Central Bank and the waste of public money By: d. Sinan Shabibi Mohammad Reza * former central bank governor -
05/18/2013 - 5:35 pm
By: d. Sinan Shabibi Mohammad Reza * former central bank governor
Raised a lot of talk about the foreign currency auction hosted by the central bank that it involves a waste of public money, and I would like to make a few ideas on this subject.
1) There is no wastage of public money as a result of the auction process, فالمصارف submit Bdnanerha to the central bank and are converted into dollars using the foreign currency reserves, according to the exchange rate advertised, and therefore we have a process of exchange and swap purely monetary. In other words, we do not give a dollar for free, and thus we do not Nhdrh. The central bank paid 13 dinars for each dollar the converting. Central Bank is wasting public money if the dollar gave free as we mentioned or be dinar dollar swap preferential exchange rates.
It is also said that the central bank is wasting public money because it sells large quantities of the dollar.
But the sale of these quantities is a response to the request of buyers who represent commercial banks. It is very important to be meet all the demand for the dollar after the audit is put the bank in terms of banking irregularities, and after that the bank has submitted quotes that his request had been subjected to audit the Office of money laundering at the bank. The interview each application is essential in monetary policy, but the demand which is not to meet him and إشباعه by the central bank will go to the market to satisfy his need to the dollar from another source, which will create the exchange rate last necessarily be higher than the central bank rate, and therefore we will be in front of the phenomenon multiple exchange rates at the central bank and the local market.
That سيخالف Central Bank Law (Article 3) and will hinder the economic decision-making and distorts the price level. The criteria for the International Monetary Fund, which Iraq is the first signatories to the Convention of saying that the difference between the two rates (the central bank rate and the market price) must not exceed 2%. At the present time, and under the new management, the difference between the two rates of nearly 8%.
When the dollar bank sells it exercised monetary policy and not a commercial operation, Fbabie dollar pulls the dinar from circulation and relieve inflationary effects (the first goal of the central bank), which works on the rationalization of expenditure in general and lead to reduce wastage of public money.
The change in the exchange rate is not a waste of public money, and to satisfy the demand for the dollar is also not considered a waste of public money, and must be equal to the supply and demand to stabilize the price (the first goal of the central bank, as mentioned). This market operations and our economy is an economy in transition to a market economy, and such openness is accompanied by fluctuations in supply and demand certainly affect the movement of cash. The important thing is that the market situation is returned to the state of stability.
I just mentioned that the difference between the exchange rate of the central bank and the market price under the current administration is about 8%. Bank did not indicate the reason for this difference, and we believe that the reason is economic sense to the failure of the bank to meet all demand, which leads to this disparity between the central bank rate and the market price, and this is contrary to Article III of the Law of the Central Bank. This disparity must be addressed (note that it is on the rise), has faced the old administration some disruption and volatility in the exchange rate in early 2012 as a result of strong demand for the dollar due to the U.S. withdrawal at the end of 2011 and regional circumstances, other than that the administration was able to restore stability in the third week of the month of September 2012, where the price of 1196 dinars to the dollar.
Deduce if it according to the principles and the law of the central bank there is not a waste of public money, Firstly, the central bank sold dollars to meet the dinar, and secondly that the bank in his work that meets the demand for the dollar and maintains the stability of the exchange rate and domestic prices and provides a suitable environment to maintain public money and use it frequently used product, which promotes sustainable development and contribute to job creation, as shown in the article (3) of the Central Bank Act.
2) the central bank sells dollars to banks and sells to its customers for use in the importation of goods and services, and this is a business process and not a process which get cash out of the central bank, to come out after the dollar from the central bank. Therefore, this business process is not related to the central bank, but is related to uses different to the private sector that could be used dollar for medical purposes and tourism, or to buy some assets or may resort holder dollar to the so-called savings external causes of economic, security and political anticipation of improved conditions and investment environment even bring this savings in whole or in part to Iraq.
