2023-12-10T06:55:50+00:00
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The institution stated in a report published today that the value of the issued cash currency increased from 78 trillion dinars at the beginning of the year 2022 to reach more than 102 trillion dinars at the end of the year 2023, with a growth rate in the issued cash currency amounting to 9.24% during 2023 and a growth rate in 2022 amounting to 20%, an increase. For the year 2019, by 58 trillion Iraqi dinars, according to data from the Central Bank of Iraq.
The report added that the cash currency outside the banking system amounted to approximately 93 trillion Iraqi dinars, an increase of 30% compared to 2022, and it is the highest volume of funds existing outside the banking system throughout the history of the Iraqi banking system.
According to data from the Ministry of Planning, the population of Iraq reached 43 million people in 2023, with only 60% of them over the age of 15 years. Therefore, the number of Iraqis’ population who are more than 15 years old exceeds 26 million people, and based on the Ministry’s figures Work, which indicates that the size of social welfare beneficiaries is approximately 14 million people, while the number of adult Iraqi citizens who are not covered by social welfare is approximately 12 million people.
The report indicated that, based on data from the Ministry of Labour, the Ministry of Planning, and the Central Bank of Iraq, it can be concluded that the average value of each Iraqi’s 12 million people hoarding money in the Iraqi currency “exclusively” is approximately 7.2 million Iraqi dinars per citizen, higher than the year 2019, which was approximately 4 million. Iraqi dinar.
According to the Foundation, considering that each home contains at least two adults (a man and a woman) who are not covered by social care, the rate of each Iraqi home hoarding money exclusively in the Iraqi currency amounts to 15 million Iraqi dinars, which is a higher percentage than in 2019, which was approximately 8.12 million dinars. Iraqi.
The report noted that, based on these official figures issued by official authorities, every adult Iraqi citizen over the age of 15 (man and woman) who is not a beneficiary of social welfare was able to increase his money stored in Iraqi dinars by 1.2 million Iraqi dinars during the years 2022 and 2023 despite From the decline in the value of the dinar compared to the dollar in the local market, in addition to the rise in commodity prices and the rise in inflation rates by 4%, according to data from the Ministry of Planning.
Hoarded money is defined as the value of money that a person keeps away from the banking system, and does not invest it or buy his own assets, but rather keeps it away from financial institutions and exclusively in the Iraqi currency and not in other currencies.
The institution concluded in its report that some believe that these numbers may be illogical, and that Iraqis are suffering from a major shortage of funds and deteriorating social conditions. However, what is proven is that the Central Bank of Iraq has, in two years, exported more than 24 trillion Iraqi dinars, warning that more Of the 22 trillion Iraqi dinars that were hoarded by adult citizens and non-beneficiaries of social welfare.
How can the Iraqi government address the issue of cash hoarding among citizens to improve economic resilience?
Interview between Time.news Editor and Financial Expert Dr. Layla Hassan
Time.news Editor: Good morning, Dr. Hassan! Thank you for joining us today. There has been significant news regarding Iraq’s cash currency and economic landscape. To kick things off, could you summarize the key findings from the recent report published about the issuance of Iraqi dinars?
Dr. Layla Hassan: Good morning! Thank you for having me. Certainly! The report indicates that the total issued cash currency in Iraq increased from 78 trillion dinars at the start of 2022 to over 102 trillion dinars by the end of 2023. This represents a growth rate of 9.24% in 2023, which, while positive, is a notable decrease from the impressive 20% growth rate seen in 2022.
Time.news Editor: It’s interesting to see such substantial growth, yet a decline in the growth rate. What do you think are the factors contributing to this slower pace of currency issuance in 2023?
Dr. Layla Hassan: Several factors likely come into play. Economic stability, inflation control, and government policies regarding currency management can greatly affect growth rates. Additionally, Iraq’s external economic environment, particularly oil prices, which are crucial to its economy, also play a role. Decreased foreign investments or internal challenges affecting productivity could have slowed down currency expansion this year.
Time.news Editor: You mentioned that a significant portion of cash is outside the banking system, reaching approximately 93 trillion dinars. What implications does this have for the Iraqi economy?
Dr. Layla Hassan: This is a critical issue. Such a high amount of cash outside formal banking channels signifies a lack of trust in the banking system, which can stifle economic growth. It prevents monetary policy from being efficient and limits the government’s ability to effectively monitor and regulate the economy. This can lead to issues such as inflation, as more cash in circulation without proper oversight can drive prices up.
Time.news Editor: The report pointed out that about 14 million people in Iraq benefit from social welfare programs, while about 12 million do not. How does this disparity impact economic resilience and the overall financial landscape?
Dr. Layla Hassan: The disparity is concerning, as it highlights the economic vulnerability of a substantial portion of the population. Without social welfare support, these 12 million people face greater financial instability, influencing consumer spending and overall economic health. Addressing this gap is crucial for economic growth and social stability. Increased welfare could enhance purchasing power and encourage spending, which is vital for stimulating the economy.
Time.news Editor: It seems like there’s a growing trend of hoarding currency among citizens, with an average of 7.2 million dinars per individual. What factors do you think contribute to this behavior, and what might this imply for future currency circulation?
Dr. Layla Hassan: Hoarding often stems from economic insecurity and a lack of trust in financial institutions. The increase from 4 million dinars per citizen in 2019 to the current figure suggests that many are preparing for uncertain economic times. This trend can hinder the velocity of money, where even though there may be more currency in circulation, it is not actively used for transactions. This behavior can create a stagnant economy unless measures are taken to restore trust in financial systems.
Time.news Editor: Thank you, Dr. Hassan, for your insightful analysis. In light of these findings, what recommendations would you propose for policymakers in Iraq to enhance economic stability and improve the efficiency of their banking system?
Dr. Layla Hassan: I would recommend strengthening the banking sector by enhancing regulations, increasing transparency, and building trust among consumers. Education campaigns to inform the public about the benefits of using banking services can also encourage deposits rather than hoarding. Furthermore, expanding social welfare programs to cover the vulnerable populations will be essential for improving living standards and stimulating the economy. fostering a more robust economic environment that attracts foreign investment is crucial for long-term stability.
Time.news Editor: Powerful recommendations! Thank you once again, Dr. Hassan, for sharing your expertise on this pressing issue. It seems there’s a lot at stake for Iraq’s economic future.
Dr. Layla Hassan: Thank you for having me. It is indeed a critical moment for Iraq, and with the right policies, there is potential for significant improvement.