August 12 2011
Central Bank: the crisis of the dollar led to a large increase for inflation in Iraq
Baghdad, Deputy Governor of the Central Bank, there are no current alternatives to the dollar as the main currency in the world within the global monetary policies, both for of cash reserves or to cover the cash, noting that the global crisis led to high rates of inflation in Iraq, pointing to the existence of concern, but he stopped short of fear on the Iraqi economy, despite the low dollar exchange rates, because this coincided with the rise in oil prices.
The deputy governor of Central Bank of Iraq, Dr. the appearance of Mohammed Saleh, in a dialogue with the agency (Voices of Iraq) on "The dimensions of the crisis debt the U.S. and its repercussions on Iraq and the countries that deal in dollars," that Iraq had "influenced by the global crisis the new light of the emergence of the so-called imported inflation during the last three months, which is reflected in clear on the inflation rate in the country."
He added that "high food prices in world markets because of the low value of the dollar, in addition to the high value of imported goods led to a rise in the number basis of the prices of 3% as big as annual inflation in January of this year, to 6.4% during the month of June, where the beginning of the year within the acceptable limits, while it had risen to unacceptable levels in recent months."
He added: "The reason the dollar crisis is that there are two tracks:
_first track and a cover of cash through the reserve to cover the trade deficit is What recourse has a habit of developing countries where there are reserves in the world of about $ 9 trillion, China's share, which represents a reserve of cash world's largest and accounts for approximately a third of the size of reserves to the dollar zone, as has the East Asian countries more than half of the cash reserves."
Salih noted "Developing countries retain up to 55 percent of its reserves in the form of dollars, while keeping the developed countries about 60 percent of its reserves in the form of dollars, and that means in total that between 55 to 60 percent of the volume of foreign currency reserves in the world is in dollars, while a dollar 87 percent of the volume of world trade, and give more than 50 percent of global banks loans in dollars."
He added that "the dollar for each of those Alosab currency with the dominance of the balance of trade payments world, with more than 90 percent of dollar reserves invested Khawwalat Treasury U.S., although The U.S. economy is only 25 percent of the gross total, in the world, but the effect of dominance for the U.S. economy comes from three points
_first is the focus of Tknlogi as the standard technological as the U.S. lead of nearly five years on the technology globally competitive, .. and the
_second is the military dominance .. and the
_third economic dominance that U.S. economy inherited the international monetary system after World War II in 1945 and turned it from a gold system to the International Monetary Fund, who believed the dollar is the currency in the world."
He pointed out that "these three elements made the dominance of U.S. economic dominance Marictalah what is known as the concept of Almarictalah new, which is that it has the force has the wealth, "noting that" Almarictalah old was driven by the Spaniards in the sixteenth century through the adoption of military force to control the sources of wealth that is gold, fell through the industrial revolution and technological progress, which pushed Spain to Britain and France".
He added that "because of military dominance of the current U.S. and economic weight of a U.S. currency current admissibility of a global, but also represents at the same time an obligation is deferred to the U.S. government, so the subject of religion deferred the U.S. is 100 percent of gross U.S. national, if not more, and this indicator of a significant negative as the growth rate of real U.S. economy about the size of debt, the U.S. economy will collapse and the size of growth required to reach the stage of coverage of public debt is five and a half percent growth in net to overcome the debt problem, but this ratio is difficult to access them now."
And on the economy can play the role of the alternative for the U.S. economy in the event of collapse, Saleh explained that "the European economy and the Chinese economy are that come after the U.S. economy, and they suffer in turn from the problems as the crisis facing the European economy because of the crises in Italy, Spain and Greece make the European economy an alternative is realistic in addition to link China's economy, which is witnessing strong growth and a giant, but he linked to a large U.S. economy, which can not make him a substitute, which makes the world situation complicated to get out of this crisis."
He said that "some countries have resorted to gold as an alternative to hedge the cash, even if informally, where not considered the gold cover of cash he is not a monetary system, but it is a system of cash floating subject to supply and demand, and is considered a hedge to see prices of growth in the light of falling currencies."
And on the concept of dollarization and its hegemony over the Iraqi market and the possibility of bringing other currencies replaced dollar, Saleh said that "the concept of dollarization does not mean to bring the dollar given to the local currency, but rather is a process to bring any foreign currency alongside the national currency in the balance of payments, due to the fact that Iraq is located within the area of the dollar in the trade balance, because it depends on oil and oil commodity dollar, in addition to international restrictions on the dealings of cash as the incubator Amlath basic and garrison them in the present time is the United States of America, There can shift from the dollar at the present time."
He noted that monetary policy in Iraq "is concerned about the future, but it does not feel fear, the fact that crisis is universal, specializes country without the other and Iraq within the system of global economic, and the secretions of the past years that have led to a reduction of dollar exchange rates, offset by a rise in oil prices more than the value of the decline, which makes the Iraqi economy does not seem in danger. "
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