9/15/2013 (00:01 pm)
d. Sinan Shabibi Mohammad Reza *
Primary objective of the central bank is working to achieve price stability in local and foreign currency exchange rate, not the distribution of money to the merchants by their banks as imagined by many who have given the impression that the so-called auction is a commercial operation, not monetary policy.
The stability of prices, no, it simply requires that corresponds to supply all the demand, and in the field of foreign currency that corresponds to the width of each foreign currency demand, and in the light of that achieved a certain exchange rate can be changed depending on the circumstances of inflation mainly. This means that you must satisfy demand for foreign currency in full (after confirming that the central bank has received a certificate banks gap in its operations from money laundering, and that there are no irregularities banking prevent the bank concerned from entering the auction of foreign currency), and meet the demand in full will prevent the creation of market Another exchange, and thus ensure the stability of the exchange rate and lack of pluralism.
This method, which satisfy the demand and what it means for the currency flow, does not involve smuggling or wastage of the coin. It also does not fall into neglect because it essentially has been dinar and dollar swap that insatiable demand.
The ability that we have to satisfy all the demand derived from the large reserves that we have built in the Central Bank over the years. Were it not for this reserve we were forced to reduce the dinar exchange rate and change all the time, and this is what leads to the loss of the exchange rate and stability.
It may be asked some foreign currency from banks too big and the result of large deposits of Iraqi dinars. We assume that failure to meet this demand will lead to a jolt in prices and create another market, so the information about the details of this request must be submitted, after the mission is to lead the market or currency auction, to the circle of money laundering that should follow this issue seriously.
Gave us the large size of the reserve sufficient flexibility to use monetary policy to fight inflation, which had reached about 50% in 2004, we started to raise the dinar against the dollar in the year to encourage outflows, Kalastairadat and others, and therefore reduced the pressure on the internal market. At the same time we raised interest rates to move funds into the financial market of the real market. If the reserve is the one who ensures the stability of the exchange rate, but this should not being disposed to these purposes. As mentioned, the central bank is keen to be made to meet the demand for foreign currency in full and to stabilize the exchange rate. If we do not do that and we sold less than the demand will rise the price of the dollar in the market, and this is inconsistent with our monetary policy but it may satisfy some people to sell or "waste" will be lower. But certainly we will take the correct action that achieves the goal of monetary policy and stability. As mentioned also the case for the central bank is to replace Iraqi currency in a foreign currency can be used for various purposes. The actual import, it does not fall within the responsibility of the central bank, and I do not think that there is a central bank in the world handles the import of goods!
The central bank meets the demand for the dollar for the purpose of price stability, which is working on the application of his first goal. Bank staff find themselves in front of the problem, if keen to meet the demand for their disposal this might be interpreted as a type of waste and If meet request is not the price jeopardy and are breaking the law, what is the solution? For the central bank's solution is to follow the dictates of its law and the implementation of monetary policy.
Start of the auction process and mechanism to withdraw the Iraqi currency and ease pressure on the market. This is done through swap cash (JD dollar), as we mentioned earlier, the central bank by market or commission auction does not follow the dollar when he leaves the bank, but the circle of money laundering independent administratively is that you must perform this follow-up, especially as they have close ties with money laundering departments in other states and neighboring countries. And the dollar when he leaves the bank does not finance commercial operations only, but is used to finance all payments under the so-called international balance of payments, which depicts all the international economic relations of Iraq with the world as payment for services and for investment in overseas operations.
There is no doubt that the more applications relating to import foreign currency, the central bank sends a copy of the request importers to the sector or to the Ministry of Commerce to follow to reach the final figure for imports, which codifies in the Iraqi customs department. Thus, as we mentioned, the work of the central bank monetary end up giving the dollar, but the result follows the development of imports from the relevant departments of their importance in the balance of payments prepared by the Central Bank.
According to Article 23 of the Law on the Central Bank Bank officials enjoy immunity from legal process just like the staff respected central banks in the world. The bank compensates the employee for any legal costs. This immunity derived from the importance of the work of central banks, seriousness and dealing direct Balomd and the short and the fact that these banks are the lender to banks in a crisis situation or the so-called Bmkarz last resort to help save the economic situation.
The bank now sells large quantities ranging between 200 and 300 million dollars a day, and this goes beyond what was sell the bank in the period of the previous administration. Why not be the result of deliberate neglect? A viable solution to the issue of auction is in the application of Statement No. 19, which was released in 1/10/2012 and resulted in stability in the exchange rate, reaching Price 1196 dinars to the dollar.
The central bank allowed at the present time for the banks to contribute with him in determining the exchange rate, and allowed to increase cash significantly, and the seriousness of this situation comes from the difficulty of follow-up and thus uses, from the circles of money laundering.
Not neglect the management of the Central Bank of the previous issue of money laundering, all requests for transfer from the banks, as we have said, you go a copy to the Department of money laundering directly, and this circuit is that you must follow under the money-laundering law in force in 2004 (Article 12, paragraph 4, which states If, however, doubt the intelligence-Money Laundering Office "reasonable complained that the transaction was made or attempted which involves funds derived from illegal activities or money laundering or money intended to be used in the financing of crime or funds have a criminal organization the right to dispose, or terrorist financing, or that the transaction is intended to in any other unlawful purpose service, shall promptly notify the authority competent prosecution and investigation).
