Deficiency in the Demand & Supply of $U.S Increased Price of $U.S

Iraqi Dinar 123 News:– A famous economic expert Awad Fadhil said that deficiency in the satisfaction for the demand of foreign currency reflected the wish of Iraqi people to cover imports or transferring capital abroad. It has shown a continuous pressure on Iraqi dinar and not showing stability in the Iraqi domestic markets. He said in a press interview that this kind of situation demands a handsome movement in the market and to stabilize Iraqi dinar exchange rate against the U.S dollar as officially desired. It also replicates the fact that the request of singles and banks overwhelmed the foreign currency. Any kind of deficiency or unavailability of the U.S dollar would increase the burden on Iraqi dinar currency and it would stop Iraqi dinar to rise in the domestic market.

The monetary authority fortified Iraqi dinar exchange rate by implementing administrative constraints for the first months in the year 2012 with the terms in getting foreign currency. The rules didn’t mention the participation criteria in the daily sales auction of foreign currency at the Iraqi Central Bank including the weekly shares of banks in buying foreign currency. This process was unable to stop maximum amount to sell the foreign currency in the daily sales auction at CBI. It also increased the volume of funds transferring of foreign currency abroad. It is important that Iraqi Central Bank sold foreign currency at fixed or lower price; it increased smuggling and money laundering. The CBI decreased the sale of foreign currency in daily auction of foreign currency at CBI. It generated a big gap of demand & supply in the Iraqi domestic market, which caused an increase in the price of U.S dollar against Iraqi dinar.

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