By: d. Sinan Shabibi Mohammad Reza * former central bank governor -
05/18/2013 - 5:35 pm | By: d. Sinan Shabibi Mohammad Reza * former central bank governor
Raised a lot of talk about the foreign currency auction hosted by the central bank that it involves a waste of public money, and I would like to make a few ideas on this subject.
1) There is no wastage of public money as a result of the auction process, فالمصارف submit Bdnanerha to the central bank and are converted into dollars using the foreign currency reserves, according to the exchange rate advertised, and therefore we have a process of exchange and swap purely monetary. In other words, we do not give a dollar for free, and thus we do not Nhdrh. The central bank paid 13 dinars for each dollar the converting. Central Bank is wasting public money if the dollar gave free as we mentioned or be dinar dollar swap preferential exchange rates.
It is also said that the central bank is wasting public money because it sells large quantities of the dollar. But the sale of these quantities is a response to the request of buyers who represent commercial banks.
It is very important to be meet all the demand for the dollar after the audit is put the bank in terms of banking irregularities, and after that the bank has submitted quotes that his request had been subjected to audit the Office of money laundering at the bank.
The interview each application is essential in monetary policy, but the demand which is not to meet him and إشباعه by the central bank will go to the market to satisfy his need to the dollar from another source, which will create the exchange rate last necessarily be higher than the central bank rate, and therefore we will be in front of the phenomenon multiple exchange rates at the central bank and the local market.
IF THE CBI BUYS THE DOLLAR FROM DIFFERENT BANKING INSTITUTIONS AT DIFFERENT RATES PER INSTITUTION, THIS CREATES THE "MULITPLE EXCHANGE RATE PHENOMENON" MR SHABIBI IS TALKING ABOUT IMO. YOU WOULD HAVE TO ADD EACH EXCHANGE RATE TO GET AN AVERAGE EXCHANGE RATE. IT IS PREFERRED TO BUY FROM ONE SOURCE IMO. ~ RED LILY ~
That سيخالف Central Bank Law (Article 3) and will hinder the economic decision-making and distorts the price level. The criteria for the International Monetary Fund, which Iraq is the first signatories to the Convention of saying that the difference between the two rates (the central bank rate and the market price) must not exceed 2%. At the present time, and under the new management, the difference between the two rates of nearly 8%.
AWWWWW SNAP!!! BETTER REMOVE THAT TURKI FROM THE CBI... HE is messing it all up!! ~ RED LILY ~
When the dollar bank sells it exercised monetary policy and not a commercial operation, Fbabie dollar pulls the dinar from circulation and relieve inflationary effects (the first goal of the central bank), which works on the rationalization of expenditure in general and lead to reduce wastage of public money.
The change in the exchange rate is not a waste of public money, and to satisfy the demand for the dollar is also not considered a waste of public money, and must be equal to the supply and demand to stabilize the price (the first goal of the central bank, as mentioned).
This market operations and our economy is an economy in transition to a market economy, and such openness is accompanied by fluctuations in supply and demand certainly affect the movement of cash. The important thing is that the market situation is returned to the state of stability.
I just mentioned that the difference between the exchange rate of the central bank and the market price under the current administration is about 8%. Bank did not indicate the reason for this difference, and we believe that the reason is economic sense to the failure of the bank to meet all demand, which leads to this disparity between the central bank rate and the market price, and this is contrary to Article III of the Law of the Central Bank.
This disparity must be addressed (note that it is on the rise), (GETTING WORSE and SOMETHING MUST BE DONE IMO ~ RED LILY ~ )has faced the old administration some disruption and volatility in the exchange rate in early 2012 as a result of strong demand for the dollar due to the U.S. withdrawal at the end of 2011 and regional circumstances, other than that the administration was able to restore stability in the third week of the month of September 2012, where the price of 1196 dinars to the dollar.
