20 Feb 2012
BAGHDAD – The process of removing three zeros from the Iraqi dinar and replacing current banknotes with new ones will begin in September, announced the economic committee of the Council of Representatives as part of an agreement with the Iraqi Central Bank (ICB).
The announcement, which will see the ICB re-print 30tr dinars ($26bn), was made despite government fear over the project.
Economic committee member Abdul-Hussein Abtan said: “The agreement includes granting the process of switching currency [for a] full year where [both the] old and new currencies will be dealt in the market during this stage.”
The ICB described the project as a positive move for the Iraqi economy. But particular arms of government expressed fear that the project will increase cases of money laundering and are working to convince the ICB to stop the process. The securities committee said deletion of the zeros will affect negatively financial trading in the stock market.
Abtan added however that the process “will contribute to dealing [with] inflation and facilitating economic cooperation with international banks and reducing social differences in the community.”
The ICB previously said that it will consider the requirements of the project with the Council of Ministers to determine whether or not a law needs to be implemented.
The financial committee of the Council of Representatives said on Sunday that the passing of such law would allow Iraq to address economic inflation.
The move to delete the zeros will reduce the number of bank notes in circulation and simplify Iraq’s payment system.
The ICB is responsible for maintaining price stability, implementing monetary policy and regulating the banking sector.
© AK News 2012