Governor of the Central Bank of Iraq Responding to statements that relate to monetary policy

Governor of the Central Bank of Iraq Responding to statements that relate to monetary policy

It was noted recently by some of the non-professionals, has launched remarks on monetary policy and the work of the Central Bank of Iraq, has been characterized by the majority of those statements fallacies and pessimism and Althbit, either because of the absence of an accurate understanding, intent is the objective, which stems from the
Different motives linked to the political reality and Almnaavat and interests.

The Central Bank's policy is well-established distance Baidaan debates and reactions to the statements, but that the volume of inaccuracies and confusion reached a level of stability and hurts the public Astaqraralsouk and damaging the reputation of Iraq externally and the consequent serious effects on financial transactions Iraq

And monetary and banking, which invites us to clarify some things and as follows:

1. The Central Bank is working on the application of parallel policy to maintain the overall stability of prices and curbing inflation as an objective basis and the task of President under the law of this bank, and at the same time working to maintain its reserves prevailing dinar and high coverage in spite of the prevailing and known to everybody economic conditions , which is thus kept his family and keep
The purchasing power of the Iraqi dinar.

And waste of concerns about the value of the dinar and international reserves refer to the following:

(a) the facts that with the decline of dollar resources, due to lower oil prices, the reserves are still enough level, but much higher and according to international criteria, namely: the standard of the local currency cover the equivalent of foreign currency , and the ability of Reserves to cover imports for a period of 6 months.

(B) The International Monetary Fund predicted at the beginning of 2015 and the arrival of the reserve to 40 billion
Dollars at the end of the year, we have explained at the time that the reserve will be up to $ 60 billion at the end of that year and months after the beginning of the year amended Fund forecast.

Estimated reserve of 50 billion dollars, and still we had expected, according to the data and indicators We have the actual reserve - as we expected - it will be up to the 60 billion. 

(C) was the difference between our purchases of the dollar (from the Ministry of Finance) and sales of the dollar
For the period from 01/01/2015 up to 09/30/2015, the difference amounted to about $ 600 million Per month, and the Central Bank to cover this difference to achieve a balance in the balance Payments and maintain the exchange rate and therefore the general level of prices, and It is clear that even with the continued decline in oil prices and thus lower revenues fromThe dollar can continue to reserve enough coverage and adequate presence of about 60 Billion dollars of reserves.

(D) that what is happening from the low and high in reserves is frequent occurrence in countries Dependent on oil exports, has happened in the year 2009 when it declined
Oil prices, then the Bank amounted to sales ratio of the dollar to its purchases of dollar
148% and then returned to Araam new reserves after prices returned to their rates
the above.
- The common mistakes connect low or high reserves the central bank, as the
This reserve is governed by the nature of the composition and the nature of the use of outside control or Bank Control

Central and exemplified in:
1. The set of the dollar is doomed to exports of crude oil: the quantity and price, and sources Other virtually non-existent (remittances from abroad, whether from living abroad or Foreign investment, or non-oil exports).

2. The state budget expenses represent the main source of aggregate demand for goods

2. The state budget expenses represent the main source of aggregate demand for goods
The services, which are mostly imported, due to the absence of local productive Qaeda.

3. The migration of money from Iraq is a clear phenomenon because of the situation of the country.

4. continuing shortfall in the state budget and covered loans and bonds
And Alhawwalatohma means an increase in money supply which is not offset by revenue dollarised, this creates Additional demand for imported goods and services by more than received by the Central Bank of Dollar, which usually exchanged and the Ministry of Finance in Iraqi dinars through the bank.

Thus, the factors that control Configure backup, are outside the control of the Central Bank, and Over the reserve under what consists of the difference between the dollar sales through the bank window and Purchases Bank of the dollar from the Ministry of Finance If any are set forth.
Here arises a question about the possibility of central bank control the amount of sales through the restrictions put on Sale and conversion processes, say that restrict the sale of dollar operations and the results lead to the following phenomena:
First, contrary to the guidelines of the International Monetary Fund, which agreed and committed by States Memberships (including Iraq).

Second: the restriction intersects with the Central Bank Law, which stipulates in Article 28 thereof on (Buying or selling simple unconditional "cash or deferred" of foreign exchange).

Third, create a significant deviation between the official rate and the market price of obscene and achieve gains
For speculators, brokers, and lead to a general rise in prices and damage by force
Purchasing power of the Iraqi dinar.
Fourth: the practice of cheating, forgery and fraud and corruption in order to get
Quantities of the dollar.