SHABIBI DEFENDS THE POLICY HE FOLLOWED TO MAINTAIN THE STABILITY OF THE DINAR ~ RED LILY ~
Deduce if it according to the principles and the law of the central bank there is not a waste of public money, Firstly, the central bank sold dollars to meet the dinar, and secondly that the bank in his work that meets the demand for the dollar and maintains the stability of the exchange rate and domestic pricesand provides a suitable environment to maintain public money and use it frequently used product, which promotes sustainable development and contribute to job creation, as shown in the article (3) of the Central Bank Act.
2) the central bank sells dollars to banks and sells to its customers for use in the importation of goods and services, and this is a business process and not a process which get cash out of the central bank, to come out after the dollar from the central bank. Therefore, this business process is not related to the central bank, but is related to uses different to the private sector that could be used dollar for medical purposes and tourism, or to buy some assets or may resort holder dollar to the so-called savings external causes of economic, security and political anticipation of improved conditions and investment environment even bring this savings in whole or in part to Iraq.
This means that the central bank should not be blamed if the import increased by a few of the amount granted, the central bank should not be held accountable for a business process. It is possible that the central bank held accountable if there is a defect in the exchange rate of the dollar against the dinar, ie the monetary process. The waste of public money as a result of a business process in spite of its importance does not fall within the work of the central bank.
3) The Central Bank shall provide a copy of the requests submitted to the conversion of the auction committee to the Department of combating money laundering and terrorist financing in the bank for detailed follow-up (which includes follow-up operations dubious) in spite of the bank concerned to give us the martyrdom about its operations free of money laundering.
If this circuit is that it must essentially be diagnosed and sequence of money laundering and financing of terrorism inside and outside Iraq can (according to the Money Laundering Act of 2004) to do so directly without reference to conservatism Bank, Vdaúrh money laundering retain the independence of its operations.
These subsequent follow-up, which is very important, do not obstruct determine the exchange rate and price stability in general. We have to remember, as we noted earlier, the domestic price stability is the first objective of the Central Bank in accordance with Article 3 of the Law on the Central Bank.
The auction committees receive a citation from the banks about the absence of money-laundering operations, but that should not impede the smooth flow of financial flows and exchange rate stability. The Department of money laundering, which received a copy of the auction requests directly is that you should scrutinize flows in terms of money laundering in detail.
It can be summed up what Ordnah in points (2) and (3) that the fate of foreign currency Badelha the central bank to meet the Iraqi dinar in the auction process, which ends its mission here, is to go through the commercial banks to finance the various types of imported goods and services and other purposes that we mentioned earlier. All requests for this conversion is given to money laundering department must follow up and determine the fate of foreign currency, especially suspicious ones and tell the security agencies directly.
4) It is important to show that there is no restriction in the current transfers of payments in accordance with Article VIII of the Convention on the International Monetary Fund, which Iraq was one of the first founders and first signatories to the Convention of 12.27.1945.
In addition, the freedom in remittances guaranteed notes of the financial and economic policies with the International Monetary Fund, which has been held and signed by the Minister of Finance and the Governor of the Central Bank. We would like to make it clear also that all restrictions have been removed, especially after the abolition of the Directorate of foreign exchange at the central bank in 2003.
Parliamentary source enslaves Shabibi trial in absentia
Created on Saturday, June 15 / June 2013 11:54. | |
Baghdad / Orr News
A source representative for completion of the investigation in a previous administration of the central bank, noting that the eight defendants only stay in the case of the staff of seven have been released on bail while still Associate Director, Office of money laundering being held have been referred to the specialized court, likely to issue a decision to release them for lack of evidence, it comes at a time announced for the economy and investment committee in the House of Representatives for intention تضييف the current governor Abdul Basit Turki to find out what has reached his steps in the way of reducing the price of the dollar.
