No external conditions dictates to the international loans

allaq
Governor of the Central Bank Ali Allaq report that the bank is preparing to launch the second part of Treasury bills by $1 billion to banks.

Confirmed the absence of any “conditions” or “dictates” on Iraq by the International Monetary Fund and the World Bank on the issue of loans, explained that the hard currency reserve “comfortable and reassuring,” according to the criteria stressed Iraq ‘s success in the transition to the rank of “observer member” according to the rankings of international financial dealings after threatened with years ago by placing it in the “black list”.

Allaq in a dialogue with the “morning”, for referral of dozens of special cases of money laundering and the financing of the Terrorism on the judiciary, and this dialogue text:

* How is the stock of the Iraqi Central Bank of hard currency and what are the factors that help falling or rising?

In the beginning must know what these reserves and how their composition and the factors that lead to the rise and fall because it is very necessary in the evaluation of the reserve sites at any time, to find out the role of the central bank in this process, the foreign reserves in the bank by virtue of the Iraqi economic reality is directly linked to the basis of resources dollar derived from the export of oil, the other hand the demand for foreign currency derived from the market demand and the government sector and the process of reserve accumulation or generated, a process that take place outside the framework of the central bank, the specific component basis for this process is the unilateral economy For Iraq does not issue non – oil and there are no things possible to be generated or foreign currency augmented, besides the dollar remittances go from the inside out due to migration, displacement, study, treatment and other, so the focus on the central bank in this issue lacks precision, the Bank the fact that It creates supply or demand because the two components are controlled with two reserves outside the framework of the Central Bank.
Cash reserve As for the reserves of hard currency. The bank despite the decline in oil resources by up to 70 percent and thus lower dollar revenues by 70 percent, it managed to maintain foreign reserves level acceptable currency within the international standards, as the basic criterion for the adequacy of the reserve is local currency covered; the sense of how much we have dinar and the corresponding dollar, is now to reserve the existing amount exceeds the amount of local currency in Iraqi dinars, it is within the standard for the admissibility of this reserve, Iraq is still within the IMF International reserves “comfortable and reassuring,” the IMF by virtue of preparing the credit agreement is the process of calculating this reserve periodically, another study of the fund presented according reading reserve adequate from now to 2021, indicate that the reserve will remain acceptable and reassuring level. The reserve in the daily change and ranges between $47 billion and $49 billion higher than the level of the reserve for the year 2016, so the extent of the ability of this reserve that remains acceptable level depends largely on oil prices, which now undergoing a slight improvement which is better than in 2016, so we do not feel concerned about this reserve within the existing indicators, which helps to maintain the reserve also reduce the demand for the dollar, which requires reducing consumer spending by the government, as well as reducing the deficit in the state budget, because there is an inverse relationship between the budget deficit The reserve, the more it affected reserve, so we if we want to measure the level of decline in the reserve, we will see that asymptotic deficit, which was financed by the Central Bank, so we draw an invitation to the government and the House of Representatives and to all those who worry about foreign currency reserves to say where that (the matter in your hands and not in the hands of the Central bank) because whenever the budget had biggest deficit there was a direct impact on the foreign currency reserves.

Loans and Benefits
* There are some politicians in Iraq to resort to international organizations to borrow to overcome its crisis, stressing that this matter hurt Iraq in the future?

