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Abolition of currency zeros .. Economic exit or deepening of the wounds? DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1

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Abolition of currency zeros .. Economic exit or deepening of the wounds?

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Abolition of currency zeros .. Economic exit or deepening of the wounds? Empty Abolition of currency zeros .. Economic exit or deepening of the wounds?

Post by claud39 on Mon Aug 26, 2019 10:01 pm

Abolition of currency zeros .. Economic exit or deepening of the wounds?




26 August 2019 06:58 PM







Abolition of currency zeros .. Economic exit or deepening of the wounds? 1024








From: Sally Ismail

direct:

Countries often resort to a policy of "zeroing out zeroes" to break a deadlock. Iran was the latest example of such a move, joining others such as Venezuela, Turkey, Argentina and Brazil.

And redenomination  is a process meant to replace the old currency with new ones worth less than the previous amount of discount zeros, for example , when you cancel six zeros from the currency, each million of the old currency will turn into only one category of the new currency , according to the amendment.

What is the goal of governments to delete zeros?

There are various reasons why governments may decide to remove zeros from the currency, but there are five reasons

These five reasons lie in obtaining international credit, restoring confidence and national identity, controlling the currency market, reducing inflationary pressures, as well as preventing foreign exchange.

Is canceling zeros always an effective step?

This move may only work with macroeconomic stability and a downward trend in inflation as well as a stable exchange rate as the government stops excessive spending and strong confidence in government policies.

But if the government is satisfied with this step without being accompanied by comprehensive economic reforms, the policy of removing the zeros will not only be ineffective, but it will be a failure soon.

Date removed zeros?

There are famous cases in history that reveal the governments of some countries to remove a number of zeros from their local currency.

According to a US study issued by the University of "North Carolina"; there are 70 cases of omission of zeros from currencies since 1960.

Nineteen countries have eliminated zeros in their domestic currencies once, while 10 have resorted to such a move twice.

Argentina has seen the elimination of zeros four times, while the former Yugoslavia (Serbia) to the deletion of five times, and Brazil also got rid of zeroes six times.

Bolivia has decided to get rid of the zeros twice, while Ukraine, Russia and Poland have accepted the measure three times, while Turkey, Korea and Ghana have carried out the move only once.

The most prominent of these cases was Brazil, which suffered an acceleration of inflation to the level of 2000 percent in 1993 and although all attempts to intervene government by removing zeros or changing the name of the currency failed, but that year succeeded in curbing the sharp increase in CPI by eliminating 3 zeros. Of currency.

From 1930 to the early part of the century, Brazil saw the elimination of 18 zeroes in 6 times and the currency was renamed 8 times.

Before the abolition of the local currency and the shift to the euro, Germany was the first to remove zeros from its national currency in the wake of World War I against the backdrop of economic pressure on the country and pushed inflation to high levels.

Given the experience of the Netherlands

The Netherlands suffered unexpected inflation in 1960, prompting the government to issue large-scale banknotes in an effort to meet the daily needs of individuals.

The Dutch government then began tough policies and cut four zeros of paper money in the country, enabling the government to control the amount of money.

Turkey was not an anomaly in this one-off situation, but it was an effective and relatively successful policy testimony by the IMF because of its ability to fight inflation.

After the dollar amounted to 1422 pounds in 1988 and reached more than 5.1 million pounds in 2003, to turn the largest banknotes of currency from the category of 5,000 pounds to one million pounds.

In January 2004 it was passed to remove six zeros from the old Turkish Lira decision with the postponement of step implementation of early 2005, enter the market coins and paper and metal new called "New Lira" to be one million old lira equal to one new lira

On January 1, 2009, the word "neo" was removed from the official name of the local currency of Turkey to revert to its former name Turkish Lira.

Zimbabwe was plagued by a runaway inflation crisis that also forced it to remove three zeros from currency in 2003, but the measure, which lasted for a short while, apparently failed as the government took no further steps in controlling inflation.

Nearly six years later, the Zimbabwean government decided to devalue the currency at zero immediately, meaning that 1 trillion Zimbabwean dollars would be equivalent to one Zimbabwean dollar.

As inflation in Zimbabwe worsened in 2008, the government was forced to cancel its currency the following year in exchange for using other foreign currencies before returning in 2019 to its original currency.

In an effort to curb hyperinflation, Venezuela occasionally cuts the zenith of its Bolivar currency, and despite signs of slight improvement, the picture remains bleak .

In mid-2019, Caracas announced that it was launching three new denominations of its local currency, 10,000, 20,000 and 50,000 bolivars, following steps to remove the zeros implemented last year.

In August 2018, Venezuela announced the issuance of a new currency to cancel five zeros of the value of its currency in the face of a severe economic crisis in a step of its kind .

What about Iran?

Under strong pressure on the oil-rich country from US sanctions, Iran announced its intention to remove four zeros from the value of its domestic currency, "rial" this year, to be the last country to resort to such a move.

The move, approved by the Iranian government on July 31, comes in an effort to tackle the problem of accelerated inflation against the backdrop of a sharp devaluation of the currency as a result of economic sanctions imposed by Washington following the withdrawal of President Donald Trump from the Iranian nuclear agreement in mid-2018.