A parliamentary source said, preferred not to be named to the sensitivity of the subject, that "the investigation into the charges against the previous administration of the central bank is nearing completion," noting that "the investigative authorities settled on eight employees accused in this case." He added that "seven were released on bail while still Fouzia Kadhim, which was hold the position of assistant general manager of the Anti-Money Laundering Office in the Central Bank was being held pending further investigation."
The source added that "the central bank governor Sinan al-Shabibi has completed the investigation into his case and has also referred to the specialized courts", but ruled that "conducted a trial in absentia because the current circumstances do not allow it."
The source pointed out that "preliminary information indicates that the trial assistant general manager of the Office of Anti-Money Laundering will be during a short period and that the charges against her is not merely a violation or misdemeanor simple and do not live up to the crime," likely to "be her release for lack of evidence available right and therefore it is not possible condemnation on according to what currently exists and will seek in court pleadings to reach out to strengthen the conviction decision to be taken, "but he did not deny that he" may appear there are new facts in the trial phase and the volatility of all scales. "
Dr. Shabibi: auction of foreign currency. Central Bank crisis or crisis economy?
Since the change of the former regime in 2003 Iraq adopted a market economy which is reflected in international economic relations and make it focus on the role of the private sector in development, and confirmed the Constitution
The liberalization of financial flows contribute to economic growth, but it requires tighter control on the phenomenon of money laundering because of the inclusion of economic freedom financial and banking sector.
Auction currency is a foreign exchange market where demand for the currency supply and then made up the exchange rate. The exchange rate has remained stable for a long time because of our success in increasing volume of foreign currency to provide flexibility and confidence in an interview request.
The process of determining the exchange rate must be held smoothly because the blocking will affect demand for the dollar and demand to be obstruction will satisfy the market saturation will be higher exchange rate so it gets confusion in the market and the introduction of multiple exchange rates, which hamper the economic decision-making and implementation.
Not all banks the task of the demand side of the BA constituent acts deposit accounts at the Central Bank used for the purposes of monetary policy and foreign exchange auction. These accounts may be checked in the same banks that have within their administrative department to check money laundering.
Although the auction is used mostly by dealers import through business conformance must stress that a monetary policy that draws Iraqi dinar from the market, which reduces the pressure of liquidity and its impact on inflation.
The previous Administration has confirmed to the Central Bank in its statement issued on 22/5/2012 and can be reviewed through the Central Bank of Iraq. The use of foreign currency to import also leads to reduced inflationary pressures, but this is within policy.
IMO, Shabibi is saying they should only be using the USD to pay the BILLS for the COUNTRY ex.. Imports/exports, contractors etc.. They should not be exchanging dinar for the the dollar just for the sake of exchange. This saturates the market with USD. So the new policy suppose to narrow the clientele on who will be exchanging and for what purpose the exchange is taking place. IMHO ~ RED LILY
The process of buying foreign currency as we are purely monetary process and under the instructions of the Executive Committee of the buying and selling of foreign currency or auction Commission. This includes checking the documents and whether the Bank has banking problems related to capital or monetary policy rate set by the Bank.
And the Central Bank gives USD because it receives JD suit (we before cash process) Although the dollar might be used commercially (after coming out of the Central Bank) and the numbers of final import to the statistical authorities by the Ministry of Commerce and the customs services. Therefore, you should not blame the Bank because he did not follow the import process. In other words, not only must the Central Bank believes that public money is not wasted years there was no import.
Seems like there should be a balance sheet of sorts showing the offset of exchange to the payment on imports. These should zero each other out. IMO ~RED LILY~
It is likely not to control the currency market for the period you get disparity between official rate and market rate. This is due to many factors of supply and demand, some crises may occur that generate an increase in demand for the dollar as a safe and secure.
It is also possible to provide banks with Central Bank dollar, but it is not possible to deliver this to the ultimate beneficiary (DEBTOR) of the dollar before banks the flexibility required. All of these things hinder the smooth flow of foreign currency and get market price rises. These phenomena impede the flow of the market and often occur in developing countries, especially including Iraq.
