The quality of production and the volume of exports determine the strength of the currency
T he strength of any currency in the world is determined by a set of factors, some of which are external and internal, perhaps the most important of which are production and export, and a currency cover filled with the cash reserves in the central banks of countries.
Since Iraq has a good currency cover, but it lacks the other factors to sustain sufficient production and export the surplus, and although it exports oil, this is not a commercial commodity that can be exchanged, according to the World Trade Organization.
In this regard, economic researcher Firas Amer believes that “there are a number of reasons that make this currency strong.”
And those are weak and a third on the verge of collapse.
Amer added that “the currency is a coin or a monetary paper with a specific value that is guaranteed by law by its issuer and usually issued by the central banks of countries, and that there are a set of factors that determine its value, some of which are external and internal factors.”
He explained that “economic factors, in addition to political and military factors, also have a role in determining the value of the currency in the global currency market, and the value of the currency is determined by the country’s wealth and natural reserves (gas, oil, minerals) and the state’s assets, whatever their source.” The value and strength of the currency is also based on the size of the monetary reserves, and the country’s production and export capacity.
He pointed out that there are political factors that support the position of the currency, such as the military power and the geographical spread of the country and linking the trade of some important commodities in the world to a specific currency, as is the case with the dollar.
For his part, economic affairs specialist Jassim Hadi believes that “what determines the price of the currency in the markets is the supply and demand for this currency, like any commodity in the markets, as there are many factors that control this supply and demand, some of which are related to the performance of the real economy of the state and its production and service sectors, and the other It relates to dangerous practices such as speculation on currencies and debt securities, in addition to political factors.
Hadi said that “among the factors that control the currency price, the country’s trade balance situation is, the stronger the exports are the imports, the greater the demand for the local currency, and the more the trade balance is imbalanced in favor of the trading partners, the more the demand for the currency decreases and its price falls against the currencies. other foreign.
He continued, “When a country exports more than it imports, it achieves a financial return, and this leads to an increase in demand for its currency and increases the market value of this currency, but when it imports more than it exports, this leads to a decrease in the trade balance, and in return the balance of payments (financial operations between countries) As a consequence, the market value of the currency will decline, and possibly its collapse if the imbalance worsens.”
And the more the trade deficit worsens and the state is unable to cope with it, the more this affects the value of the currency in this country, and this is justified by the fact that the authorities are forced to increase the resort to loans and thus increase the interests and then inflation.
For her part, economic researcher Lubna Al-Shammari confirmed the possibility of supporting the strength of the Iraqi currency after studying and analyzing the reasons for its decline, and standing up for real treatments.
Al-Shammari added that “one of the reasons for the current situation of the Iraqi currency is the weakness of the volume of production, and therefore it must be increased by putting an end to imports and making them limited to what cannot be produced locally, whether it is food production, consumer or other.”
She pointed to “the need to enhance non-oil exports and activate investments, in addition to providing government support to the private sector in the agricultural, tourism and other supporting sectors, which would raise and increase the strength of the dinar and adjust the exchange rate to make it compatible with Iraq’s capabilities, history, relations and geographical location, which qualifies it to be Its currency is strong with the currencies of neighboring rich countries. inkl
Interact with the white paper
Active political and economic forces in the economy and society differed on what was stated in the white paper, and this is the nature of things with each new, especially we are a society that differs according to vertical rather than horizontal affiliations, where the sub-identity flourished at the expense of patriotism, and this is the reality of the situation before and after 2003, so The white paper comes with a pragmatic spirit concerned with the new construction immediately after overcoming the futility of fighting the old.
Its six goals, which begin with redefining the role of the state according to the constitution, up to the last goal of protecting vulnerable groups in society, passing through four logistics, are supposed to create an infrastructure for the last goal, which is the protection of vulnerable groups.
These groups have a direct relationship to national security and provide stability for investment, as they cracked many of the policies of the past forty years, and given the financial abundance and growth according to the expectations of the World Bank of 9/8% thanks to oil, the Ukrainian war and the Corona, these groups are suitable for the process of protecting them to be a central goal number one
And the rest of the paragraphs and logistics of political and economic reform, which we mean by protecting vulnerable groups is the provision of public services from the provision of education, health care and social protection, as mentioned on page 7 of the white paper, and that the fragile groups will become an active group for the public interest after the spoils and the fragile political and moral sharing .
The ration card alone is economically isolated in terms of allocation, as it remains emergency and temporary, in addition to that, any ration card is incomplete for poverty ranging between a quarter and a third of the population, and the ration goes a lot to those who are not entitled to it. As the two services floated to deepen and perpetuate poverty in combination with the cost of generator and communications, thus becoming the ration card alone and threatened by the financial and economic arenas, and therefore the secret of the fragility in front of these descriptions lies in social security, in implementation of the constitution that oil belongs to the people, through the enactment of a law that translates the paragraph on ownership oil.
The alternative guarantor that constitutes sustainability for food, medicine and services with its health, educational and social security wings is the agricultural, animal and industrial product, so that our factories are not just a secondary tributary in the provision of materials, which is that its raw materials are Iraqi from sugar cane and beet farms to tea farms in Southeast Asia, passing through farms Olives, cotton seeds and sunflowers, as well as the rest of industries and agriculture by modernizing the latter through licensing rounds to provide water, which was determined by the geography of Iraq as a downstream country, which did not use its supposed papers with the upstream countries. We are a source country.
The white paper is ahead of the entities and components, as it realized the situation that others did not present any financial or economic paper, nor did they see the minimum level before or after all electoral cycles, which gives it the most likely being a realistic vision more than many, despite its shortcomings and liberalism. link
Iran announces the date for Iraq to pay its debts
The Chairman of the Iranian-Iraqi Joint Chamber of Commerce, Yahya Al Ishaq, announced today, Saturday, the provision of the grounds for the repayment of Iraqi debts to Iran, setting a date for the start of payment.
The Iranian news agency “IRNA” quoted Al-Ishaq as saying that “the normal procedures for paying Iran’s financial dues, based on the agreements reached by the two countries, will begin in the coming days.”
He added, “The visit of the Iraqi Minister of Electricity Adel Karim to me Tehran During which they discussed the repayment of the Iraqi debts owed to the Iranian ministries of energy and oil, adding, “The ongoing transactions between the two countries are conducted through the private and public sectors.
He explained, “The commercial exchanges of the public sector are taking place in the field of energy, and the sector demands…Iraq A billion dollars in money, and you will pay it back Baghdad Based on the agreements reached by the two countries and within the framework of the Central Bank’s strategy.”
He continued, “The Iranian private sector demands, from…Iraq Amounts of money worth $9 billion, and there is no problem with the payment system, and they are received in different ways.”
He pointed out that “agreements were reached regarding the continuation of importing Iranian energy to continue trade between the two countries in this field following the visit of the Iraqi Minister of Electricity to Iran link
Source: Dinar Recaps
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