Restore confidence in the banking sector contributes to the provision of liquidity

11/24/2015 0:00

BAGHDAD - the joy of pumice
Refer experts lack the cash economy in a market trading day to the weakness of individuals the confidence of the sector of the Iraqi banking, the impact of fiscal policy in the liquidity available in the market size through realized spending in the framework of the implementation of the general budget annually, calling for work to restore confidence in the sector It is important And caused the lack of financial revenue earned from the oil sector due to a global decline in prices, pressing the government spending, which led to monitor most of the revenues and operating budget for the provision of wages and salaries in return investment projects that promised one of the challenges that have affected the lack of cash in circulation monetary stopped.

The operational budget is estimated at next year's budget in 2016 by more than 83 trillion dinars, or about 80 percent of the support of the general budget revenues.

In this regard, said economic expert on behalf of Antoine: The «exacerbate the issue of lack of liquidity in the local market at present, has formed a burden on the citizens, as led to the failure of some banks to pay some depositors benefits they have to pay some companies salaries ».

He Antoine that one of the reasons for the lack of liquidity is the weakness of citizens and depositors and businesses in the banking system, which led to the withdrawal of nearly 60 percent of the cash confidence, in addition to the amounts of the dollar from banks and Aktnazha in homes for fear of lack of the bank's failure to repay the citizen benefits in times of need.

He added that this process has created a paralysis of economic life, what effect and in fact the Iraqi market and froze the activities of a large number of business processes and stop projects.

For his part, the economic expert Dr.. As Abdul Hadi that the issue of liquidity in the economy is one of the basic functions of banks in Central.

He said Abdul Hadi: «in order to sustain employment and economic activities must meet the commodity transactions that depend on available liquidity in the economy, where the central works to achieve balance between commodity and cash transactions to maintain price stability without cash transactions to be there is an increase or decrease liquidity ».

As he saw that one of the reasons for the low liquidity in circulation recently cash, lack of oil revenue that contributed to the decrease in government spending in the investment aspects, as well as private spending, as well as reservation individuals as a result of expectations of a pessimistic because of foggy statements for the future of the economy and the outlook is optimistic for high oil prices future.

As regards the framework of lending, Vnoh expert that when the government increases the lending operations, they crowd out the private sector in the sense make the existing liquidity in banks a little leads to the inability of the private sector to obtain sufficient funds to complete its work and sustain investment projects.

In terms of solutions necessary that limit the lack of liquidity and bring it back to the banks in order to circulation and completion of commercial and investment operations to provide cash, experts Antoine Abdul Hadi stressed the need to reassure citizens and individuals by financial stakeholders, to return the money chunky in homes to banks.

He described Antoine this kind of compactness b { compactness savings », urging to turn it into a« investment savings »by returning the amounts by individuals to banks and the benefits of a rewarding and guaranteed by financial authorities legislation guarantee deposits law, what drives the Iraqi market and the elimination of unemployment and restore trade and investment activity of the banks.

He stressed the need to restore confidence in the system banking, and private banking institutions efficiently and seriously managed, pointing out that such large amounts of cash chunky could be loans to the government to borrow from international organizations, rather than the conditions of work and the experiences of some Arab countries, what makes Iraq has made ​​reinvigorating the market.

Another solution to this problem, Antoine importance explained reduce cash circulation in the market by treating cash cards avoids citizen many problems Kaltlv and theft of cash categories, along with maintaining the liquidity in the other hand, Abdul Hadi called on the government to make way for larger the private sector on the subject of lending, and not on what Mzahmth available liquidity at the banks. Also he believed that the main dilemma is in the nature of the Iraqi banking business, especially as the banks cautious in lending to the private sector of the high risks in the Iraqi market, stressing the need to reform the banking sector to restore customer confidence in dealing with the banks, particularly private ones.

Between experts and economists that the application of these solutions to the problem of liquidity is the responsibility of the concerned authorities as well as the significant role played by the media spreading awareness in the community.