Fluctuation in the exchange rate began during the previous administration at the beginning of the year 2012, as a result of external circumstances characterized by severity, are those related to events in Syria and Iran, and coincided with the withdrawal of u.s. troops from Iraq. These circumstances have led to a significant increase in demand for dollars, which raised its price in the market. This has led to the former administration to restrict the offer in response to these changes, which led to heightened volatility.
In September 2012 resulting from intensive discussions apply circular issued on 1/10/2012 leading to exchange rate stability since edit procedures for the dollar. When the new administration took over the responsibility of the Bank in October 2012 the exchange rate stabilized for a limited period but started from the end of 2012 oscillation until present day.
The Central Bank has announced that it will be to use documentary credits to finance trade transactions. Although documentary credits are a good method of trade financing, this purely commercial issue.
The Central Bank must finance all debtor side of balance of payments and trade balance only.
Using the LINE OF CREDIT for commercial use only to pay debtors should definitely cut down on the IQD/USD exchange as well as the saturation of USD in their market. It will solve a lot of problems in this area If managed CORRECTLY. Only IMO ~RED LILY~
Events not covered by documentary letters of credit would go to the market, it creates another price. And documentary credits also include all financial flows, for example, there is nothing to prevent Iraq from the overseas savings while waiting for improved conditions at home, returning the funds to invest in Iraq.
We must look to the Central Bank as a commercial enterprise.
As stated earlier, the auction currency is the monetary policy. The Central Bank stressed that the World Bank should work to stabilize domestic prices and the exchange rate, and if this goal required to achieve increased money supply, why accuse the Central Bank that he wasted public money?
Why the Central Bank tried to apply its law which provides for immunity from legal proceedings (article 23)?
Many central banks in the world have this immunity. Why should the Central Bank be held accountable for the business process being outside even though cash and cash currency Foundation?
Uh oooo. Dr. SHABIBI asking the WORLD BANK why?? Get em good doctor. ~RED LILY~
The primary accomplishment of the Central Bank is the stability of prices by dragging the dinar by selling the dollar. This is part of monetary policy as part of trade policy (outside the Central Bank) is to use dollar commodity import and supply which neutralize inflation significantly.
But if we leave aside the cash side and our perception that the private sector imports is purely commercial and finance such imports come from foreign currency available to the Government (Development Fund for Iraq, for example) and not from the reserves of the Central Bank, the Central Bank’s fundamental interest in reducing inflation, which can play an important role in trade policy.
The basic principle by which the Central Bank operates is that demand and do not know whether the Government will work with the same standard and what is the impact on the exchange rate in this case.
As SHABIBI has stated before, THE GOVERNMENT NEEDS TO STAY OUT OF CBI BUSINESS!! ~RED LILY~
The staff at currency auction committees are eager to have foreign currency flows smoothly from the demand side to ensure stability in the exchange rate and domestic prices, and that is the objective of the World Bank.
That these employees did not waste public money they received TD vs dollars that gave and they fully met the demand on the dollar depending on the requirements of monetary policy, as they will be if they do not satisfy the demand of the market at a higher price and this would contravene the principle of stability of the currency and the Central Bank law.
We must stress here that the objective of the Central Bank is the stability of prices including the exchange rate, the Central Bank is not the goal of trade financing. In other words, that the Central Bank could change its policy if the exchange rate but it will not change its policy of necessity if trade this installation sets with other commercial or financial policies.
Currency auction committees must pass orders for the dollar because the prerequisite in the process of Exchange have been achieved and is the dinar, and obstruct the exchanges here will lead to the instability of the price or more than the rate in the money market. This economic and legal violation does not want any member of the Central Bank.
Definitely making a statement here about the charges that were brought against him and his staff. ~RED LILY~
The work of the Commission on the auction currency must be characterized by speed and accuracy, the Committee scrutinizes citations from banks about lack of money laundering operations, but this audit should not amount to obstruction even unimpaired exchange rate.