I have requested the Bank's management the previous director of anti-money laundering at the bank on 24 August 2012 report on suspected cases, and Shahin says manager in a timely manner (Khalid Cltag) the existence of three cases only, the cases have been discovered in the era of the manager who preceded and has been referred to the Committee on fines Bank to study and impose fines on them, no action had been taken on them. This means that the Anti-Money Laundering Office, headed Mr. Cltag no point did not raise to senior management any situation or issue where suspicion of money laundering or financing of terrorism during the two years he spent in office management director.
With regard to the report of the Office of Financial Supervision issued on 09.25.2012, it did not reach any conclusion about the waste of public money but it is not reassuring to the foreign currency auction mechanisms in spite of that there were other international auditing firms scrutinizes the work of bank accounts, such as Ernst and Young and KPMG)), I have referred these companies some audit observations were discussed and resolved quietly with the relevant departments in the bank.
The Court also found that imports were not only a small fraction of the amount granted. We must show that this is not about the central bank because monetary institution, not a commercial. No it within the principles of the Central Bank of the waste must be determined within the policy and monetary operations, ie, within the process of converting the Iraqi currency into foreign currency and in the process of determining the exchange rate and not within the business processes (the central bank deals Besarfah dinar to the dollar and not Besarfah dinar to the goods and the goods). The functional secretariat of the current administration requires that illustrate these basic facts to the relevant authorities of justice is no employee be held accountable because he was not there import, Valastirad (a trade policy rather than cash) ever recorded by other entities and not the central bank.
The monetary policy is the process of economic, not legal or commercial process, so they bear a lot of interpretations and opinions about the impact of developments and trends in the economy, especially inflation and rising prices. We would like to point out here that the Financial Services Tribunal and approved within the Central Bank Law emphasized the lack of competence to issues of monetary policy and foreign exchange policies (see Section XII of the Law of the Central Bank, the Financial Services Tribunal Article 63, paragraph 4). That satisfy the demand for foreign currency fully is a prerequisite for the stability of the exchange rate and confirm the bank's commitment to the law. May not it seemed the every demand and therefore do not waste public money but likely to be accountability the failure to achieve stability in the price and market.
The central bank should focus on preventing the parallel currency market or multiple markets, and multiple exchange rates is contrary to the central bank law because it conflicted with the task of achieving stability in domestic prices. The difference between the bank rate and the market price must not exceed 2%, according to the Convention on the International Monetary Fund (IMF) signed by Iraq in 1945.
We can conclude in the conclusion that when the central bank swap dinar to the dollar or dollar selling freely as is the case in Iraq, the central bank takes the currency Iraqi covered fully reserves of foreign currency, according to the balance sheet of the bank, why is considered by analysts to the dinar has a value of less than or is inferior to the dollar? If dinar was covered with 100% foreign currency and enjoy the stability of long-term and there is a central bank watching closely all developments and maintains the stability and addresses variability, this dinar be as currency difficult any that when we sell the dollar we receive something unparalleled in strength, where waste if?. The central bank maintains monetary stability through the float of the dinar in the market mainly with monitoring for the purpose of management whenever necessary in order to serve the national economy, ie, we follow the system of managed floating, and because of the large reserve converts this flotation to the stability of the state. We are to be in front of a waste if you do not receive when we sell Iraqi currency dollar. There is no doubt that we are going waste and low currency dinar if it relates to the dollar stable though there were not watching monetary policy developments, this will lead to a decline of the dinar and therefore we will need to more dinars to buy the same dollar amount of which will lead to some kind of loss or wastage. Therefore, the central bank is keen to maintain a relationship free from fluctuations with the dollar whenever possible. It is also keen to reduce the difference between the official price and the market price, which, as mentioned must not exceed 2%. We have succeeded in maintaining the purchasing power of the dinar and stability in spite of the problems of political stability and inefficient implementation of the government investment budget. When confront this inefficient implementation of monetary policy must address it and restore economic stability, which will undoubtedly impact on the composition and the severity of monetary policy and the efficient implementation of investment approaches.
In the past, special days and siege wars, there was no monetary stability due to uncontrolled monetary version, and so there were not a stable currency, the dinar was always very low commodity for foreign currencies. However, after the application of the new policy after 2003, the situation differed radically and became our goal to maintain the stability of the currency and the continued penetration into the world through the dollar. This is what has been achieved and we insist on its lifetime, and a style auction or sale and purchase of foreign currency cash of the most important policies in this area. As we did not waste public money because we sold, and we received $ dinars stable suit and sobering and The value can be converted to the dollar at any time without difficulty. But of course, we will continue to need to work on economic stability achieved through central bank policies (not just the auction of foreign currency) to spend a year characterized by its efficiency and productivity. We will continue to need to coordinate between the government and the central bank.
The dollar spending and import used in, for example, this issue is not related to the central bank or the auction committees where it should being pursued by the Department of Anti-Money Laundering, which is in spite of the bank's dependence on it is independent in its operations and has its own law.
* Central Bank Governor isolated without legal support
[You must be registered and logged in to see this link.]