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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


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I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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The central bank reveals three reasons behind the increase in its holdings of US bonds

rocky
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The central bank reveals three reasons behind the increase in its holdings of US bonds Empty The central bank reveals three reasons behind the increase in its holdings of US bonds

Post by rocky Thu 24 Nov 2022, 6:19 am

The central bank reveals three reasons behind the increase in its holdings of US bonds

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Economy News-Baghdad
The Central Bank attributed the expansion of Iraq's possession of US Treasury bonds to the increase in cash reserves, while the economic and financial advisor to the Prime Minister, Mazhar Muhammad Salih, announced that Iraq would obtain a high interest of up to 4% in the possession of those bonds.
Salih told Al-Sabah: "The foreign investment portfolio consists of Iraq's official reserves, most of which are central bank reserves, and part of them are government reserves."
He added, "This portfolio is very similar to sovereign wealth funds, especially the reserves of the central bank, and this progress appears thanks to the stability of the purchasing power of the dinar, as these reserves are usually invested in debt instruments, including debt instruments of the United States government, which are (US Treasury bonds) that bear interest." It is high, close to 4%, and is considered high, guaranteed, and highly rated, and it is part of an old policy to maximize returns through optimal management of foreign investments.
A report by the US Treasury, seen by Al-Sabah, declared that Iraq advanced two ranks among the largest foreign holders of treasury bonds, as it reached rank 32 among the 38 countries whose holdings exceed more than 32 billion dollars. a
The report added that "Iraq's possession of these bonds amounted to $36.9 billion for the month of September, an increase of 3.65% over August of 2022, and an increase of 105% over the same month of last year 2021, and it ranked fourth as the largest Arab country after Saudi Arabia, Kuwait and the UAE."
For his part, the Deputy Governor of the Central Bank, Ammar Hamad, told Al-Sabah: The increase in bond holdings is due to a number of reasons, foremost of which is the large increase in the reserves of the Central Bank, as well as the expansion of crude oil export revenues, in addition to the lack of a budget law for 2018. 2022, and thus these matters have boosted the bank's foreign reserves. ".
He added, "The mechanism for accumulating dollar revenues necessitates that all oil revenues be deposited into the central bank's account with the US Federal Reserve Bank, with the aim of ensuring the continued investment of these revenues."
He continued, "The increase in oil revenues is continuously invested in other benefits, including diversification on the basis of currencies and balancing between liquidity and the rate of accumulation is higher than the rate of return, but the rate of accumulation is higher than the rate of investment."
Hamed pointed out that “US Treasury securities have almost non-existent risks, and it is the highest liquidity tool compared to debt instruments in the world, so the Central Bank is keen to keep a large part of these securities in light of expectations that the budget law for the year 2023 will be passed soon.” As this results in the central bank facing greater requests to buy dollars from a selling window, these holdings in the currency are expected to decrease, and at that time. It is convertible, and investing in it is one of the best financial strategies that investors can follow in exchange for profitable returns that are paid to buyers in the long term.”


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Added 11/24/2022 - 9:50 AM
Updated 11/24/2022 - 2:27 PM
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