Economist Mokhtar Al-Jadid said that there are several reasons why citizens prefer using the paper dinar over the electronic dinar, stressing that this behavior affects exchange rates and the ease of financial transactions.
Al-Jadid explained that the price of the dollar against the electronic dinar is often higher than the exchange rate against the paper dinar. This is because converting paper dinars to dollars in banks is easier than converting with electronic dinars, as banks require cash for letters of credit and personal purposes.
He added that the movement of electronic dinars between accounts may incur an additional cost, while there is no cost for the movement of paper dinars from hand to hand. Additionally, paper currency is more widely available for use than electronic currency.
Al-Jadid pointed out that solutions are possible to address this problem, emphasizing the need to provide sufficient freedom in using bank balances even when cash liquidity is unavailable, which would contribute to alleviating the financial crisis and improving the use of funds in the local economy.