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Fri Sep 13, 2019 11:53 am
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Article: "For economic reforms and upgrading of banking institutions" Quote: "For the success of this linkage, administrative restrictions have been applied to the external transfer of goods, services and capital movement. Thus, it followed conservative monetary and financial policies that kept the stability of the Iraqi dinar stabilized by the Central Bank at $ 3.2 per dinar." ...this is great news.. If they want to get those 3 zero notes off the streets, 3.22 would certainly do the job...the dollar would be non-existent in no time.
- GURU HUNTER
- Posts : 2881
Join date : 2015-04-20
Too bad that these Gurus don't post the links to the article that they are quoting from so that folks can see just how bad they they are misleading everyone with their one-liner snippets...
For economic reforms and upgrading of banking institutions
نهاد شكر الحديثي
Before the introduction of the budget for 2018 to the House of Representatives for approval next month, announced the financial adviser to the Prime Minister the appearance of Mohammed Saleh, but the lines of the paragraphs have emerged for the public, which includes the continuing austerity of the country as a result of low oil prices and the requirements of war on the daisy, Prime Minister Haider Abadi to reduce the operational expenses of the three presidencies and ministries and non-linked to the Ministry of minimum levels to ensure the insurance of basic expenses, although the spokesman for the Presidency of the Council of Ministers confirmed that the customs revenues amounted to more than 685 billion dinars during the months The vessels of the past, but the Governor of the Central Bank of Iraq on the Keywords at dawn on Monday, "a bomb" heavy-caliber when he said that available cash is not available, criticizing the phenomenon of "compactness".
The financial adviser to the Prime Minister, the appearance of Mohammed Saleh, said that the budget for the year 2018 is in the semi-final preparation, and will be presented to the Council of Ministers next month according to constitutional times.
Saleh said that "the budget of 2018 tends to maximize non-oil resources whenever possible, and the direction of the state is to encourage employment through the private sector and develop programs to lend young people soft loans to enable them to engage in the labor market." Some details of the budget can be identified through the talk of a member of the Finance Committee MP Mahasen Hamdoun when she said that the government is continuing the policy of austerity because the financial crisis is continuing until next year.
With the imminent submission of the budget to the House of Representatives for approval, the Prime Minister Haider Abadi advanced cadres in the Ministry of Finance to conduct a careful review of the proposal for the federal budget for the year 2018.
Abadi stressed the discussion of the budget of 2018 and achieve further reduction of the operational expenses of the three presidencies and ministries and non-linked to the Ministry of minimum levels to ensure the insurance of basic expenses, primarily salaries and wages for all employees in the state, pensions, salaries and other wages, Ration card, and the maintenance of the requirements of security, defense and medicine. "
He stressed that "international and national obligations must be secured in the payment of loan dues and benefits, and continue to secure bonds to pay the dues of contractors." He also urged "to increase non-oil revenues by activating various activities and increasing productivity, Its role in improving economic performance. "
For his part, a spokesman for the Prime Minister Saad al-Hadithi that customs revenues amounted to more than 685 billion dinars during the past eight months, stressing the reduction of the level of government spending to about half.
He added that "the government exceeded the most difficult economic challenges faced by Iraq after there were fears of the government's inability to provide financial cover to ensure salaries and secure the necessary financial allocations to Iraqi forces and other sectors," adding that "customs revenues increased during the last eight months of this year only To reach more than 685 billion dinars. "
Despite the revenues available from the customs only, but the Central Bank of Iraq announced on Monday that the available cash is not available, pointing to plans to attract money and pumped into the banking system. "Stagnation is a problem and a source of concern for many countries, especially after the latest technological developments and the subsequent achievements and huge savings in the incomes of the elements of production," the bank's governor said.
It is noteworthy that the term "compactness" means holding the money and imprisoning it from circulation. It may be the hoarding of burying money or keeping it in the boxes inside the house and not taking it out to trade in the money and capital markets.
If Iraqi Prime Minister Haidar al-Abadi insisted on implementing radical reforms to control financial waste, fight corruption and prosecute corrupt people, and put an end to unjustifiable government spending, according to modern bases, to ensure investment of resources and diversify sources of income, instead of relying on oil, Of the annual budget of the state, his government must start a radical reform in the banking sector, so that the banking institutions to work to find an effective sector does not allow money laundering and terrorism financing, said the governor of the Central Bank Ali Alalak, who said that work is continuing to upgrade the Through its strategy to transform it into an institution operating within the framework of the developed central banks, and to shift from achieving traditional objectives to development goals that achieve financial stability and support the march of this sector to be a sound and real locomotive for the national economy in the reconstruction phase. Expected.