The value of the Iranian currency fell from the level of 32 thousand riyals per dollar in 2015 at the signing of the nuclear agreement to the level of 120 thousand riyals per dollar at the present time, inside the black market (informal).

While according to official figures published on the website of the Central Bank of Iran, the dollar was equivalent to 42 thousand riyals at the time of the decision to cancel the zeros.

The Iranian government also approved the renaming of its currency to "Altoman," the former unit that was in circulation until 1925.

The Iranian people have been using the toman for decades, with a unit of 10 riyals, in a bid to simplify transactions.

According to the International Monetary Fund, Iran's economy could contract by 6 percent this year due to sanctions and growing instability in the Middle East.

This is not the first time that Iran has accepted this step, as it has seen the removal of three and four zeros back to 2007.

What about the advantages and disadvantages of removing zeros?

The issue of removing zeros from the value of the currency has many advantages, including the reduction in the size of banknotes and reduce the costs of issuing and depreciation of those paper money.

The simplification of transactions and the elimination of long queues in banks is one of the most important advantages of this process in addition to strengthening the value of the local currency compared to other currencies.

As for the defects and problems , are the costs of re-issuing banknotes and minting new coins in addition to the risk of capital flight abroad as investors await the results of this step.

Confusion among individuals in the short period of time following this step is an important problem as well as the psychological impact of the sharp decline in the value of salary in addition to the risk of depreciation of exports due to the appreciation of the local currency.

 





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Abolition of currency zeros .. Economic exit or deepening of the wounds? Empty DESPITE AT LEAST 20 STAMPS AND STAMP AND A SIGN .. IRAQI DINAR HAS NOT BEEN FREE FROM FRAUD

Post by claud39 on Thu Aug 29, 2019 3:02 pm

DESPITE AT LEAST 20 STAMPS AND STAMP AND A SIGN .. IRAQI DINAR HAS NOT BEEN FREE FROM FRAUD

Tuesday 27 August, 2019




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David's devotion

Following the imposition of the embargo on Iraq in the early nineties of the last century and the use of the former regime of printing currencies inside the country spread cases of currency counterfeiting and non-conformity with international standards and specifications in printing, and after 2003, replaced by a new edition has been printing presses Delaru in Britain with specifications sober difficult to counterfeit.

The political crises and weak government control over the circulating currencies allowed the spread of counterfeiting and the promotion of counterfeit currency and circumvent the citizens, according to local and international reports, as the Central Bank of Iraq published a statement on its website in 2018, entitled 'Know your money', which includes pictures of Iraqi currencies and security signs Which can distinguish between real and counterfeit currency. It included coins from the category of 250 dinars to the category of 50 thousand dinars, accompanied by shares indicating security signs, which include safety line and watermarks, visually variable ink and transparent window.

The director of the issuance and treasury department of the Central Bank Jaafar Ghulam, that the Iraqi banks discover each month amounts of not less than 200 million dinars, during the receipt of the amounts of deposits from citizens, explaining that the discovery of these amounts are individually for Iraqis who were victims of receiving counterfeit currencies, In addition to the announcement by the Ministry of Interior of the seizure of counterfeit currency.

Ghulam adds that "forged cash categories are often for the category of fifty thousand dinars and the category of 25 thousand dinars and less for the category of ten thousand dinars, pointing out that cash workers can detect counterfeit currencies easily, as the Iraqi currency in which at least 20 stamps and stamp Impossible to imitate, and they are means of protecting the currency from counterfeiting. "

He stressed that "the new editions of the Iraqi currency now includes new security additions such as transparencies, glossy and stamped, which is difficult for the most skilled counterfeiters to imitate, and that the coming months will see the replacement of the majority of large cash categories such as the category of 10 thousand and 25 thousand and 50 thousand new editions.

Meanwhile, Interior Ministry spokesman Major General Saad Maan said that "the past three years have witnessed the arrest of at least 240 arrests and arrests of gangs and individuals who were promoting the counterfeit currency in the country, and arrested and after questioning them revealed dozens of printing presses were visiting the currency in Baghdad And provinces.

He explained, "There are a number of models of counterfeit currency between primitive easy to identify because of printing by amateur inexperienced in this area, and that some counterfeiters use currency printers special printing currency, has been entered into the country illegally and has been detected, The Interior Ministry had arrested some of them in the Al-Midan and Bayaa districts of Baghdad and other provinces.

At the press conference of the most important activities of the ministry held in January 2019, Maan announced that the level of crime in all its forms in Baghdad decreased by 42% in 2018 compared to 2017, where the rate of crime for forgery and forgery decreased 53% and the crime of fraud and fraud decreased by 45% .

It is noteworthy, that the Ministry announced, on Monday, the arrest of an accused of counterfeiting foreign currency in Karbala.
Maan said in a statement that "detachments of organized crime intelligence in Karbala operating within the intelligence agency in the Interior Ministry arrested one of the accused in the province of Karbala."

He added, "The defendant works by counterfeiting currency as he seized a special paper used in counterfeiting currency.



https://n.annabaa.org/news40567
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