Central Bank Governor: * Iraq will not face up to the problem in 2021 on the subject of cash reserve

Central Bank Governor: * Iraq will not face up to the problem in 2021 on the subject of cash reserves

January 24th, 2017

* Attach importance to the revitalization of the civil and private banking sector and the need for diversity of revenue that should be

* no fear on the financial status of the country being we are working with international standards the

first section

at a symposium of the Iraqi Center for Media Development

Prepared by : Maitham al - Lami

Iraqi Center for Development and Media held the national monthly meeting in which Dr. Ali Keywords Governor of the Central Bank hosted the presence of a group of academics, journalists and researchers who presented Dr. Ali Keywords explanation for the financial policy of the Central Bank of Iraq and how to deal with the crises suffered by the Iraqi economy, and pointed to a reserve the central bank and its importance in the stability of the financial status of the country, saying «there are a lot of facts that need to be clarified for all away from conclusions that lead to confusion in the Iraqi market and near panic among the various slides as they lead to give serious external impressions because of the figures and analyzes of inaccurate where it's affecting our negotiations with international organizations and bodies collected with Iraq special agreements so I call on everyone to take information from its sources and checking the figures pertaining to the financial side of the country, just as everyone knows that the definition of financial reserves is the bond group, which belong to the country and covered foreign currency internationally accepted these reserves are an indication of the strength of the country's financial, but at the same time there is a certain extent of reserves represents satisfaction and acceptance globally but there are guiding standards set by the international Monetary Fund to financial reserve would be acceptable Every country is different extent of his need for financial reserves commensurate with the internal and external economic conditions and the extent and stability of the most important of those instructions that the financial reserve covers the expenses of the state for six months while the second criterion is the coverage of the local currency. the third criterion is the ability of the reserve on the country's debt short-term coverage.

Financial reserves

and added Keywords «but over time lost its financial reserves a lot of those standards where the reserves are covered with gold, but this rule has blown up after World War II , so I made the International Monetary Fund under its guidance , which is quasi - bound states the possibility of the diversity of precautions with the survival rate of 10% for gold , so precautions have become loose can easily dispose of them according to the needs of the country so it can not develop a long - term investment in the financial precautions box. »

Central Bank Governor « He also stressed that precautions are not the surplus funds of the country , but it 's money she differed nomenclatures globally but on the whole we can say it 's the money that the state can invest and employ them when in crisis or special financial circumstances , and this is completely different from the Iraqi Central Bank reserves Some are confused and the financial reserve in international banks . When others hear that the central bank reserves had fallen imagine that this decline is the government's reserves, but the job of the central bank is to help the government in how to replace the local currencies in foreign currencies and put a balance between buying and selling , and this requires great efforts to measure enters the country of revenue in hard currency and the extent of expenditure where Iraq is an oil country and depends almost heavily on what Abah oil and different from the rest of the states with other sectors such as tourism and exports , trade and remittances from residents and other sectors, so the Central Bank of Iraq is working to maintain price dollar in the Iraqi market , according to market requirements of supply and demand.

Maintaining prices

and on maintaining exchange rates he said: »The Central Bank Act requires us to maintain the price level in the country and protect it from inflation, Iraq and the reality is that the Iraqi Ministry of Finance to receive 95% of revenues in dollars and 5% in local currency with be spending nearly 85 % in local currency and the rest in foreign currencies, so the central bank will conduct foreign state currencies around balanced with keeping the foreign debt payments in dollars, adding that the central bank is not controlled by a financial reserve , but it is based on what enters the country of the dollar over the oil revenues , which is exposed to constant fluctuations and to address this issue the government must diversify their revenues that come in the country to the dollar there is also a significant relationship between the state budget and the reserve which is an inverse relationship If approved budget of the country with a deficit , it means a direct decrease reserves as of the closing the shortfall in the budget , as the country is snapped dinar from the central bank without covering his parallel dollar to him and this is what happened in 2016 and the shortfall by 24 trillion, which was on the central bank to finance the 7 trillion of the amount and the rest is blocked by loans and lines of domestic and foreign bonds , but what happened is that the central bank has lost bonds is estimated at 20 trillion and the rest of the sources did not provide less than 4 trillion and this latest state of confusion that the 20 trillion it is not covered as equivalent to the dollar, so the many members of the House of Representatives when asked the reason for the low reserve asked them to reduce expenses in order to maintain the financial precautions, but the reality we impose that we are this step being we did not have another option either cover the deficit or the collapse of the overall economy of the country ».

