Iraq's Reserves Of Foreign Exchange and What It Means For The Life Of The Citizen
Sunday September 29, 2013
The Central Bank of Iraq, as in other countries of the world, the management of the national currency and maintain the value and size of rolling them.
The central bank also oversees the commercial banking system. Unlike the Commercial Bank, the central bank has a monopoly to increase the money supply in the country or be reduced, which is that prints paper currency and metal coin.
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The central bank controls the quantity of money supply through mechanisms such as setting interest rates and be the last resort to support the banking sector in troubled times and financial crises.
One of the main functions of the central bank to maintain the value of the national currency and protect it from fluctuations.
The central bank is keen to provide cover for the national currency to build the country's reserves of foreign exchange and gold, for example.
It is said that the Iraqi Central Bank as an institution generally succeeded in this task so that the level of efficiency that is almost an island in a sea of inefficiency compared with other institutions, service or productivity.
The central bank maintained at this level, although he suffered tremors before the period and attempts to undermine its independence. The bank recently announced that Iraq's reserves of gold and foreign exchange amounted to about $ 80 billion, compared with approximately $ 74 billion in June.
The governor of the Central Bank and Abdul Basit Turki agency in an interview that this increase is due to the high price of oil in world markets expected to increase reserves in the coming months as well.
Radio Free Iraq met a former adviser to the Central Bank of Iraq the appearance of Mohammed Saleh, what this means the size of the cash reserve pointed out that sovereign wealth offer strong protection for the Iraqi dinar as well as securing months import of approximately 12 months, compared with 6 months in the past, but this extreme importance if we know that Iraq imports almost everything.
He predicted a former adviser to the central bank that reflected such a strong cover provided by foreign exchange reserves of the national currency in the high purchasing power of the Iraqi dinar.
A member of the parliamentary economic committee Mahma Khalil noted that the Iraqi incremental backup by building a basket of foreign currencies and gold as well as an investment portfolio of Iraqi assets in important financial centers such as London, Paris and New York means the success of the monetary policy pursued by the central bank.
He predicted MP Mahmh Khalil to rise the value of the national currency result of the accumulation balance sovereign so that the Iraqi dinar equivalent to the U.S. dollar within the next four years (where Iraq plans to increase its oil production to 8 million barrels per day by the year 1917, as noted by the Economic Committee of Parliament.
Khalil stressed Mahmh of the importance of retaining CBI the monetary policy in order to continue sound calling on the government to stop its attempts to interfere in the bank's policy, especially as the same constitution guarantees his independence.
Financial expert Majid picture cautioned that the presence of large reserves of foreign exchange alone is not enough to maintain the value of the national currency affected by external factors such as the volatility of oil prices,
which sells for Iraq and the prices of goods imported by, and another internal in the forefront of the security situation and consumerism with government and private sector together to expense synergies product. [b]
With regard to the living conditions of the citizens, the Reserve large foreign exchange means what it's supposed stability of consumer prices, but parasites exploit usually the deteriorating security situation and political instability and ignorance dealers dinar and the dollar to increase prices under various pretexts), as noted financial expert Majid picture.
Expected and the U.S. Agency for International Development late last year that leads the Iraqi economy, the economies of other Arab countries in the next five years.
Contributed to file a reporter with Radio Free Iraq in Baghdad, Ghassan Ali LINK