There are also 60 financial companies operating in the currency market, financial investment, transfers, bonds and smart cards, of which 10 companies are under construction, a large number, but this sector suffers structural distortions, including that government banks control about 90 percent of its assets, leaving about Only nine percent of private banks, with their diversity of local, Islamic, Arab and foreign trade, complain of the banks' restrictions on the banks that are biased to their banks in financial activity. One of the most difficult difficulties faced by most banks lies in their inability to recover loans from debtors. In many cases, even if the Bank has obtained a judicial decision to sell collateral, it is impossible to recover, for reasons of security and social pressure.
In spite of the large number of banks in Iraq, the number is not consistent with the population, and highlights the departure of the Iraqi people from dealing with banks, the population is estimated at 37 million people, of whom more than 80 percent do not have bank accounts, and there are 900 banking branches geographically located in Provincial capitals and some major cities.
The data indicate that one branch serves about 41 thousand people in Iraq, compared to Lebanon, where each branch of four thousand people, and therefore some studies estimated that about 73 percent of the cash mass away from the banking cycle, reflecting popular distrust of the work of banks. Some Iraqi economists are calling on the government to raise the Iraqi dinar exchange rate against the dollar so that its purchasing power rises and confidence grows as it represents the sovereignty of Iraq, as they demand the need to stop the dollarization of the economy by preventing internal transactions and making local transactions limited to the use of the Iraqi dinar only. It should be noted that 70 percent of the currency in circulation was covered with gold and foreign currencies until 1981, and the remaining Iraqi government bonds (currency law). Iraq was then applying the system of remnants of the gold base.
To maintain the lid, successive governments have been linking their fiscal policy, especially current and investment spending, to the balance of payments situation, the latter being determined by government revenues from oil exports.
For the success of this linkage, administrative restrictions have been applied to the external transfer of goods, services and capital movement. Thus, it followed conservative monetary and financial policies that kept the stability of the Iraqi dinar stabilized by the Central Bank at $ 3.2 per dinar. The commitment to the dinar cap gave ease to the monetary authority in the exercise of its tasks, as it was the sole concern to maintain the stability of the currency, but this was achieved at the expense of economic development, Spending on them enough for fear that the increase in spending will affect the stability of the currency.
The Arab and foreign banks suffer from problems and complications in their work inside Iraq. They complain that the Central Bank has not taken any procedural decisions related to the promotion of comprehensive banking and solving the problem of the restrictions related to the guarantees required in exchange for granting loans and committing them to increase their capital.
Finally, a problem has emerged regarding the banks operating in Erbil and Sulaymaniyah, whose work has been affected by the separation of the Central Bank of Iraq from the Bank's headquarters in Baghdad. These banks have been officially informed that the two branches have become linked to the Ministry of Finance in the Kurdistan Region. The financial and economic crisis plaguing Iraq due to the war on terror, the decline in oil prices and the economic recession, as well as the security instability, the situation of some banks faltered, and others complained of liquidity crisis, and the most recent violations of their lack of compliance Which led the Central Bank to prepare a study on the reality of public and private banks in preparation for re-evaluation and classification, with the participation of the Association of Iraqi banks, while at the same time the Central Bank placed his hand on four commercial banks for committing irregularities in their financial policies and not raise their capital according to the law, He also decided to liquidate «bank The Federal Court of Cassation approved the decision to imprison his owner and director for 10 years for embezzling more than 310 billion dinars (250 million dollars) from the Rafidain government, in one of the largest cases of embezzlement, noting that some businessmen and businessmen The mismanagement of the banking sector to the control of financial men, which contributed to the exploitation of funds deposited by some bank managers to invest their own, in violation of the law, and held the central government responsible for the deterioration of the economic situation of lack of planning and organization. For more than four years, officials in Iraq talk about a project for monetary reform through which the exchange rate of the Iraqi currency against the dollar so that the new dinar is equal to 1.2 dinars to the dollar instead of 1,200.
But the move was postponed until a later time because of the exit of some areas of Iraq from the control of the government after the occupation «urged» them. Military operations began to recover these areas, which still exist. The Government is expected to return to the same project after the end of military operations.
If monetary reform is successful, there is no longer a need to use the dollar in local transactions. The latter occurred after the completion of daily transactions difficult with the arrival of the value of one dollar to thousands of dinars, which made individuals resort to deal in dollars instead of dinar, especially in large transactions and the hoarding of the currency. Therefore, it is not possible to cancel the "dollarization" of the Iraqi economy by administrative decision or by administrative orders from the monetary authority, but the phenomenon will gradually disappear because of the reasons that led to it, ie after the monetary reform referred to above, because the dinar will then become an easy mode of trading and a store of value that avoids using the dollar
- GURU HUNTER
- Posts : 17157
Join date : 2015-02-19
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