Iraq from contributing countries since the beginning of the International Monetary Fund and the World Bank, repaid over all these years, annual subscriptions like other countries as a member of rights in the IMF and the World Bank as any of the States that are exposed to financial difficulties or financial difficulty have the right to get the facilities support, loans than can be submitted to the country, therefore may be surprised sometimes by criticism directed to Iraq for these organizations to obtain this support, the fact that the right must take it in exchange for our contributions and the amounts paid to these parties, the second issue is that the IMF is checker for international economies of countries and indicators that are reflected in reports on these very important countries for direct impact on the financial and economic relations with the countries of the world financial organizations, banks and international banks; therefore we must have careful harmony with what shown by these indicators or requirements, because they give the green light to the position of a proper state, thus obtaining facilities, grants and other financial transactions.
Many people seem to think that there ‘s dictates and conditions of these organizations, this is not true because the nature of the facilities and loans provided by the Worldbank and the International Monetary Fund, which take into account the financial situation of the country in terms of repayments, interest rates are very low up to one and a half percent for many years, with the decline in oil revenues and under conditions faced by the country of displaced military expenditures and many requirements linked to this side, no doubt make Iraq needs external funding to meet the shortfall, the program is subject to Iraq to finance this year and the next two years up to $15 billion, even Iraq gets this funding, The International Monetary Fund is issuing reports on the commitment of the country ‘s financial, economic and monetary plan, because it can not be the organization which is paid money from contributions by States to grant such money if there is a case of a financial breakdown of or the absence of control over expenditure and maximize revenue and is fully consistent with the reform plan presented by the government, which aims to reduce unnecessary expenses and increase other non – oil revenues.
Some believe that the IMF has been pushing for affecting the expenses pertaining to the community and this is not true, but on the contrary, the IMF proves reservation if the social expenses such as health, education and social protection network and the ration card and other social necessary expenses not spent allocated public budget of State on these areas, many aspects of the economic and financial reform of the Fund in line with the government’s reform plan, the next term will see the launch of loans and aid larger and in accordance with the second revision now taking place in Washington completed the end of this month in Amman, The fund was a positive report will give the green light to new batches released soon.

Treasury bills
* Does Iraq present the second part of the treasury bonds, international banks, and the amount of the amount of such bonds?

Bonds that were guaranteed by the US government raised and sold by $1 billion, this guarantee has helped to reduce the interest rate to about 2 percent, or a little over that, Iraq has the intention of offering another billion and this was the goal from the beginning, according to the budget law that raises two billion dollars, In order not to be interest high cost guaranteed US 1 billion dollars to be a billion other interest – bearing market combines with other interest, so that the average of two billion up to five percent, this helped the rate cut and now work is underway on the configuration to put these bonds to international banks.

Money laundering
* You embarked on since the assumption of your office to activate the Anti – Money Laundering Office and the financing of terrorism is achieved by this office to now?

The fight against money laundering and the financing of terrorism Office granted special attention and provided the resources, independent budget and financial administrative independence, the office needs long time to build its capacity to exercise its role, but within the last term was able to accomplish many of the aspects required by the process both by issuing regulations and legislation, for the first time in the history of Iraq has been issuing regulations for each segment starting from stockbrokers and gold traders, accountants, lawyers, insurance companies, banks and all sectors related to the subject of money laundering because it is a multi – structured must be integrated with each to give required, in this aspect has been completed Anti – Money Laundering Law No. 39 of 2015, the latest laws responds to all international testing requirements have been direct coordination with these organizations and in the light of which all have been issuing regulations on this side of the legislative or legal basis.
In the practical side; the central bank anti – money laundering law has the rules of executive process within the banks, which are the cornerstone of this framework, for the first time happens that the central bank committed banks by developing units to combat money laundering in each bank units and risk management units for the management of compliance was actually formed in all banks with the support of the Central Bank for the training and rehabilitation of work concerned, for the first time is also the base principle of “know Your Customer” in the banks, which represent the cornerstone of knowledge of sources of funds to detect any suspicious operations by comparing the company through the application of Funds that deal or deposited in banks between real activity and the nature of its work, will be followed up and monitor this principle carefully now by examining the forms in the banks by the Central Bank, any suspicions regarding this matter shall be referred to the judiciary committees or relevant Central bank sanctions.
The fight against money laundering and the financing of terrorism office is the first of its kind in Iraq, it has become a producer of issues bearing suspicions of money laundering and referred to the judiciary, there are dozens of cases have been referred last term on the judiciary and the Department which the provisions were issued and the Department is still in the courts, included various people, the legal nature requires “confidential” work of this office, that access issues are not published or because the nature “very secret” in this context, even the office has its specificity and independent place, the central bank does not have access to the details of the issues, the success of the office indicators that monitor by an international organization concerned with this the passed the International Labor Organization, which monitors states and the extent of its commitment to the terms of the organization and rules of anti – money laundering.
When we received the responsibility of the Central Bank of Iraq was about to be placed in the “black list” This was a great danger of the country ‘s vulnerability to the international ban on financial transactions, follow – up to the International Labor Organization of the measures that we have undertaken within the framework of the Central Bank and the Office of the Anti – Money Laundering to abide by the rules and regulations required applications, we were able to remove Iraq even from the “gray area” and we came now to “follow – up area”, if passed this stage we become full member and there is no problem, now the follow – up process taking place normally, reports the organization points to progress Great commitment to winning Iraq ‘s requirements, rules and standards that have been developed in this framework.
The theme of the fight against money laundering requires concerted multilateral efforts, central bank and banks are a ring of these rings, so to establish “anti – money laundering and the financing of terrorism, the Council” which is stated in Law No. 39, which includes all stakeholders in this matter and its meetings are continuing to coordinate efforts in this framework between the security and intelligence, regulatory and judicial authorities and the ministries concerned, that the Council is important and is now working on a national strategy to combat money laundering and the financing of terrorism, will be the first in the history of Iraq, that it needs a long time to prepare all episodes related to it because the issue of money goes through various stages, therefore must abide by all these loops rules and regulations, began these workshops provide documents and reports from various segments and all money transfer from stage to stage operations.