The Commission also makes sure that enough banks to exchange the Dinaric dollar conversion is financed from the bank account of the Central Bank. For the Central Bank gives USD for dinar, the issue is not only a cash swap.
Stages of the process of obtaining foreign currency begin to submit an individual application for import or for other purposes to commercial bank which demand detailed checks,. But not supposed to verify the Central Bank (an institution) that would give foreign currency details at the commercial banks.
The Central Bank in this case is like a wholesaler. It checks the Bank irregularities, receives the citation on that bank money laundering. Most of all to give the dinar-dollar receives a uniform exchange rate. If there are lists of business with demand they should check on the level of commercial bank because it offered. In any case, the commercial bank go data copy to the money laundering unit at the Central Bank to continue.
And about the relationship of the commercial banks at the Central Bank, article 40 of the law on the Central Bank to supervise banks, which includes vacation and supervise banks and issuing instructions on its work. It is not the Central Bank’s banking operations at the level of individual lending operations.
The Central Bank’s relationship with banks is through banking and credit service which tracks banking and its conformity with the requirements of monetary policy, and through the currency auction where the Bank receives a transfer request and quote about that Bank’s operations of money laundering through money laundering reporting service in the Bank for subsequent follow-up and money-laundering operations at the level of individual process.
All operations within the market or currency auction and its role in determining the exchange rate go copy them directly to the money laundering reporting service in the Bank to do more checking of suspicious operations. Follow-up is carried out within and outside Iraq and with counterparts in various countries. The service is competent to pursue money laundering and particularly suspicious operations.
Currency auction committees at the Central Bank is not concerned with issues of money-laundering, although it received citations that bank money laundering as we mentioned earlier, responsible for monitoring money laundering reporting service at the Central Bank, they receive the auction data from the outset.
To check money laundering in the banking circles of money laundering in banks and money laundering reporting Directorate Central Bank and it is not the duty of the auction committees must pass requests for foreign currency quickly and smoothly the cash market is very sensitive to any delays in the flow of information to affect the exchange rate. That money-laundering Directorate receives lists of requests for conversion at the same time that it receives these lists and auction committees have sufficient time to proceed and news. Banks must tell the Department reporting directly from the Central Bank of any suspicious transaction, in accordance with article 17 of the law on money laundering, reporting service BA news security actors.
Attempts to detect money laundering requiring banks to identify sources of TD to be deposited. It quickly converts the dinar to the dollar, and the dollar has for purchasing goods and services everywhere in the world. So the question of martyrdom on money laundering by banks are gaining importance. The judgement in the case of money-laundering derived from citations and checking the money laundering reporting unit in the Central Bank.
Department of money laundering that could raise doubts about all processes and are able to address directly the banks there is a circle of anti-money laundering in banks.
Under article 12, paragraph 4, of the anti-money laundering Act of 2004 on it (if the money laundering Office complained that the transaction reasonably made or initiated involve funds derived from illegal activities or money laundering or funds intended to be used in the financing of crime or funds owned by the criminal organization the right to dispose, or finance terrorists, or treatment intended for any other unlawful purpose, the service immediately Notify the competent investigating and prosecuting authority.) . This means that the Office of the reporting does not necessarily refer to the Governor of the Central Bank or ask permission from him or from the Bank to notify the competent investigating and prosecuting authority. The reporting service remained operational independence.
The basic properties that must be available in the money market to enter bank or auction currency is in addition to his ownership of Iraqi dinars sufficiently into account at the Central Bank, but also in the development of disease met its obligations to the Central Bank and deposit free of money laundering. And follow-up process of money laundering takes place after the end of the auction process it should not affect the process of determining the exchange rate. to check money laundering is the process of validation and security while the auction process as purely monetary policy.