This means that the central bank should not be blamed if the import increased by a few of the amount granted, the central bank should not be held accountable for a business process. It is possible that the central bank held accountable if there is a defect in the exchange rate of the dollar against the dinar, ie the monetary process. The waste of public money as a result of a business process in spite of its importance does not fall within the work of the central bank.
3) The Central Bank shall provide a copy of the requests submitted to the conversion of the auction committee to the Department of combating money laundering and terrorist financing in the bank for detailed follow-up (which includes follow-up operations dubious) in spite of the bank concerned to give us the martyrdom about its operations free of money laundering.
If this circuit is that it must essentially be diagnosed and sequence of money laundering and financing of terrorism inside and outside Iraq can (according to the Money Laundering Act of 2004) to do so directly without reference to conservatism Bank, Vdaúrh money laundering retain the independence of its operations.
These subsequent follow-up, which is very important, do not obstruct determine the exchange rate and price stability in general. We have to remember, as we noted earlier, the domestic price stability is the first objective of the Central Bank in accordance with Article 3 of the Law on the Central Bank.
The auction committees receive a citation from the banks about the absence of money-laundering operations, but that should not impede the smooth flow of financial flows and exchange rate stability. The Department of money laundering, which received a copy of the auction requests directly is that you should scrutinize flows in terms of money laundering in detail.
It can be summed up what Ordnah in points (2) and (3) that the fate of foreign currency Badelha the central bank to meet the Iraqi dinar in the auction process, which ends its mission here, is to go through the commercial banks to finance the various types of imported goods and services and other purposes that we mentioned earlier. All requests for this conversion is given to money laundering department must follow up and determine the fate of foreign currency, especially suspicious ones and tell the security agencies directly.
4) It is important to show that there is no restriction in the current transfers of payments in accordance with Article VIII of the Convention on the International Monetary Fund, which Iraq was one of the first founders and first signatories to the Convention of 12.27.1945. In addition, the freedom in remittances guaranteed notes of the financial and economic policies with the
International Monetary Fund, which has been held and signed by the Minister of Finance and the Governor of the Central Bank. We would like to make it clear also that all restrictions have been removed, especially after the abolition of the Directorate of foreign exchange at the central bank in 2003.
[You must be registered and logged in to see this link.]
05/18/2013 - 5:35 pm
By: d. Sinan Shabibi Mohammad Reza * former central bank governor
Raised a lot of talk about the foreign currency auction hosted by the central bank that it involves a waste of public money, and I would like to make a few ideas on this subject.
1) There is no wastage of public money as a result of the auction process, فالمصارف submit Bdnanerha to the central bank and are converted into dollars using the foreign currency reserves, according to the exchange rate advertised, and therefore we have a process of exchange and swap purely monetary. In other words, we do not give a dollar for free, and thus we do not Nhdrh. The central bank paid 13 dinars for each dollar the converting. Central Bank is wasting public money if the dollar gave free as we mentioned or be dinar dollar swap preferential exchange rates.
It is also said that the central bank is wasting public money because it sells large quantities of the dollar.
But the sale of these quantities is a response to the request of buyers who represent commercial banks. It is very important to be meet all the demand for the dollar after the audit is put the bank in terms of banking irregularities, and after that the bank has submitted quotes that his request had been subjected to audit the Office of money laundering at the bank. The interview each application is essential in monetary policy, but the demand which is not to meet him and إشباعه by the central bank will go to the market to satisfy his need to the dollar from another source, which will create the exchange rate last necessarily be higher than the central bank rate, and therefore we will be in front of the phenomenon multiple exchange rates at the central bank and the local market.
That سيخالف Central Bank Law (Article 3) and will hinder the economic decision-making and distorts the price level. The criteria for the International Monetary Fund, which Iraq is the first signatories to the Convention of saying that the difference between the two rates (the central bank rate and the market price) must not exceed 2%. At the present time, and under the new management, the difference between the two rates of nearly 8%.
When the dollar bank sells it exercised monetary policy and not a commercial operation, Fbabie dollar pulls the dinar from circulation and relieve inflationary effects (the first goal of the central bank), which works on the rationalization of expenditure in general and lead to reduce wastage of public money.