Refund
* What steps Iraq to recover the money smuggled the dictatorial regime and the money that fled after 2003?

There are two circles responsible are the basis for the recovery of Iraq ‘s money whether related to the former system or after 2003, specializes in the Ministry of Finance to recover funds smuggled the former regime, while concerned with integrity money smuggled body after the 2003 corruption and others, this effort is still modest and needs a lot of work, the foundation of which must be from which this work is to provide the framework of a judicial legal cooperation between Iraq and other countries, Without an agreement for this cooperation is difficult to get information or prosecution of money, secondly must provide complete documentation and conditions recovery files to be submitted For other countries, as it is not just enough to simply request information or inform, because the file must be integrated, and frankly, this effort is long overdue and remains modest and needs a lot of coordination and provide the legal framework and the signing of agreements with other countries that are suspected or which send the money back to Iraq.

 

alsabaah

Central Bank announces decline in “money laundering” operations in Iraq

launder
Central bank on Tuesday, revealed the decline in money laundering operations, for several reasons including: the monetary system, the training of bank personnel, the withdrawal of licenses a number of exchange companies, as well as international cooperation to limit money laundering.

The central bank adviser Walid Idi, told “Tomorrow Press,” that “the Iraqi Central Bank monitors extensively precautionary measures on anti – money laundering and the financing of terrorism file as a scourge which must be combated,” pointing out that “there is international cooperation wide on the fight against laundering money and the financing of terrorism in Iraq at the world level.”

He added that “the nature of the Iraqi regime (cash), so we find that the volume of money laundering few compared with other countries.”

He said the “central bank in cooperation with the path of the banking sector employees to combat money laundering and the financing of terrorism, as the banking sector is the biggest target of these operations.”

He stressed that “the central bank to withdraw licenses of exchange companies located in the areas of conflict, for fear of its operations for the financing of terrorists, which in turn cut the road in front of them.”

The House of Representatives had voted, during its meeting held on 23 (16 September 2015), under the chairmanship of Vice – President of the Council Hamoudi and the presence of 195 deputies, the draft Anti – Money Laundering and Terrorist Financing Act.

 

Alghad Press

Abadi’s financial adviser criticizes calls to cut the dinar and warns of the effects

saleh
Mohammed Saleh, financial adviser to Prime Minister Haider Abadi, criticized on Friday, calls to reduce the value of the Iraqi dinar against the US dollar, stressing that such a step will lead to three crises.

Saleh said in a statement Alsumaria News received a copy of it, “There are parties and personalities working unfortunately, to promote the idea of ​​deterioration of the exchange rate of the Iraqi dinar and bring about a deterioration in the standard of living and hit stability in order to impose a monetary tax urgently affecting all segments of the people, which is inflation, and the creation of a deliberate deterioration of the level of Living in order to fill the state some of its deficit without thinking about the management of revenues from outside the oil revenues, “noting that” the devaluation of the Iraqi currency through the reduction of the exchange rate of the dinar against the dollar, for example, will add destructive consequences in a negative impact of deepening the financial crisis, A new crisis of inflation General level of prices and inevitably generates inflationary recession, which exacerbates the general economic situation and common discontent is intended at the time of fighting the war on terror, and we desperately need the elements of economic stability.”

