Economic conditions threaten the security and foreign exchange reserves in Iraq 9/10
Economic conditions threaten the security and foreign exchange reserves in Iraq
9/10/2015 0 Comments
Still the impact of falling oil prices and the war against the state regulation "Daash", cast a shadow over Iraq, The second largest oil producer in «Organization of Petroleum Exporting Countries» (OPEC), which led to a significant decline in foreign exchange reserves at the central Iraq. The decline in oil revenues to decline in the country's foreign exchange reserves to about $ 60 billion, enough to cover the needs of imports in about 18 months, according to a statement of the Central Bank.
The governor of the Central Bank on the Keywords The low-denominated expenses dollar also eased demand for foreign currency, pointing out that «precautions level in Iraq comfortable», pointing out that the reserves are decreasing month but «not significantly». Show a prospectus for the issuance of an international sovereign bonds that activity economic in Iraq shrank 6.7 percent in the first quarter of the year compared with the same period of last year. With respect to the year 2015, most of the economic activity in the areas controlled by the organization "Daash" in the north and west of the country for more than a year. In a report to the International Monetary Fund, these factors led to the reduction of international reserves, which fell to $ 66 billion at the end of the year 2014 78 billion at the end of 2013. He played the central bank down concerns, which says that the continued downward pressure the Iraqi dinar, which sells for «central bank» for banks and dealers who obtained licenses at a price fixed in 1166 dinars to the dollar.
In the framework of efforts to help plug the budget deficit, shopping Baghdad first to issue international bonds in nine years in Europe and the United States this week.
He said «relationships» that the issuance of bonds in international markets would help in the reintegration of Iraq, the global financial system after years of wars and sanctions.
The local currency plunged to about 1,400 dinars to the dollar in the parallel market in mid-June of 1228 before last week. Said Mtaamlan The price reached today 1218 dinars to the dollar.
The government hopes to raise up to six billion dollars in a series of bond issues of the dollar, but «Keywords» said that the first phase will be to collect two billion dollars.
Also plans Baghdad to a local bond issue worth five billions of dollars starting from the last quarter of the year.
He added that Iraq also needs to reform its banks through restructuring and privatization of the largest state-owned banks, «Iraq» and «rational».
And he said that «this is the change that the president could lead to change the entire sector. These two banks dominate about 80% and 90% of the entire sector », pointing out that foreign Massarva may take possession of shares in the two banks in two years or three.
According to the law, can not «the Iraqi Central» lend to the Ministry of Finance, but Keywords said that the bank injected liquidity into the banking system through the purchase of Treasury bills and bonds by up to five trillion Iraqi dinars (4.38 billion dollars) this year.
He was the Iraqi Central Bank, greater funding for lending programs in the country process, pertaining to the financing of industrial and agricultural sectors, housing and support small and medium enterprises as well as revitalize the Iraqi economy.
The bank said in a statement, that the first lending programs for financing industrial and agricultural sectors and housing at $ 5 trillion Iraqi dinars lend through specialized banks (agricultural, industrial, real estate, and housing fund.).
Iraq is facing a financial crisis more than a year because of the collapse of oil prices in the month of September 2014, and the war on terrorism, representatives of the organization of the state "Daash" which controls large swathes of Iraqi territory, not to mention the resort to foreign currency from the Iraqi Central Bank reserves to cover government expenses , which led to the depletion of foreign reserves and make it in a vulnerable position is not in line with the construction of macroeconomic stability required, all these and other factors have contributed to the entry of the country into political and economic crisis and even social led to impose a new reality on the Iraqi state.