The change in the exchange rate is not a waste of public money, and to satisfy the demand for the dollar is also not considered a waste of public money, and must be equal to the supply and demand to stabilize the price (the first goal of the central bank, as mentioned). This market operations and our economy is an economy in transition to a market economy, and such openness is accompanied by fluctuations in supply and demand certainly affect the movement of cash. The important thing is that the market situation is returned to the state of stability.
I just mentioned that the difference between the exchange rate of the central bank and the market price under the current administration is about 8%. Bank did not indicate the reason for this difference, and we believe that the reason is economic sense to the failure of the bank to meet all demand, which leads to this disparity between the central bank rate and the market price, and this is contrary to Article III of the Law of the Central Bank. This disparity must be addressed (note that it is on the rise), has faced the old administration some disruption and volatility in the exchange rate in early 2012 as a result of strong demand for the dollar due to the U.S. withdrawal at the end of 2011 and regional circumstances, other than that the administration was able to restore stability in the third week of the month of September 2012, where the price of 1196 dinars to the dollar.
Deduce if it according to the principles and the law of the central bank there is not a waste of public money, Firstly, the central bank sold dollars to meet the dinar, and secondly that the bank in his work that meets the demand for the dollar and maintains the stability of the exchange rate and domestic prices and provides a suitable environment to maintain public money and use it frequently used product, which promotes sustainable development and contribute to job creation, as shown in the article (3) of the Central Bank Act.
2) the central bank sells dollars to banks and sells to its customers for use in the importation of goods and services, and this is a business process and not a process which get cash out of the central bank, to come out after the dollar from the central bank. Therefore, this business process is not related to the central bank, but is related to uses different to the private sector that could be used dollar for medical purposes and tourism, or to buy some assets or may resort holder dollar to the so-called savings external causes of economic, security and political anticipation of improved conditions and investment environment even bring this savings in whole or in part to Iraq.
This means that the central bank should not be blamed if the import increased by a few of the amount granted, the central bank should not be held accountable for a business process. It is possible that the central bank held accountable if there is a defect in the exchange rate of the dollar against the dinar, ie the monetary process. The waste of public money as a result of a business process in spite of its importance does not fall within the work of the central bank.
3) The Central Bank shall provide a copy of the requests submitted to the conversion of the auction committee to the Department of combating money laundering and terrorist financing in the bank for detailed follow-up (which includes follow-up operations dubious) in spite of the bank concerned to give us the martyrdom about its operations free of money laundering.
If this circuit is that it must essentially be diagnosed and sequence of money laundering and financing of terrorism inside and outside Iraq can (according to the Money Laundering Act of 2004) to do so directly without reference to conservatism Bank, Vdaúrh money laundering retain the independence of its operations.
These subsequent follow-up, which is very important, do not obstruct determine the exchange rate and price stability in general. We have to remember, as we noted earlier, the domestic price stability is the first objective of the Central Bank in accordance with Article 3 of the Law on the Central Bank.
The auction committees receive a citation from the banks about the absence of money-laundering operations, but that should not impede the smooth flow of financial flows and exchange rate stability. The Department of money laundering, which received a copy of the auction requests directly is that you should scrutinize flows in terms of money laundering in detail.
It can be summed up what Ordnah in points (2) and (3) that the fate of foreign currency Badelha the central bank to meet the Iraqi dinar in the auction process, which ends its mission here, is to go through the commercial banks to finance the various types of imported goods and services and other purposes that we mentioned earlier. All requests for this conversion is given to money laundering department must follow up and determine the fate of foreign currency, especially suspicious ones and tell the security agencies directly.
4) It is important to show that there is no restriction in the current transfers of payments in accordance with Article VIII of the Convention on the International Monetary Fund, which Iraq was one of the first founders and first signatories to the Convention of 12.27.1945. In addition, the freedom in remittances guaranteed notes of the financial and economic policies with the
International Monetary Fund, which has been held and signed by the Minister of Finance and the Governor of the Central Bank. We would like to make it clear also that all restrictions have been removed, especially after the abolition of the Directorate of foreign exchange at the central bank in 2003.
