CBI: removal of zeros meant to boost currency policy

BAGHDAD / IraqiNews.com: The Central Bank of Iraq (CBI) described the removal of three inflation-generated zeros from Iraqi banknotes as a long-term strategy to improve its currency policy. “Dropping zeros from currency is a normal procedure by most central banks in countries that have gone through long periods of high inflation…,” according to a statement released by the national media center, quoting a CBI source as saying. Commenting on the monetary policy to raise the value of the Iraqi dinar against the dollar, the source said that this policy will not do any good to Iraq, which he said has a surplus in its balance of payments. A recent proposal to drop three inflation-generated zeros from Iraqi banknotes has sparked heated controversy in Iraqi economic circles, with some experts arguing that the process will not boost the economy or the country’s monetary mechanism. Several economic experts argued that dropping zeros from inflated currency is a purely administrative process that will have no influence over the Iraqi economy. SS (P) 7