Ali Salman - 09/16/2013
Sinan Mohammed Rida al-Shabibi Governor of the Central Bank of the former Iraqi
The objective basis for the central bank is working to achieve stability in the domestic prices and foreign currency exchange rate, not the distribution of money to the merchants by their banks as imagined by many who gave the impression that the so-called auction is a business process and not monetary policy. That the stability of prices, state, simply requires that corresponds to supply all the demand in the area of foreign currency that corresponds to the supply of foreign currency each demand Alihaovi light that achieved a certain exchange rate can be changed depending on the circumstances of inflation mainly. This means that he must satisfy the demand for foreign currency in full (after confirming that the central bank received the martyrdom of banks around the free operations of money laundering and that there was no wrongdoing banking prevent the bank concerned from entering the auction of foreign currency) and meet the demand in full will prevent the creation of other market exchange and thus ensure the stability of the exchange rate and lack of pluralism. This style any satiate demand and the flow of currency to Aantoa to smuggle or wastage of the coin as he Aandrj within negligence because he basically has been exchanged for dinar and he insatiable demand. The ability that we have to satisfy all the demand derived from the reserve great we have built in the Central Bank over the years. Without this reserve we had to reduce the dinar exchange rate and change constantly and thus loses the exchange rate stability.
It may be asked some very large banks, the result of large deposits of Iraqi dinars. We assume that the lack of an interview this will create a demand shock in prices and will create another market, so the information about the details of this request must be submitted after the mission is to lead or currency auction market to the circle of money laundering, which must pursue this issue seriously.
The large size of the reserve has given us the 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 thus less pressure on the domestic market at the same time we raised prices interest to move money into the financial market of the real market. So the reserve is that ensures Astaqrarsar the exchange therefore should not be disposed to these purposes.
As we mentioned, the central bank is keen to take place to meet the demand for foreign currency in full and 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 incompatible with our monetary policy, but some may satisfy that sell "or waste" would be less. But certainly we will take the correct action that achieves the goal of monetary policy and stability. As we have stated that the case for the central bank is to replace Iraqi currency foreign currency could be used in various purposes. As for the actual import, it is to Aiga 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 the first goal of the central bank. That the central bank's employees find themselves in front of a problem If keen to meet the demand for their disposal this might be interpreted as a type of waste and if not demand the price and are breaking the law, what is the solution? For the central bank, the solution is to follow the dictates of its law and the implementation of monetary policy.
The auction process and mechanism begins to withdraw the Iraqi currency and ease pressure on the market and is being done through swap cash dinars dollar and as we mentioned earlier that the central bank by market or Commission auction does not follow the dollar when he leaves the bank, but the Department of money laundering independent administratively is that you must In this follow-up special and it has close ties with money laundering departments in other countries 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 for services and for investment in overseas operations.
There is no doubt that many requests on foreign currency related to importation and the central bank sends a copy of the Request importers to the sector or to the Ministry of Commerce to continue 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 to their importance in the balance of payments prepared by the Central Bank.
The central bank officials enjoy, in accordance with Article 23 of the Law on the Central Bank shall be immune from legal proceedings just like the central banks in the world and respected bank compensates the employee for any legal costs. This immunity derived from the importance of the work of central banks and gravity and dealing Balamd the, short and direct, and the fact that these banks are the lender in case of crisis to banks, or so-called Bmkarz last resort and that helps to save the economic situation.
The bank now sells large quantities ranging from 200 to 300 per day, which exceeds McCann sell the bank in the period of the previous administration. Why it clear that as a result of deliberate neglect?. The effective solution to the issue of auction is the application of Statement No. 19 issued on 1/10/2012, which resulted in stability in the exchange rate as the price reached 1196 dinars to the dollar.
The central bank allowed at the present time for banks that contribute with the Central Bank in determining the exchange rate and also increase the amounts allowed cash Kberuchtorh 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 go copy them to the Department of money laundering directly and this circuit is that you must follow under the law of money laundering in force for 2004 (Article 12, paragraph 4), which states that (if you doubt Office "money laundering intelligence office" reasonable complained in a transaction that has been made or initiated involving money derived from illegal activities or money laundering or money intended to be used in the financing of crime or money have a criminal organization right Iisrv, or financing terrorists, or that the intended transaction in any other manner service illegal purpose, shall promptly notify the authority competent prosecution and investigation)
The administration has asked the bank former director of anti-money laundering at the bank on 24 August 2012 report on suspected cases have been manager in a timely manner (Khalid Cltag) the existence of three cases only, but these 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, meaning it was action. This means that the Anti-Money Laundering Office, headed Mr. Cltag no point did not raise to the senior management of any case or issue where suspicion of money laundering or financing of terrorism during the two years he spent this manager in the management of the office.
As for the report of the Office of Financial Supervision issued on 25.09.2012, it did not reach any conclusion about the waste of public money, but it is not reassuring to foreign currency auction mechanisms Although there had been other international auditing firms scrutinizes the work, such as bank accounts
Ernst and Young and KPMG
These companies have I mentioned some of the audit observations were discussed and resolved quietly with the relevant departments in the bank.
The Court also indicated that imports were not only a small percentage of the amount granted. We must show that this is not about the central bank because monetary institution, not a commercial. Meaning it is within the principles of the central bank, the waste must be set within the policy and monetary operations of any in the process of transforming 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 goods and goods). The Secretariat functional require the current administration to explain these basic facts to the relevant bodies of justice is no staff to be held accountable because he was not there importers. Valastirad (which, not trade policy reviews) recorded by other entities and not the central bank.
That monetary policy is a process of economic, not legal or business 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 confirmed 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).
To satisfy the demand for foreign currency in full is a prerequisite for the stability of the exchange rate and confirm our commitment to the law of the bank. May to Ancba both demand and therefore (Anadr) of public money, but probably take place a lack of stability in the price and market.
The work of the central bank should focus on preventing the parallel currency market or multiple markets. Multiple exchange rates is contrary to the central bank law because it conflicted with stability in domestic prices. The difference between the bank rate and the market rate should not exceed 2%, according to the Convention on the International Monetary Fund and signed by Iraq in 1945.
This we can deduce the conclusion that when the central bank swap dinar sell the dollar and 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 Analysts said the dinar has value or less 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 difficult meaning it when we sell the dollar we receive something matched in strength (where waste then?). We maintain monetary stability through the float of the dinar in the market mainly with monitoring for the purpose of his administration as needed so that it serves the Iraqi economy, so we follow the orbit and flotation system because of the large reserves around this flotation to stabilize the situation. We have to be in front of the waste if it does 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 the decline of the dinar and therefore are going to need more dinars to buy the same amount of the dollar, which will lead to the kind of loss or wastage. Therefore, the central bank is keen to keep the relationship free from fluctuations with the dollar whenever possible as he is keen to reduce the difference between the official price and the market price, which as mentioned should 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.
A private in the past days and siege wars there was no monetary stability due to uncontrolled release cash and therefore there were not a stable currency and dinar was always very low commodity for foreign currency. However, after the application of the new policy after 2003 has 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 scored, and we insist on its lifetime and it was the style of the auction or sale and purchase of foreign currency cash of the most important policies in this area. We also did not waste public money because we sold and received $ dinars suit sober and stable and can be converted value to the dollar at any time and 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. No we will continue to need coordination between the government and the central bank.
The dollar spending and used in the import, for example This is issue Central Bank or the auction committees where it should being pursued by the Department of Anti-Money Laundering and that is in spite of their subordination to the bank, it operationally independent and has its own law.
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