[You must be registered and logged in to see this link.]
Today at 10:28 am by Rocky
» Al-Hakim: Iraq's future cannot be mortgaged to volatile oil prices
Today at 10:24 am by Rocky
» The conflict of the corridors: the path to development from a historical perspective and the door to
Today at 10:22 am by Rocky
» The Kurdistan Region demands that the federal government spend 1.1 billion dinars.. What is the reas
Today at 10:21 am by Rocky
» Tomorrow, Iraq is preparing to launch a complementary round of gas licensing
Today at 10:19 am by Rocky
» A government move to restore the funds of the Trade Bank of Iraq
Today at 10:17 am by Rocky
» The Central Bank informs France of plans to restructure the banking sector
Today at 10:15 am by Rocky
» A government advisor reveals the fate of the budget tables
Today at 10:13 am by Rocky
» Iranian mediation between Baghdad and Erbil... Revealing the most prominent files of Raisi’s visit t
Today at 10:10 am by Rocky
» Reconstruction and development is a priority.. A parliamentary committee follows up and monitors gov
Today at 10:08 am by Rocky
» Al-Hakim comments on the agreements concluded with Türkiye and confirms: Iraq is on the right path
Today at 10:06 am by Rocky
» Tomorrow... Iraq takes a step that will give it gas equivalent to 200% of imported Iranian gas
Today at 10:04 am by Rocky
» A long and disturbing message.. The Iraqi government “blames” the United Nations because of “other p
Today at 10:00 am by Rocky
» utube 5/9/24 MM&C 0:02 / 46:46 PM - Al-Sudani - Golden Opportunity - Private Sector - Contra
Today at 8:33 am by Rocky
» The Governor of the Central Bank and the French Ambassador discuss developments in the banking secto
Today at 6:18 am by Rocky
» Al-Bajari: Iraqi companies will have a great opportunity to work after opening the door to investmen
Today at 6:16 am by Rocky
» Transparency: Imports from Sulaymaniyah and Halabja during the past week amounted to more than 10 bi
Today at 6:13 am by Rocky
» Al-Sudani: The delayed projects left great damage to the level of services in Babylon
Today at 6:12 am by Rocky
» Economist: The fluctuation of the dollar is “the balance of speculators”
Today at 6:10 am by Rocky
» {Al-Furat News} publishes the text of Al-Sudani’s request to Guterres to end UNAMI’s work in Iraq
Today at 6:08 am by Rocky
» A former MP accuses Türkiye of transferring its conflict with the workers to Iraq
Today at 6:05 am by Rocky
» A call to the Sudanese to remove American forces from Iraq
Today at 6:03 am by Rocky
» Oil Parliament: Ankara holds Erbil responsible for the oil fines it owes
Today at 6:02 am by Rocky
» The government is silent...the reality of removing American forces from Iraq
Today at 6:01 am by Rocky
» The radiation protection law in the first session of the next legislative term
Today at 6:00 am by Rocky
» A Spanish company raises controversy and a representative reveals a parliamentary movement against i
Today at 5:59 am by Rocky
» Sudanese officially requests the end of the United Nations mission in Iraq / documents
Today at 5:58 am by Rocky
» Because its sessions were not held, the Kirkuk Council faces a judicial complaint, and its members d
Today at 5:56 am by Rocky
» Former US Chief of Staff: We slaughtered huge numbers of innocent people in Iraq and other countries
Today at 5:55 am by Rocky
» The Association of Private Banks counts the percentage of shares traded on the stock market during a
Today at 5:53 am by Rocky
» The European Union and Iraq agree to increase cooperation between them
Today at 5:52 am by Rocky
» American Bank: Expectations to increase Iraq’s oil capacity in 2025
Today at 5:50 am by Rocky
» Central Bank Governor to the French Ambassador: The plan to restructure government banks will change
Today at 5:48 am by Rocky
» Integrity confirms working to conclude a memorandum of understanding with the Kuwaiti Anti-Corruptio
