Iraqis create their own financial system: We deposit the dinars in the bank and store the dollars at home
For months, citizens have resorted to depositing dinars and storing dollars in homes, in an attempt to adapt to the exchange rate, while financial experts suggest adopting the dinar only in internal transactions, and ending dollarization in the iraqi markets.
This shift in the financial behavior of the Iraqis resulted in an increase in the volume of dinar deposits to more than 57 trillion dinars, yet 70 trillion dinars are still outside the banking system, according to information collected by the 964 . network
Economists and banking officials said that the financial behavior of individuals has changed with the exacerbation of doubts about the banking system and fears of a repeat of the Lebanese scenario, despite the central bank’s assurances that Iraq’s situation is different because the deposits are “guaranteed by a ”.specialized company
Economic expert Hussein al-Khaqani says that the dollar crisis has prompted citizens to change “the compass of financial transactions, away from banks, as ”.the majority resort to storing hard currency in homes Al -Khaqani added, to Network 964 , that“citizens who deal in dinars regularly, deposit it in banks to collect it in the short and not long term, in order to ”.withdraw it and convert it into dollars that are stored in homes
076/Raed Hamed ”financial model“
When the dollar crisis escalated, and the exchange rate for the $100 category reached 180,000, the engineer, Raed Hamed, (32 years old), followed a new financial plan, requiring withdrawals from his bank account in dinars, provided .that his salary, which he receives in dollars, be deposited in its place Hamed tells 964 Network , “I have two accounts; One of them is in dinars, and the second is in dollars, and when the local currency collapsed, I followed a plan to minimize the damage, by depositing my salary that I receive in dollars, and .withdrawing the equivalent or less of it in dinars
Officials and experts attribute the citizens lack of confidence in the banking systems to many reasons, most notably the lack of infrastructure in the more than 70 banks
However, the government is trying to introduce electronic points of sale (POS) that rid market transactions of paper cash, in favor of using electronic payment .cards
Smart financial transactions
An official at the central bank says, “The banking culture is making progress in Iraq, in light of the expansion of the use of smart cards, and the increasing “.number of employees who have settled their salaries
Despite this, there are about 70 trillion dinars circulating outside the banking .system, while the monetary mass is currently about 100 trillion dinars
The official, who declined to be named, added to 964 Network , “Hoarding money in homes prompted the Central Bank to take measures to promote technology in the financial sector, such as using smart cards to pay government transaction “.fees
The Central Bank went further, after establishing a “deposit guarantee company”, to secure customers’ funds, and in the event that a bank declares bankruptcy, the .company will compensate it
Last January, the Council of Ministers obligated all governmental and nongovernmental departments to open bank accounts and provide point-of-sale devices for electronic payment (POS), to collect money, and encourage people to .open bank accounts
7 million bank accounts
On the other hand, the Executive Director of the Association of Banks, Ali Tariq, believes that the dollar crisis has reflected positively on banks, with an increase in the demand for opening bank accounts by merchants for the purposes of financial transfers, especially after adopting the exchange rate of 1300 when .transferring abroad
Tariq added, in a statement to 964 Network , that“the volume of deposits are much less than that.
Tariq asserts that the final solution to the dollar crisis lies in “ending dollarization, and adopting the dinar in all sales inside Iraq, while the dollar is used for external ”.dealings in travel or importing goods and others lint
Source: Dinar Recaps
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