09/16/2012
BAGHDAD / JD / .. Confirmed the Arab Monetary Fund said Iraq from among the countries which depend on the system flotation orbit currency exchange, pointing out that the drainage systems prevailing in the global economies and Arab currencies, including 3 types first "floating fully" and that left to market forces by identifying currency exchange rate, as dependent other countries system "peg a single currency or a basket of currencies" and states "cooperation", Jordan and Lebanon, as well as drainage systems combine the former regimes.
The head of the training section of the Fund during the "financial stability", which concluded yesterday at the Fund in Abu Dhabi Ibrahim Alkrasna "are diverse exchange in the Arab countries to 3 types," noting that both Jordan and Lebanon and the GCC countries peg its currency fixed exchange rates against the dollar. "
He added, linking Libya and Syria their currencies unit SDRs, while Morocco linking exchange rate DRAM basket undeclared currency, where the euro weight largest in the basket and determined central bank exchange rate Moroccan dirham daily, and selecting the minimum and maximum exchange rate of the dirham.
And that link to a basket of currencies is to choose a system linked to a basket of currencies available, such as SDRs and other currencies baskets, usually based on the currencies of major trading partners of the state.
He Alkrasna adopt all of Iraq, Tunisia, Algeria, Mauritania and Sudan system "floating orbit of exchange", where value is determined currency in the market, according to the forces of supply and demand, and the government to intervene when necessary to re-route the exchange rate, in line with a set of criteria including the status of the current account and currency reserves foreign, depends both Egypt and Yemen floating exchange system.
He pointed out that "free-floating" leaves the freedom of exchange rate change continuously over time, consistent with market forces, and only the intervention of the authorities in this case to influence the pace of change in the exchange rate only, and not to limit that change.
And said Alkrasna "indicate the literature on exchange rate regimes that there impact of exchange rates on economic growth and influence either directly through influenced by the exchange rate or indirect impact of the exchange rate on both investment and trade and financial sector development."
Economic theory indicates that the effectiveness of countries to deal with the trade shocks depends primarily on the exchange system adopted in these countries, which in turn is reflected in the country's economic growth.
"In the event prices fall exports State, the impact on economic growth depends on the exchange rate regime, whether fixed or floating, pointing out that the low price of exports will reduce state revenues, which will lead to a decline in economic activity, as well as in employment. "
"In the case of the adoption of the state system a fixed exchange rate, it requires the state to intervene to keep the exchange rate of the local currency by starting to buy the local currency, will reduce the availability of these currency, to grant facilities and investments, which will negatively impact on economic growth."
He stated that in the event of the adoption of the state to a flexible exchange rate or floating, the state is committed to intervene to raise the exchange rate results in a lack of foreign currency and lead to a further decline in the price of the local currency which will reflect positively on exports and thus an increase in economic growth.
He explained that the impact of the exchange rate regime based on the level of sophistication in financial markets, as the flexible exchange rate is usually coupled with fluctuations high and that could have a negative impact on the economy unless the financial system is able to absorb shock and provide dealers with tools hedge occasion, so thought that there must be a sophisticated financial system if I want to take advantage of the flexible exchange rate. / End / Emirati Union /
The head of the training section of the Fund during the "financial stability", which concluded yesterday at the Fund in Abu Dhabi Ibrahim Alkrasna "are diverse exchange in the Arab countries to 3 types," noting that both Jordan and Lebanon and the GCC countries peg its currency fixed exchange rates against the dollar. "
He added, linking Libya and Syria their currencies unit SDRs, while Morocco linking exchange rate DRAM basket undeclared currency, where the euro weight largest in the basket and determined central bank exchange rate Moroccan dirham daily, and selecting the minimum and maximum exchange rate of the dirham.
And that link to a basket of currencies is to choose a system linked to a basket of currencies available, such as SDRs and other currencies baskets, usually based on the currencies of major trading partners of the state.
He Alkrasna adopt all of Iraq, Tunisia, Algeria, Mauritania and Sudan system "floating orbit of exchange", where value is determined currency in the market, according to the forces of supply and demand, and the government to intervene when necessary to re-route the exchange rate, in line with a set of criteria including the status of the current account and currency reserves foreign, depends both Egypt and Yemen floating exchange system.
He pointed out that "free-floating" leaves the freedom of exchange rate change continuously over time, consistent with market forces, and only the intervention of the authorities in this case to influence the pace of change in the exchange rate only, and not to limit that change.
And said Alkrasna "indicate the literature on exchange rate regimes that there impact of exchange rates on economic growth and influence either directly through influenced by the exchange rate or indirect impact of the exchange rate on both investment and trade and financial sector development."
Economic theory indicates that the effectiveness of countries to deal with the trade shocks depends primarily on the exchange system adopted in these countries, which in turn is reflected in the country's economic growth.
"In the event prices fall exports State, the impact on economic growth depends on the exchange rate regime, whether fixed or floating, pointing out that the low price of exports will reduce state revenues, which will lead to a decline in economic activity, as well as in employment. "
"In the case of the adoption of the state system a fixed exchange rate, it requires the state to intervene to keep the exchange rate of the local currency by starting to buy the local currency, will reduce the availability of these currency, to grant facilities and investments, which will negatively impact on economic growth."
He stated that in the event of the adoption of the state to a flexible exchange rate or floating, the state is committed to intervene to raise the exchange rate results in a lack of foreign currency and lead to a further decline in the price of the local currency which will reflect positively on exports and thus an increase in economic growth.
He explained that the impact of the exchange rate regime based on the level of sophistication in financial markets, as the flexible exchange rate is usually coupled with fluctuations high and that could have a negative impact on the economy unless the financial system is able to absorb shock and provide dealers with tools hedge occasion, so thought that there must be a sophisticated financial system if I want to take advantage of the flexible exchange rate. / End / Emirati Union /