From the point of view of the Central Bank if it is to be maintained on the reserve requires, processors
Structural and structural macroeconomic and financial policies (revenues, expenses, taxes ...)

Such as :
• stimulate national production and diversify the local productive base to reduce the demand for
Imports and therefore on the dollar. The Central Bank initiative Customize
Loan of $ 6 trillion dinars initiative pour into this trend.
• Reduce the budget deficit to less extent possible, to prevent the cash that is not offset by expansion
Dollar resources, thus increasing the demand for goods and services that are in
Mostly imported.
• providing political, economic and security stability factors to curb the flow of money
Abroad, and an increase in savings and investments inside Iraq.
• Apply deactivated to protect local product laws (Customs Tariff Law Consumer Protection Act, Product Protection Act, the anti-dumping law)
• the performance of state institutions related to imports and roles, in the granting of licenses in the supervision and control and obtaining fees and charges and the provision of databases National.

- The role of the Central Bank in accordance with the law and the law against money-laundering is forcing banks and financial institutions to apply the principle of "know your customer" to verify the sources of funds that enter the process of buying the dollar, and in this regard, the bank has taken a number of measures and steps task) preventive and deterrent (and will be posted on Central Bank site where
There is no room here to explain the details.

2. Some of the statements contained in the invitation to the Central Bank of the expertise and advice

Specialized international institutions, and here we refer to the following:

(a) that the bank founding member of the International Monetary Fund and the World Bank, in addition to organizations
Financial and Arab territory and international, and the World Bank in communication and consultation and understanding with those organizations, but that the rules work in the joints of his control the foundation are the principles, rules and recommendations and agreements issued by these organizations, for example, the sale of foreign currency window in the Central Bank, and management of international reserves governed Guidelines for the International Monetary Fund, and applied by the member states agreed upon, including Iraq, and so in the rest of respects exercised by the Bank in accordance with the best standards
And international practices.

(B) The Central Bank has consulting contracts with the best international consultancy firms
And Arab and international institutions audit and review, and continuous expansion of the bank in consultation channels, in addition to the support received by the Bank from organizations and central banks, international and Arab, Islamic and take advantage of the free services by virtue of membership in Iraq or By virtue of the bilateral relations and Memoranda of Understanding.

C-where the electronic systems and software have become captives of a framework and not to regulate the business andPractices and through them can attract the best practices reached by the developed world, the Central Bank of i and Ruwaytor of Information Technology with the help of global Bhraat with the latest software and techniques, and can be found on the infrastructure currently have in the bank, and say proudly as the best among all state institutions, and models of those systems, the payments system and the clearing and settlement, which is currently applied by a Bank
One of the most advanced systems in the region and the world, and which also provides day base 5-4

For the application and development of electronic payment systems in all its forms through the National divider, which came into work now, either the bank in the process of starting a comprehensive banking system Core Banking System which is the largest in an electronic program

The banking world and which represents a historic shift in the Bank's work. (D) that the human resources in the central bank - as opposed to state institutions represent Alakhary-

Stable resources of this institution did not leave despite what Iraq has passed through the conditions, and therefore have the resources accumulated experience and tender, and these resources are special support from organizations and international and regional banks and Arab financial institutions, and perhaps the number of sessions
Training and workshops which contribute to the bank's staff are the highest among the state institutions.

As we have strengthened cadre Bank has appointed top graduates from universities and graduate studies, as well as the appointment of graduates from outside Iraq) educational initiative (the terms of reference regarding the work of the bank.
This, as well as doing Banking Studies Center), one of the formations of this bank (of courses and training programs throughout the year.

3. The Bank will soon launch Strutijeth for the years 2016 to 2020, was built on the latest global developments in the banking and financial sector, the latest trends and tasks arising from developments in financial and monetary crises, which was born and developed from the functions and roles of central banks, the first strategy in the history of the Central Bank in the way In building its content and direction, and on the basis of overall quality and standards in preparation, with the introduction of
The formation of a special monitoring and evaluation.

Finally, the Maordnah is some which invites us all to pride in this important institution, and the responsibility of us all to look at them a professional look objective to serve the interest both locally and internationally, and that this bank is fully prepared to inform the interested ordered the bank, inform them of the field and documentaries, on
Policies, procedures and plans, and our doors are open for this purpose.

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(Press release) Governor of the Central Bank of Iraq to respond to statements that relate to monetary policy