Today at 5:47 am by Rocky
» Highlights of the Prime Minister's visit to Babylon
Today at 5:46 am by Rocky
» The Minister of Transport discusses with a Turkish delegation the latest developments in the develop
Today at 5:44 am by Rocky
» Free of charge.. Issuing approximately 13 thousand unified cards for those covered by social protect
Today at 5:42 am by Rocky
» A parliamentary committee advises the government to deter trespassers: Slums are one of the reasons
Today at 5:41 am by Rocky
» Embassy Protection confirms to “Baghdad Today”: The missions are safe and we have taken proactive me
Today at 5:38 am by Rocky
» Water resources resolve the controversy of the “Wadi Al-Tea” project.. It will nourish the Hamrin ic
Today at 5:37 am by Rocky
» After approving the National Security Strategy...a parliamentary movement to host “responsible” figu
Today at 5:36 am by Rocky
» Al-Hakim calls for the distribution of plots of land to the families of the martyrs of the Popular M
Today at 5:34 am by Rocky
» Order 160 Committee completes the “port scandals” papers... and searches for a legal outlet for impl
Today at 5:33 am by Rocky
» It revealed the details of its contract with four companies to complete the census requirements... P
Today at 5:31 am by Rocky
» Egypt, Morocco and Qatar praise the Iraqi Integrity proposal to establish the Arab Law Enforcement C
Today at 5:30 am by Rocky
» The Iraqi Parliament enters its legislative recess and requires holding an “extraordinary” session o
Today at 5:28 am by Rocky
» The Sudanese has not rested since the morning.. He carried out 12 activities and allocated a trillio
Today at 5:27 am by Rocky
» Blinken's agent: Erbil is a strategic ally of Washington in a 360-degree relationship
Today at 5:25 am by Rocky
» Oil seeks to convert refinery products to “Euro 5”... high quality and environmentally friendly
Today at 5:24 am by Rocky
» A leader in the framework: There is no need for early elections...the “legislative” elections will t
Today at 5:23 am by Rocky
» Parliament decides to extend its legislative term by 30 days
Today at 5:22 am by Rocky
» Iraq has the tenth worst economic growth in the world during the last 5 years
Today at 5:19 am by Rocky
» Al-Hakim: The future cannot be mortgaged to volatile oil prices
Today at 5:17 am by Rocky
» It will change the reality of Iraqi banks.. Al-Alaq reveals a plan that enjoys Sudanese support
Today at 5:15 am by Rocky
» MM&C 5/9/24 The Federation of Chambers of Commerce and the European Union discuss cooperation to fin
Yesterday at 10:27 am by Rocky
» MM&C 5/9/24 Customs, security and economic aspects
Yesterday at 10:24 am by Rocky
» Union of Arab Banks: Iraq's environment encourages investment
Yesterday at 7:57 am by Rocky
» Government advisor: Movement to recover bad debts for the benefit of the Iraqi Trade Bank
Yesterday at 7:55 am by Rocky
» The International Development Bank announces the opening of its new branch in Erbil
Yesterday at 7:52 am by Rocky
» Oil seeks to convert refinery products to “Euro 5”... high quality and environmentally friendly
Yesterday at 7:50 am by Rocky
» Budget delay: the cry for help for paralyzed services and disrupted dreams
Yesterday at 7:47 am by Rocky
» Oil: Completion of projects to improve the quality of petroleum products, and others are under imple
Yesterday at 7:44 am by Rocky
» Chairman of the Securities Commission: 3 million shares, average daily trading volume
Yesterday at 7:43 am by Rocky
» Tamim calls on the countries participating in the meetings of the Arab Administrative Development Or
Yesterday at 7:41 am by Rocky
» Parliamentary Endowments: 39 thousand pilgrims, Iraq’s share, and waiving the religious obligation i
Yesterday at 7:39 am by Rocky
» Washington refers to Iraqi legislation that “does not harm” his international presence, and Baghdad