Saleh added that “the country will enter here with three crises, a financial crisis is not solved by rapid monetary policy methods such as reducing the exchange rate of the Iraqi dinar as the dollar campaign and the dollar-dollar pioneers and the rich who are fighting the people and the misery of the poor and low-income,” noting that “the second crisis is inflation prices and the deterioration caused by the deterioration of stability over the foreign currency and reduce the purchasing power of pensions and incomes of citizens exchange rate because of inflationary expectations and broadcast state of uncertainty and lack of confidence in Iraqi dinars economic stability.”

He explained that “the third crisis will be security because of terrorism and the war on the oppressor, the loser is the people and the winner of the devaluation of the dinar are the rich dollar and terrorism, do not forget that inflation in the regions and the rise of inflation rates there to 3 decimal places and the deterioration of the standard of living has accelerated victory over stability The standard of living in the rest of Iraq, which is the smart economic war practiced by the economic leadership in achieving the urgent victory. “He pointed out that” the government reduced its non-essential expenses and absurd and frivolous, but did not exercise austerity policy such as reduced salaries, pensions or welfare and expenses of War and the necessary investment process.”

“The internal and external borrowing process to finance the budget deficit is not a deflationary process, as some claim, it is a stimulus and expansionary process that fights deflation. Deflationary budgets that lead to economic stagnation are usually those in which the budget is balanced by a lower level of expenditure, budgets contractionary really, but budgets that build on the deficit is financed the deficit by borrowing are the budgets of the expansive nature, especially the current financial policy in Iraq, “asserting that” internal borrowing came in accordance with the vision of monetizing the debt often, any financing a debt by expanding cash relatively basis, not vice versa, either external borrowing same applies like any other external resources in revenues of oil, in terms of impact expansion to account falling on public spending and the money supply expansion according to known to specialists in monetary policy mechanisms external flows.”

“The promotion of controversial economic issues in the time of war and the victory over terrorism is a miserable attempt by a group of detractors who want to weaken the state and spread despair,” adding that “there is a process of programmed ignorance of the Iraqi street to dispel despair, promoted forces driven by suspicious negative in the positive financial conditions is a victory and get out of the neck of the bottle, as well as the military victory and liberating the land and man from the clutches of terrorism.”

 

Alsumaria.tv

Floating currency

currency
Flotation is leaving the exchange rate of a currency, any equivalence with other currencies, is determined according to the forces of supply and demand in the cash market.

The different governments’ policies towards their currencies float according to the level of emancipation of the national economy, and the adequacy of its performance, and the flexibility of its production apparatus. It is divided into the following floating formats:

Free float: it means leaving the currency exchange rate changes is determined freely with time, according to market forces, and only the intervention of monetary authorities to influence the speed of change in the exchange rate, not reducing that change, and follows this form of currency float in some advanced industrial capitalist countries such as the US dollar The pound sterling and the Swiss franc.

Flotation orbit: it means leaving the exchange rate is determined according to supply and demand with the resort’s central bank to whenever the need arises to modify this price in exchange for the rest of the currency intervention, in response to a set of indicators such as the amount of the gap between supply and Tlpfi exchange market, and the prices of spot and forward exchange, and developments in the parallel exchange rate markets, and follows this form of floating in some capitalist countries and a group of developing countries, which pegs its currency to the US dollar exchange rate or the pound sterling or the French franc (previously) or a basket of currencies. Flotation policy has evolved to become one of the most important tools used by the monetary authorities to achieve economic goals, and the exercise of this policy intervention procedures including: the impact on the money market by influencing the movements of supply and demand, through the local currency selling or buying, influencing the interest rate to raise the price of discount or decrease. Impact on the volume of foreign trade through the quantification of import or export promotion.

 

al nujaba tv

Float the dinar is the solution to save foreign exchange reserves

money
Officials and experts used by economists and even ordinary citizens in recent years to drive a alarm to warn of Iraq’s reserves of hard currency decline.

Another statement in this regard was the Governor of the Central Bank of Iraq Ali Allaq, who confirmed three months that the balance of foreign reserves of $49 billion before. This is the foreign currency balance has dropped by more than a third compared to the highest level reached in mid-2014 when a record record of $77 billion. This clearly indicates the existence of a serious structural imbalance in the balance of payments can not be resolved by administrative decisions easy, especially indicators suggest that the continued depletion of foreign exchange reserves in Iraq in the short and medium levels.

