[rtl]Last Updated: Thursday, 28 September 2017 (01:00 - GMT)[You must be registered and logged in to see this link.] [/rtl][/size]
[rtl]Since 2003, the Central Bank of Iraq has persisted in pursuing two goals: controlling the dinar exchange rate and reducing inflation rates. And faced many difficulties, which were linked to political, security and economic developments. The measures established by the authorities had a profound impact on the independence and smooth functioning of the monetary authority, which hindered it from achieving its objective.
"The financial fiasco caused by political failure and economic shocks has weakened the components of GDP after speculations prevailed and production means have declined in a real economy," financial and banking expert Abdulaziz Hassoun told Al Hayat in an interview with Al Hayat.
Hassoun pointed out that «the opportunity was available when the Iraqi banking system began to build its financial entities and the development of modern banking methods using advanced banking systems, but the continued sale of foreign currency and escalated, opened the arena to speculators alone, prompting banks to engage in conversion and sale of currency and purchase, Which led to the deviation of these institutions from their objectives, and to go completely to the currency market to achieve profits without risk ». He wondered: "The central bank has turned to dealing directly with the demands of exchange and money transfer companies, which is unprecedented in central banks and banks in general."
Hassoun pointed out that the banks «started to refrain from attracting deposits, which pay interest, as they do not use deposits in the credit market, reducing the value of deposits in many banks to levels below the size of their capital, which was alerted by the Association of Iraqi private banks at the time» . The banks' financial statements "reflect a distorted picture. Credits do not account for more than a small percentage of deposits, although the bank's profits are rising to the extent that they can reach the size of their deposits." "The big imbalance occurred when banks stopped paying depositors' funds, which is the most dangerous thing that could happen in any banking system. The central bank did not move and took no action to protect the rights of depositors as determined by law, and banking administrations were not held accountable and accountable," he said.
He said that the decline in the contribution of banking and financial services in the continued GDP, "confirms that the subject has not been addressed, and that waste is continuing especially since the window of sale of the currency is still legislated and operates controls do not control the money coming out of Iraq.
He pointed out that the Governor of the Central Bank «announced a year ago to exceed the value of funds in the pockets of the public 70% of the mass of cash, and did not follow any action to modify the situation».
Hassoun confirmed that "the monetary authority can give the required guarantees by declaring itself as guarantor of deposits of the public to certain limits, and obligating banks to work mechanisms that provide guarantees corresponding to the Central Bank." He pointed out that «foreign currency in the market is the dominant power today, which requires finding means to reduce them».
He stressed that Iraq «is the only country where banks and exchange offices do not pay the value of remittances from abroad in local currency as is the case in other countries, which may help the« central bank »to balance the exchange rate, because the phenomenon of the withdrawal of funds from Iraq Linked to political and security developments. " But the continuation of the central bank to open the opportunity to transfer in front of it through the window selling foreign currency «requires a serious stop him».
He pointed out that «the rising deficit in the state budget is one of the most important facing the monetary authority, as there are signs of aggravation in the budget plan for 2018, and the central bank depleted about half of its reserves in funding the budget fields in recent years», warning that «the continuation of this approach leads to Hit the Iraqi dinar at the core, which is difficult to process the treatment ».
"The central bank was independent of the government in the first period, but when the economy faced a deficit, this independence began to decline," a responsible economic group said.
[You must be registered and logged in to see this link.]