Contrary to the transparency of the previous administration of the Central Bank, the new administration is keeping quiet about "currency sales" and the reclassification of banks raises criticism!

Economists warned of the policy of discretion followed by the new administration of the Central Bank of Iraq regarding the currency auction, wondering why the Central Bank withheld currency purchase lists and limited sales.

The Iraqi Central Bank used to publish currency auction lists on a daily basis, which include the bank’s name, the amounts sold in dollars, in addition to the number of companies that usually participate in the currency auction.

The previous administration of the Central Bank of Iraq adopted standards of transparency in displaying the currency auction sales that the bank assesses on a daily basis, and the official website publishes detailed lists of the process that witnesses the sale of billions of dollars per month.  On September 17, Prime Minister Mustafa Al-Kazemi issued a bureau order appointing Mustafa Mukhaif Al-Kitab as governor of the Central Bank of Iraq to succeed Ali Ismail Al-Alaq.

The book occupied the position of the legal department of the bank during the last two years.  Economists confirm that the new president is behind the central bank’s policy of secrecy regarding the currency auction.  The official website of the Central Bank states that it issued the last detailed list of currency auction sales on 1/10/2020, which fell on Thursday.

But the Central Bank began a new policy in dealing with the currency auction, starting on October 4.  According to the bulletins issued by the Central Bank and published on its official website, the lists have become very short and do not meet the criteria for transparency, according to economic experts.  The new listings are now limited to the total sales, the number of banks participating in the auction, the exchange companies tightened, and the number of mediating companies.   Economists, who asked not to be named, confirm that the policy of secrecy came a day after the Central Bank decided to reconsider the classification of private banks.

An official statement said, on October 5 this year, The Central Bank of Iraq started this day Monday implementing its first reform steps for the banking sector, as it finished classifying private commercial and Islamic banks operating in Iraq according to a set of international standards as well as a number of standards adopted by the This bank .

"This step comes within the framework of enhancing confidence in the banking sector, improving the quality of services provided to the public, as well as enhancing competitiveness in the Iraqi banking sector," the statement added.

The Central Bank noted that "it had previously asked the lagging banks more than once to work on correcting their conditions and paying their customers' dues. Therefore, this classification will be an opportunity for those banks to prove their seriousness in achieving the requirements of reform and pay the dues of depositors and shareholders."

The Central Bank took the reclassification step after a meeting the new president held with the directors of private banks on September 27, that is, 10 days after he took office.  A statement of the bank said that the meeting witnessed "during which the future vision for the work of the Central Bank of Iraq was presented in light of the economic crisis, and the terms of the reform paper for the banking sector, which will be started soon."

 According to the statement, Mustafa Makheif stressed "the importance of developing banking services and products in the coming stage, indicating that this bank will support the banking sector to advance its current reality."    However, experts consider the policy of discretion, which has now been adopted by the administration of the new central bank, within the framework of the preferential treatment granted to some banks.

Experts are trading the names of 3 banks, linked to a businessman, and they are at the top of the currency auction sales list after their classification was recently revised.  The decline in oil prices led to a decrease in Iraq's revenues from the dollar in recent months, which prompted the Central Bank to reduce its sales of hard currency during the last two months.

The exchange rate of the dollar witnessed a slight increase in the black market, despite the central bank continuing to sell it at 1190 dinars, while its price in the market ranges between 1220-1230 dinars.  However, the exchange rates witnessed a noticeable increase at the end of last week and the beginning of this week, as the exchange reached 1270, in light of the increasing talk about a decrease in currency reserves, due to the government's financial policy.

https://iraqakhbar.com/2716496