Call for the issuance of sovereign bond supports the housing sector

Call for the issuance of sovereign bond supports the housing sector

9/16/2014 0:00

BAGHDAD Mustafa al-Hashemi

Iraq has a high financial avoided extension to the international market and the issuance of sovereign bonds sold in the global financial markets to finance the deficit, but at the same time borrow locally through the sale of Treasury Notes of the Ministry of Finance to financial and banking institutions, due to the absence of a deficit in the current account balance of payments.

In this regard, said economic expert, Dr. appearance of Mohammed Saleh, said that the financing of the deficit will be from local sources first and then sprawl to global markets, noting in his speech for the (morning) that the mechanics of borrowing from the local market easier, as well as its mechanisms simplified and the possibility of control in addition to the costs soft.

He added, but the economy in general does not preclude openness to the world if there is something of a surplus in the balance of payments and a desire to defeat the purposes of the state if there is a deficit, stressing that the current account in the balance of payments does not suffer a deficit at the present time, explaining that it falls within the door of the public debt He explained that the states are calculated growth of the public debt of GDP If the growth rate of the debt and the interest of the highest economic growth, it is called fatigue religion, explaining that the global ratio of debt to GDP should be between 50 to 60 percent Ktrakm.

He continued: borrowing comes to stimulating the economy through the establishment of development projects, indicating that the incubator internal borrowing for Iraq is disabled are strong where it should be the proportion of borrowing locally larger than it is now, indicating the importance that the present state bonds for Reconstruction and Development and not merely sell remittances Alkhozana.odaa to borrow from the bond which should be an interest rate higher and for long though to be 5 years or more can also be for this bond to be sold in the Iraqi market for securities to get to the real interest rate and to find out the direction of interest rates and the benefits of the market in terms of prices.

He stressed that this bond will leverage excellent in the recruitment of high liquidity in Iraq and invest Alaktnazac rather than do the owners of buying properties outside the country or invest there can also be issuing such a bond National usefulness competitive rewarding in support of the Housing and granting the right to the owner of the bond his opponent in the Iraqi market for securities .

He said he went from a good state to launch such a bond, where it is possible to condition the banks in the event of the holder's desire to borrow them for being a sovereign assets and low risk and can activate the financial market because he supported the rights of ownership.

He pointed out that the benefit of the Ministry of Finance lacks the financial market makers, which is sufficient to issue treasury transfers by temporarily blocking the deficit in the budget, while there should be an expert to manage this process and who can find them through cooperation with the World Bank in this area.

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