Yesterday at 7:34 am by Rocky
» Deputy: Extending the legislative term depends on sending the budget schedules
Yesterday at 7:30 am by Rocky
» Parliamentary Legal: 88 draft laws on the parliamentary shelf
Yesterday at 7:29 am by Rocky
» The head of the movement denies any Iraqi-American negotiations to remove the coalition
Yesterday at 6:23 am by Rocky
» A deputy expects to resolve the issue of electing the Speaker of Parliament next week
Yesterday at 6:22 am by Rocky
» Obtaining the approval of the Minister of Electricity to fill the energy shortage in Dhi Qar
Yesterday at 6:21 am by Rocky
» Economist on the decline in dollar prices: My time and it will not reach its official price
Yesterday at 6:20 am by Rocky
» The Iraqi Ministerial Council for National Security approves the 2024-2028 strategy
Yesterday at 6:18 am by Rocky
» Mulla Bakhtiar: Nechirvan Barzani's visit to Iran melted the ice between Erbil and Tehran
Yesterday at 6:17 am by Rocky
» Password "78"... Why did the Sudanese government's interrogations and noisy sessions decline?
Yesterday at 6:16 am by Rocky
» JP Morgan forecasts an increase in the oil capacity of Iraq and other countries in 2025
Yesterday at 6:15 am by Rocky
» Turkish Minister of Transport: The development road will cost $20 billion
Yesterday at 6:13 am by Rocky
» The Supreme Committee for Reconstruction and Investment approves a package of strategic projects
Yesterday at 6:12 am by Rocky
» Work: Preparing a unified national strategy to create job opportunities for youth
Yesterday at 6:11 am by Rocky
» The Prime Minister's financial advisor reduces the risks of the budget deficit
Yesterday at 6:10 am by Rocky
» Sudanese announces the signing of an agreement with Japan to finance small and medium enterprises in
Yesterday at 6:09 am by Rocky
» Government Advisor: The Securities Commission represents the governance base for promoting financial
Yesterday at 6:08 am by Rocky
» A unified national strategy to create job opportunities for youth
Yesterday at 6:07 am by Rocky
» A one-week deadline to decide the position of Speaker of Parliament
Yesterday at 6:06 am by Rocky
» Parliament: We coordinate with the competent regulatory authorities to examine medicines
Yesterday at 6:04 am by Rocky
» The Commission suspends the Kurdistan Parliament's voting procedures
Yesterday at 6:03 am by Rocky
» $100 million to localize the pharmaceutical industry
Yesterday at 6:01 am by Rocky
» Increase in external remittances at the Central Bank
Yesterday at 6:00 am by Rocky
» A government advisor reduces the risks of a budget deficit
Yesterday at 5:54 am by Rocky
» Culture: We seek to invest in the stability of the country to advance the tourism sector
Yesterday at 5:53 am by Rocky
» Integrity announces the results of a questionnaire on bribery in real estate registration department
Yesterday at 5:50 am by Rocky
» Parliament comments on Sudanese plan to restructure the government apparatus: It needs radical refor
Yesterday at 5:49 am by Rocky
» The dollar rises again against the Iraqi dinar in Baghdad
Yesterday at 5:45 am by Rocky
» Politician: The government does not deal transparently with the issue of expelling the Americans
Yesterday at 5:43 am by Rocky
» A government bank participating in an accounting project
Yesterday at 5:42 am by Rocky
» Masrour Barzani: The Kurdistan Regional Government has implemented all its obligations and duties
Yesterday at 5:41 am by Rocky
» French Consul: France strengthens relations with the Kurdistan Region
Yesterday at 5:39 am by Rocky
» Studies Center: Sudanese faces the challenges of maintaining sustainable relations with the United S
Yesterday at 5:38 am by Rocky
» “The absence of democracy is not possible.” The federal government remains silent on the postponemen
Yesterday at 5:37 am by Rocky