He Keywords that Central is accurate with the International Monetary Fund 's financial position audits where all accounts confirm that Iraq will not face a problem up to 2021 on the subject of the reserve and that the issue of the decline is a natural and really the issue that we are having asked for cover 5 trillion in the budget of 2017 , but we have informed the International Monetary Fund a few days before and after he reviewed with them the financial situation that there is no need for this coverage after fulfill a number of countries to provide grants and loans to Iraq as well as the improvement in global oil prices so assure that there is no threat or fear on the financial situation of Iraq being we are working with international standards , but we're getting ahead of them so much.

Revitalization of the banking sector on

the other hand , stressed the governor of the Iraqi Central Bank on the importance of activating the private banks sector , especially those that carried out the central bank instructions in a professional and transparent , where he noted some of the constraints faced by these banks , especially on the subject of loan repayments where he said «that there is reluctance great in the payment process by the borrowers of up to 30% and this number is very difficult when we consider that the percentage of delays in repayment of loans globally does not exceed 2% , and this also applies to borrowers from government banks and also this very effect on the process of continuing to provide loans but the development of new terms

and in relation to international loans the central bank governor reiterated that Iraq 's negotiations with international loans have been successful after we have succeeded in overcoming the crisis in the past year as the international Fund expressed surprise at how to maintain the reserve ratio in spite of the crisis.

Anti - money laundering

as Keywords stressed the theme of activating the anti - money laundering being at the heart of the work of the central bank and how much money you shift out of the country where he explained that he pays special attention to this subject being affects about large to retain foreign currency modern importance of the cooperation of the media and public opinion makers , concluding observation with financial issues and support the central bank in the financial stability of the country process

Interventions

MP Mehdi al - Hafez called for the central bank to clarify the procedures and mechanisms carried out in the process of buying and selling the dollar are still suspicions about the issue as well as the identification of specific banks for transfers and buying and selling with tighter control of either in relation to international loans MacKay referred Hafiz said the Iraq push for non - implementation all the demands of the international Monetary Fund , where the answer Keywords that the CBI put rated both banks and through deals with each bank according Ranked with a precise control of all banks and banks and constant scrutiny of the financial accounts and on the issue of Iraq deal with the international Monetary Fund, this deal may set by the House of Representatives after pleading deal with the Convention and we are working within the context of this Agreement ,

Dr. adviser to Prime Minister appearance of Mohammed Saleh, praised the central bank action , especially in light of the turmoil in expenses and revenue shortfall , stressing that the development of financial reserves in Iraq well and able to absorb new shocks with commitment caution and fear in the demand and supply operations on the dollar as the controversy that happened with our partnership with the international Monetary Fund was about reducing the price of the Iraqi dinar and this means that the state will gain new money they will sell the dollar at a higher price, but this will make Iraqis gather them Adharron directly where the prices will rise by about direct and thoughtful despite the fact that the international Fund for students to implement it and what he called ( the silent taxes) and this is what made us two choices : the first move toward improving the financial performance of the country or use the (silent taxes) so it was the first choice is the best to keep the damage from the citizens.

Mr. Amer Abdul - Jabbar and former transport minister called for the lifting of the dollar very slightly to take advantage of the financial difference especially since it will provide the state money could be used in a number of areas , but the central bank governor noted that any rise in the dollar and the slight give indications that there financial crisis and thus take advantage of this situation by some traders will have its effect on the middle and lower classes than others ,

Dr. Kazem al - Hassani adviser to Prime Minister made his speech regarding the financial reform and the steps sought by the government to diversify its revenue and earning hard currency through the revitalization of some sectors and not to rely entirely on oil imports , and this is what will be implemented starting from the year 2017 to overcome what happened in the last year because of total dependence on the price of a barrel of oil and the decline after about largely on the financial resources of Iraq

Dr. Akram Al - Aqil adviser investment Authority called for an unwise and scientific thought out plans by specialists to start plan the diversity of imports that enhance the financial capacity of the country to the simple man can be physically is affected by this action shall be consequences counterproductive and these plans should be shared by the various experiences as well as the central bank works to attract money expatriate capital and the development of simple mechanisms to earn that money and introduced to Iraq and encourage investments as there are other important point regarding the importance and interest in the private banking sector in line with what launched by the Prime Minister of great interest private sectors.

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