The auction currency available to all banks that have not committed offenses. The belief was popularized during the campaign against the Central Bank since the end of last year that the Bank sells foreign exchange to certain banks. the auction is available for both banks and currency auction data do not indicate that the sale is for certain banks, most banks enter the currency auction and unevenly. The process of selling foreign currency are determined when the demand of commercial bank or the buyer and his response by the Central Bank or the seller. This issue will depend on market conditions and the needs of the Bank in different fields as it is possible to request certain banks foreign currency or required by all banks. It is also possible to enter the auction Bank one or both banks, but it is possible in theory but no bank auction enters. It all depends on the activities of banks and market conditions. The Central Bank does not choose the Bank that sold him. Some banks buy than others because they are more active than others and not because the Central Bank favours. Of course, as we have all gotten the banks operations in terms of banking irregularities in terms of money laundering.
The Central Bank now sells six days a week, while the previous Administration sells five days and never did not adopt the system six days a week. Financial markets (in particular financial and monetary operations of the Central Bank) not work during holidays and when there is a working day in the banks. Despite that, in many States you may find buying and selling currencies by cashier in holiday but however expanded operations are limited and do not take the form of an orderly market.
The previous administration was able to stabilize exchange rates before you leave work in mid-October of last year, at least one month. It must be emphasized here that successful monetary policy is measured by maintaining price stability, not by reducing the amount of sale, especially if a sufficient reserve.
I assumed the present leadership of the World Bank, through the Iraqi TV in March, daily currency auction sales must not exceed $ 100 million, but the sale at present average double that amount, the new Administration said that this increase in the conversion was the smuggling of funds, washed or does it have it and what actions have been taken in this respect and what is the opinion of money laundering reporting service in the Bank Governor and talk do you follow?
This and we would like to note here that the report does not raise any situation or issue where suspicion of laundering or terrorist financing to the Bank but the first Deputy Speaker of the House of representatives in the parliamentary debate on 8/11/2012 this reporting service was complaining about ((terrible)) for money laundering, the Central Bank.
That sale now started approaching the method followed by the previous administration and is moving toward satisfying the market but the market price is still higher than the bank rate and this means that the present Administration still restrict or follow restrictive measures although oust reserve concern. The price is determined by demand-supply meeting point. The principles of economics. These developments indicate that the Central Bank’s goal is to sell less not that works on exchange rate stability.
The economic stability as a result of exchange rate stability and reducing inflation in General is an essential process for the development and implementation of projects, especially those that need imported users.
The problem now is the problem of the Iraqi economy, policies and resources are not a problem. The country now suffers from a lack of political stability and security which impede development and decision-making, we have now also suffer from a lack of economic stability as a result of the instability of the Exchange.
That would affect confidence in dinars, which started less (Please be temporally) which explains the great desire to acquire dollar now when the public as a commodity. The lack of stability of domestic and regional conditions, in turn, encourages greater demand for the dollar. There is no doubt that this is an important factor in the fluctuation of the dollar but that the Central Bank was selling dollars, we are restricted to high demand and restricted view. You must recover the stability so that policy makers make decisions especially with regard to the external sector, which is particularly important in the Iraqi economy.
Auction currency problem is really the problem of the economy, the Central Bank is not a problem.
Should the Central Bank provides an enabling environment for the development of the most important elements of this environment is exchange rate stability. But taking advantage of this environment depends on the efficiency of the real economy, particularly its susceptibility to develop exports of non-oil sector and formulate appropriate policies of the Government and its organs. If the real economy is suffering from low productivity of the private sector to import nearly everything and exchange rate dinar will decrease but the large reserves can import finance and balance of payments gap and keep the dinar from falling and this is what happens in the auction of foreign currency. Better to keep our dinar through production and create non-oil export capabilities, it is the duty of the productive sectors (governmental and private sector). Must develop the non-oil export and scalability if gradually even less reliance on oil revenues and foreign currency auction, based on oil.
Not supposed to blame the Central Bank for development has been funded, and there seems to be from the Government and some members of the House who wants to access in this way.
