IRAQI DINAR EXPERTS OPINIONS 20-11-2013
Link: Chapter Bank of Iraq
20-11-2013 Iraqi Dinar ID Investor Eric: What is the financial condition of the Dar Es Salaam Bank of Iraq?
20-11-2013 Iraqi Dinar DG Guru: The financial condition of the Dar Es Salaam Bank is not much satisfactory at the end of this year. The bank adjusted its right and bonus shares and still found its value down by 35% which is a restless situation in the bank and among the shareholders of the company. Despite all of these financial situations, the bank has received a vote of confidence from its shareholders; this might increase the value of share in the global market.
20-11-2013 Iraqi Dinar Expert TD Edward: What is the main reason behind this situation of decreased value of share of the bank?
20-11-2013 Iraqi Dinar Expert IDI Basil: Most of the banks earning comes from the lending loans to the customers, companies and other different financial institutions and earn from the difference between loans and deposits. Unfortunately, the bank lends only 2% of the total loan in 2013. According to a report, this is one of the lowest ratios among the scheduled banks in Iraq. It is also important that the bank increased its capital in 2013 from 105 billion dinars to 150 billion dinars.
20-11-2013 IDD Expert Terrence: What are the major steps that the central bank of Iraq taking steps to stabilize its currency?
20-11-2013 Iraqi Dinar DG Guru: Since the new administration of the Iraqi government, the central bank of Iraq is also operating so effectively to control the inflations and to stabilize the currency of Iraq. Following are some of the most important elements that are being used to stabilize the currency of Iraq;
- Deletion of zeroes from currency
- Enhancing the production and export of crude oil
- Development of private sector
- Auction system and enhancing the capital of major banks of Iraq
20-11-2013 Iraqi Dinar Expert IDI Basil: How the deletion of zeroes will impact the currency of Iraq?
20-11-2013 Iraqi Dinar Expert TD Edward: There are two different thinking of the people, some are in the favor of deletion of zero and consider it as a positive point for the stabilization of dinar. According to them the value of dinar will improve instantly and it will also affect financial and accounting system of the country positively. If it happens then the Dinar will become 1.16 against the dollar which is 1116 against the dollar in the global market right now.
20-11-2013 Iraqi Dinar Expert IDD Colin: How the deletion of zeroes will make accounting and financial system easier than before?
20-11-2013 Iraqi Dinar DG Guru: Yes, it is a fact that deletion of zeroes will make accounting and financial system easier than before. At present, the financial institutions of Iraq have to pass the entries with huge amounts due to these three useless zeroes. In the case of deletion, an accountant will use only 1 instead of 1000 for passing an entry in its day book and it will also help them to deal with foreign companies easier than before.
20-11-2013 Iraqi Dinar Expert IDD Colin: What will be the role of private sector in the stabilizing the currency of Iraq?
20-11-2013 IDD Expert Terrence: Iraq remained depended over the oil and gas industries for the development and for the income of the country and did not pay any serious attention for the development in the other sectors of the economy that are so crucial for the development of the country. Small and medium scale industrial development are the key to the success of any country; therefore Iraq is paying especial attention to the other sectors of the economy including private industry.
20-11-2013 Dinar Deals Expert: What is the auction system in the central bank of Iraq?
20-11-2013 Iraqi Dinar ID Investor Eric: On each business day, the central bank of Iraq sells dollars to the different importers, large companies and many other financial institutions meet their daily transactions with the other countries. Number of companies bid on the dollar and purchase the dollars from the central bank of Iraq according to the need of their transactions. The system also helps to stabilize the currency in the country.
20-11-2013 IDD Expert Terrence: How auction system allows the central bank to stabilize the currency in the country?
20-11-2013 Dinar Deals Expert: It all depends upon the demand and supply of the dollar in the circulation. The auction allows the central bank to control the demand and supply of the dollars in circulation in the country. If the demand of the dollar is higher than the supply of the dollar, it will decrease the value of your home currency and if the supply of the dollar is higher than the demand that means the dollar is becoming lower and your currency is becoming higher in the value.
20-11-2013 Iraqi Dinar Expert IDD Colin: Is it true that auction system is the main cause in decreasing the value of dinar in the country and at global level?
20-11-2013 Iraqi Dinar ID Investor Eric: No, the auction itself is not a bad idea to control the demand and supply of the dollar in the country; it may be the methods or techniques that are being used for this system. The central bank of Iraq is facing some difficulties in controlling the value of currency due to smuggling of dollars to the other countries of the world by its home companies. Hope this issue will be resolved soon.
20-11-2013 IDD Expert Terrence: How these dollars are being smuggled to the other countries of the world from CBI?
20-11-2013 Iraqi Dinar DG Guru: At the auction, the different companies of Iraq show fictitious transactions and buy more dollars than their actual need. Then they sell these dollars to the other countries of the world especially to the Iran which has a big market for these smugglers. Some of them sell these dollars to the local exchange companies which are not under the control of the central bank of Iraq.