Falah Thuwaini: Central ensure the independence to achieve its objectives 12/14
Falah Thuwaini: Central ensure the independence to achieve its objectives
BAGHDAD - Emad Emara
Monetary policy has seen in Iraq after the 2003 reforms included a broad legal personality and powers, objectives and tools.
Thus, the new monetary system witnessed several radical changes, which included components (monetary union, institutions, laws and legislation), in proportion to the new philosophy of the state.
As a result of the political transition was adopted based on the independence of the monetary authority monetary system, and thus ensured that the Iraqi central bank is independent. In this regard, economic expert Dr. said. Falah Thuwaini «morning»: was the beginning of these transformations in the role of monetary policy is the central bank reforms through the enactment of a new law, is Law No. 56 of 2004, which was the most important of which is to give the Central Bank of Iraq recipe independence and Paragraph (2) of Article (2), that the central bank is independent, including on his efforts in order to achieve Ohdavh.ola receive any instructions from any person or entity, including government agencies, except for the text stating to the contrary, as well as respect this independence. If shifts above and found its reflection to pursue a new alternative rather than cheap monetary policy that characterized the monetary policy in Iraq, which is an alternative to the rules fragmentary base (Taylor) in addition to the exchange, which are working together to respond to inflationary expectations and try to install the signal.
He added. Thuwaini: As a result of the changes referred to the philosophy of the government must be a reflection of her return to the monetary issuance and the extent of government benefit from it. And the fact that the central bank became independent and seeks to achieve his main goal represented to price stability and the stability of the financial system, in other words the government can not use the CBI Kmtabah for money.
There is a clear shift yield real monetary issuance values, having been in most of the negative values in the nineties have become positive in the majority of their values after 2003. This indicates that the monetary issuance mainly generated by the expansion in the base currency by the central bank as a result of increased reserves of currency Foreign.
He explained D.thwaina, this yield represents the central bank's income from cash issuance process, and the second aspect, the inflation tax continued high values as a result of continued high rates of inflation, and this is a tax on real cash to individuals budget and lasted until 2004, when inflation was down to 93, 30 million dinars after it reached a worth 20.223 million dinars in 2007 as a result of lower inflation value for the years mentioned.
He concluded d. Thuwaini that the increase in the base money growth, which is reflected on inflation the form of rates and as a result a return cash issue for the government is a swell caused by the tax that the money supply has become a variable externally for the monetary authority in spite of its independence, and the reason is the rentier characteristic that the advantage of the Iraqi economy, and its dependence on resource Mali single rate of 90 percent, its crude oil revenues, which the state treasury intervention in foreign currency government is working on the Iraqi dinar replaced delivered by the central bank that issues of Maakablha Currency.