restructure the currency and delete the three zeroes of them, denying the reports in this regard. It is noteworthy that the General Secretariat of the Council of Ministers announced (April 12, 2012), for the wait in the application of the process of deletion of zeros from the national currency and that require action to stop all associated with the operation mentioned until further notice. It is noteworthy that some economists believe that Iraq is not formatted for the time being for the deletion of zeros from the dinar, pointing out that the deletion needs to be a security and political stability as well economic stability. Alghadpress.com
Iraq buys 48 tonnes of gold
Leila Ahmed Announced the World Gold Council (WGC) for the purchase of the Central Bank of Iraq's 48 tonnes of gold during 2014, bringing the Iraq reserves of gold material and contribute to the diversification of its reserves.
In an interview with Radio Free Iraq, the economic advisor to Prime Wazzramzar Mohammed Saleh importance that Iraq diversify its reserves of gold and the dollar so that the cover of the Iraqi currency, pointing at the same time that the states do not prefer gold much of the difficulty of his investment and the cost of flooring that paid for the country equipped fees. Saleh pointed out that gold typically constitute 6% of central bank reserves of hard currency, noting that "48 tonnes of gold at the moment, a gold in the bank the amount is sufficient and commensurate with the hard currency reserves."
It is believed a member of the Parliamentary Finance Committee MP Ahmed Rasheed flesh to buy this amount of gold may be used by the central bank as a cover for the new currency, which purports Bank issued and is also used as a cover for the process of deletion of zeros from the Iraqi currency. Rashid pointed to the current financial situation does not encourage the purchase of larger quantities of gold material.
To that count economist Bassem Jamil Antoine purchase this large gold "good gesture to diversify currency amounts and not limited balances at the central bank on the dollar only", pointing out that gold is one of the balances guarantor of the Iraqi economy, which contribute to maintaining the value of the Iraqi dinar .
The CBI had announced in 2013, on his quest to find a balanced ratio of gold with hard currency reserves, saying that as the size of the reserve increases less than the contribution of the other ingredients.
It is noteworthy that the International Monetary Fund said in 2012 that Iraq had boosted its gold reserves to reach more than 31 tons, explaining that Iraq bought 23.9 tons of gold in the month of August of the same year.
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