All this threatens to increase the pressure on the national currency and shed more doubts about the country’s ability to finance imports and investments required.

Everyone agrees on the reasons for the sharp decline in foreign reserves, consisting primarily of American and European treasury bonds, in addition to cash balances in currencies the dollar and the euro and the pound sterling gold and alloy, with two no different that the decisive factor behind this crisis is the collapse of oil prices since June 2014. It is true that prices recovered relatively late in the year 2016 after the OPEC and Russia’s decision to reduce production rates, but the return of black gold prices to previous levels remains a distant dream in the light of the continuing surplus in supply in the foreseeable future. From here it may not count on a substantial rise in imminent price.

But there is another reason for the problem lies in the low interest rates on a global level, which also means the Central Bank of Iraq for less on the US and European bonds and on foreign currency balances in foreign banks, which make up the lion’s share of foreign Iraq reserves financial return.

Versus quasi-consensus on the causes, there are significant differences in the proposed solutions to the crisis of the collapse of the foreign exchange reserves. Most of the members of the Economic Committee in the House of Representatives and many of those interested in economic affairs focus on the fight against money laundering and what they call the “smuggling” hard currency and the black market and criticism of the currency auction of the central bank and even claim to stop it under the pretext of the existence of suspicion of corruption in the sale of dollars to private banks and corporate banking.

Some also suggested charging for hard currency transfer abroad. Some even go to the call for an end to the monopoly of foreign currency by the state and the prohibition of dealing citizens and their own companies.

Certainly the anti-money laundering and smuggling and corruption potential remains an important and pressing issue, regardless of the size of a reserve currency. In this regard, there must be laws on the central bank and other organs of the state strictly applied. But the legitimacy of these measures do not justify the call for the imposition of arbitrary administrative restrictions on dealing in hard currency and look to the dollar and the euro as if it may not be safeguarded or touched. The claim for a state monopoly on foreign currencies to say the least for which it is an essential feature of the totalitarian systems.

Hitler and Stalin has entered the history of the economy as the first dish of this monopoly as a principle in a permanent economic policy. After turning this principle into mainstream policy in the socialist countries and in developing countries that have followed the strategy of the dominance of the public sector. As usual, “excelled” tyrant Saddam Hussein to tighten control over foreign currency in the country until it became already monopolized by him and members of his family and those close to him.

Not limited to the results of these sterile on the black market recovery only and the collapse of the Iraqi dinar and the deepening of imbalances in the distribution of income policy, but also produced manifestations of social behaviors and harmful. There is no doubt that many of the Iraqis remember how it was some foreign and Iraqi expatriates are acting during the period of the siege as if they were “kings” just because they have a few hundred dollars.

In short, it can be said that recourse to administrative procedures to impose arbitrary restrictions on dealing in hard currency and on the operations of conversion and other measures “easy” will not solve the problem of the depletion of foreign exchange reserves, but will lead to the opposite effect of declining confidence in the national currency and fueling speculation and black market direct and harming the interests of citizens and restrictions on their freedom to travel, treatment and study abroad, and others.

The solution to the problem of the serious decline in hard currency reserves requires primarily economic and not administrative procedures, particularly the implementation of difficult reforms in the area of ​​the exchange rate and the activation of the customs tax. It is quite clear that the value of the Iraqi dinar against the dollar after 2014 became exaggerated under the new circumstances resulting from the continued decline in oil prices.

However, the central bank did not move and settled only by reducing the value of the Iraqi dinar in late 2015 by a small percentage did not exceed 2%. A slight reduction of not commensurate with the financial and economic variables of the country.

It is clear that the central bank adheres to a policy of fixed exchange rate peg to the dollar. If this policy is necessary and justified after 2003, and succeeded in establishing the necessary monetary stability to the process of development, cling to at the end of the Iraqi economy does not help in the long term. It seems that the central bank’s reluctance to adopt flexibility in the exchange rate reflects the fear of potential political and social costs of the devaluation of the dinar against other currencies and the expected rise in the prices of imported goods.

On the other hand, this frequency confirms fears of circumventing the central bank’s independence is constitutionally installed and the increasing dependence of the government, especially after the overthrow of the former leadership of the bank, headed by Sinan Shabibi based on trumped-up charges of corruption and malicious.