BAM!!! TAKE THAT MALIKI!! ~ RED LILY ~
The Central Bank must be blamed if it does not provide or participate in providing the appropriate environment for development by providing a stable financial and economic environment. The instability of the exchange rate is one of the essential features of the political instability and disrupt or delay the economic decision-making and implementation.
Have you ever asked themselves why Government depart and Iraq are humans the production elements in the country? If there is an appropriate political and economic circumstances were these items will leave Iraq?
If these production elements in Iraq would be the easiest solution to the problem of the exchange rate that will remain in Iraq in an investment environment and productivity.
This is the environment that must be available and this is the responsibility of the Government. That auction deals with economic conditions in which many changes, especially with regard to the financial sector.
IMO, SHABIBI IS BASICALLY SAYING HERE THAT THE GOVERNMENT SHOULD DO "THEIR JOB" BY MAKING IRAQ A MORE STABLE INVESTMENT 'ENVIRONMENT' BY PASSING APPLICABLE LAWS THAT ARE NEEDED.. A MORE STABLE INVESTMENT ENVIRONMENT WOULD ATTRACT MORE FOREIGN INVESTORS AND HELP DIVERSIFY THIER NATIONAL PRODUCT THEREBY INCREASING PRODUCTIVITY AS A NATION. JUST SAYIN. ~ RED LILY ~
In addition, Iraq is undergoing a period of transition, there is first the transition towards market economy and has the text of the Constitution on the importance of the private sector within it. There is also a move to an economy of peace from war and siege economy (which has been with us for a long time) which is a development of great importance. There is also integration with the international community, which must settle things with him as most of Iraq’s problems with international dimensions. This includes solving the debt problem and the normalization of economic relations with the international community and international economic and financial institutions. To deal with the international community, which acquired great importance in our development requires significant administrative capacities and substantial international support, demonstrated the importance of this during our negotiations with the Paris Club and the monetary and financial negotiations with international institutions, especially the International Monetary Fund.
Revealed the Iraqi Central Bank Governor Dr Sinan Al-Shabibi, in a dialogue with the 'weekly' to restructure the national currency, starting delete the zeros from the dinar, a very important step, because they relate to the direct purchasing power and inflation. Shabibi stressed that an independent central bank, which is directly responsible for monetary policy, exchange rates and foreign reserves management and regulation of the banking sector.
These details of the interview:
■ decision of the Iraqi cabinet directed to the Central Bank of Iraq to transmit monetary policy adopted to the government for approval and approval, raising fears the banking sector the likelihood of government intervention in its affairs. What is your comment on this?
- There is no doubt that monetary policy linked to the Central Bank, who are held accountable by the House of Representatives, and the independence of the central bank does not mean that he has an attitude of the government which can not afford an explanation of a negative in terms of dealing with the many important issues, and I think that this independence is in favor of the government because it gives the Iraqi Central is a great opportunity for the adoption of policies that address inflation, and if they have been hampered these policies will have a negative impact on state projects. I also think that the principle upon which the independence of the CBI is that the party that holds the printing money is supposed to be independent of the other parties, which holds spending on state projects, I mean the executive branch, otherwise it would be in the capacity of recent and whenever needed to money, to resort to Central reprint, which leads to the increase in inflation or the amount printed. So I see the need for the independence of the central and central This independence gives the possibility of stabilizing policies, but it certainly requires coordination with the government.
■ Is there nothing to suggest a link between the CBI and the executive authority in the Constitution?
- The Constitution confirms that the CBI is responsible to the House of Representatives in the implementation of monetary policies, and the close relationship between the CBI and the House of Representatives are in favor of the executive branch that need economic stability for which it works Central. And economic stability is the stability of the currency and prices and inflation, and on this occasion we can talk about the need to develop a strategy for the management of financial and monetary policies as it provides an opportunity to promote economic performance better without restrictions shackle workers in these vital sectors and prevent their movement.
Deletion of zeros
■ project to delete the zeros from the local currency How seen 'CBI' What is its significance?
- At the outset say that the project to delete the zeros of the new Iraqi dinar, which is expected to see the light on the first of January of next year, is one of the strategic functions of a central, because of its importance in alleviating a lot of fuss facing economic sectors and wide, in the forefront of the budget and commodity trading daily. At the occasion say that the zeros added to the Iraqi currency in the early eighties formed a mass of large cash amounted to 28.5 trillion Iraqi dinars, or nearly five trillion paper money, so it was the Iraqi Central line in his new project with a monetary policy which is based on the structure and reduce the size of the currency, especially that Iraq is heading toward the stage of a free economy. As has been initialized supplies required to replace the Iraqi currency and took the Iraqi central accounting measures in order to stabilize the dinar exchange rate that is expected to facilitate the new dinar cash transactions affected by variation in the currency difference.
■ What are the expected reactions on the move?
- The new dinar project is based, and the CBI, which is the monetary authority responsible project is to delete the zeros is an essential step because this deletion represents a restructuring of the national currency and the initiation of a new currency system.
■ Does the international donor institutions to support this move?
- Yes, that supports the restructuring of institutions to facilitate the currency deal.
■ on the other hand, ask about the importance of cash reserves in relation to Iraq, which is moving to strengthen its currency?
- For the first time in the history of Iraq, rising foreign exchange reserves of foreign currency to $ 60 billion There is no doubt that the increase in reserves of the Iraqi Central This reinforces confidence in local currency, and increases the stability, something that helped the CBI to take important steps was the most prominent of trade finance sector sector and maintaining market stability and curb inflation. On this occasion, I would say that inflation is no longer of concern to us and it is under control and within the policy of price stability. Hence, we can say that the cash reserve strong hard currency makes us able to curb inflation quickly, the CBI was constantly keen to work in the direction of reducing inflation through fiscal policy challenge of rising prices, which confuses the family income and adversely affect the price stability in the country .
■ experts argue the poor performance of Iraqi banks What are your steps to address this imbalance?
- CBI is keen constantly on the support of Iraqi banks, and is therefore a priority of his policy, which aspires to take the banking sector role in development and reconstruction, and the advancement of the country's economy, and I think that the decision to raise the capital of private banks to 250 billion dinars in 2013 would help to promote an important role for the sector expands from the Department of banking services, and we are studying proposals that will help to allow banks to expand circle of activity, in addition to its traditional, so it is ready to give long-term loans, because of their significant impact on the development of investment activity and the implementation of strategic projects.
■ Are there specific steps ninety to be achieved in this area?
- I think that there is a need to develop banking culture, and to the wider use of modern systems that facilitate the trading process and the interaction between banks and their affiliates, as well as with foreign banks, and we will work to improve this aspect widely.
■ What is the importance of the decision of the Iraqi Central pending patent application for the tax levels of foreign remittances to 50 thousand dollars for the expansion of banking activity?
- The decision falls within the framework of transfers and is compatible with personal tax reform so that it meets the ambitious market and private banks as part of the market. I believe that this decision will be on contract deals encouraging large commercial companies, especially since the purpose of settling accounts in tax converter conversion is not money but on the profits, and the implications of the decision useful for the balance of the market and sales. At the appropriate call to reconsider some of the tax laws that could create some sort of reassurance to the involved in tax Balthacb.
■ haunt economic and financial circles sometimes concerns due to the fluctuation of the Iraqi Central sales prices of the dollar?
- The strength of the Iraqi dinar strengthened size of reserves of the Central Bank of the hard currency of 60 billion dollars, and this makes the Iraqi dinar and one of the strongest currencies in the region, so I do not see a positive for any fears of rising inflation due to falling sales of the Central than the dollar, so that the bank has the possibility of being able to install large financial stability, and has more measures to increase stability in prices, rates and foreign currency savings.