But this situation will not serve to maintain monetary stability, which currently requires taking decisive and bold action, first and foremost a clear reduction in the dinar exchange rate. Can such a move that “phishing” more than a bird with one stone: First, reduce the demand for hard currency and on imported goods, and secondly: to improve the competitiveness of domestic production, and the Third: The state budget revenues and thus reduce the fiscal deficit.

This is confirmed by the experiences of several countries, including Russia and Egypt. In 2014 Russia entered into a very critical situation as a result of the collapse of oil prices and the West to impose economic sanctions right. However, the expectations of the collapse of the Russian economy did not materialize. Thanks primarily to find a certain correlation between the Russian ruble exchange rates and global oil price.

It is true that this has led to the loss of the ruble for more than half of its value against the dollar in 2015, but at the same time gave a semblance of stability on the price of oil in rubles and thus prevented the erosion of state revenue. This was not possible without the feet of the Central Bank of the Russian ruble to float in November, 2014.

A positive experience similar to that provided by Egypt are the other taken in late 2016 to float the pound. Despite the controversy over the impact on the lives of the Egyptian citizen, this was a difficult decision behind the registration of successive rises in Egypt’s foreign exchange reserves.

Will be said, of course, Russia and Egypt, the circumstances are different from Iraq, and this is the word of self-evident does not offer nor delay because each country’s circumstances are different from another country, but that does not prevent the benefit from the experiences of other countries, especially Russia, like Iraq, is primarily dependent on the sources of exports energy.

The conditions experienced by the Iraqi economy imposed on the central bank to move and pursue a flexible policy on the exchange rate as a prelude to float the dinar against other currencies in the medium term.

Here it can resort to what it claims directed Managed Floating float which allows the central bank to intervene to prevent a sharp and dangerous fluctuations in the dinar exchange rate.

As an attempt to solve the problem of Iraq’s reserves decline of foreign exchange by instant decisions “easy”, it will only mean adventure and perpetuate the generation of other crises.

 

al nujaba tv

Iraqi foreign currency reserves on increase

dollar
Iraqi Central Bank Governor Ali al-Alaq disclosed that the bank’s foreign currency reserve increased in comparison to 2016 to reach 49 billion dollars.

In a statement, the CBI pointed that “despite the decline in oil prices by 70%, the bank was able to preserve its foreign currency reserves to the international standards; namely to cover the local currency with the dollar.

 

Iraq TradeLink News Agency

International Development Bank gets a membership license for the company MasterCard Global

mastercard
International Development Bank on Thursday signed a contract granting basic membership license to the company MasterCard Worldwide, in the Baghdad ceremony.

Chairman of the Development Bank management Ziad Khalaf in his speech during the signing ceremony attended by “Economy News,” We look forward through this partnership with international institutions, the advancement of the reality of the Iraqi banking and the introduction of the latest banking electronics and provide the best services to our customers in accordance with the mechanisms and standards that set by the Central Bank of Iraq.

He added that the bank received the e-card license in 2016 according to the requirements of the Central Bank, adding that our bank is ready to cooperate with banks to serve the banking technology revolution and create new services for introducing them into the work of the banking system.

Ziad noted that the Development Bank was able to acquire a significant share of the total domestic trade and banking market through the presence of a wide branch network of 13 branches and covers most of the major provinces in Iraq, including the Kurdistan region.

For his part, General Manager of MasterCard in the Middle East, Mohammed Basil Hill, spoke about the advantages of the card where is considered your key to the world and provide the balance of a ceiling of credit is high and strongly exceptional and provide the best services and international and domestic discounts for users of MasterCard, adding that the customer after receiving the card can take advantage of them in his daily work from travel bookings and offers shopping and entertainment around the world as well as provide special features for the business of hotel reservations, tourist and discounts for purchases and offers exclusive travel to luxury resorts around the world.

Meanwhile, Executive Director of the Association of Private Banks Ali Tariq, stressed that the private banks access and use of modern banking technologies and introducing them into the banking business, noting that the move is a great banker achievement for the development of the banking business and the introduction of modern technology to serve customers.

He noted that the Central Bank of Iraq and the Association of Private banks are keen to encourage banks to use modern technology to keep pace with progress in other foreign banks.

 

Economy News Agency