Central Bank Governor: No plans to cancel the sale of currency window
Central Bank Governor: No plans to cancel the sale of currency window
BAGHDAD / Tariq al – Araji ,
said Governor of the Central Bank on the Keywords there is currently no intention to cancel the sale of currency window.
Keywords and said in the interview with »Sabah» Dialogue: The «subject to delete the zeros still exists and its implementation requires security and political stability of the country», declaring the quest to combat money laundering operations.
The following is the text of the interview: * There is a delay in the launch of private contractors and farmers Treasury bonds, what are the reasons for this delay?
Sticky Treasury bonds a negative impact only on the work environment in general and the considerable social repercussions and the position of the central bank was the starting point of secretions and gravity, and Not surprisingly been floated the idea of issuing Treasury bonds, as the central bank deduction to solve the problem and pay eligible rights of contractors and farmers.
This initiative large from the central bank, because it is related to the agricultural sector , which needs a lot of support and care, especially after the recent years have witnessed significant growth producing some crops, particularly wheat and barley, and also for the construction sector , which is the sector is very important and has a major role in moving the economy labor and others, so the central bank put all the procedures for the extradition of these amounts of direct and has actually after that decision was made by the cabinet the need to review and audit files in this matter before discharge to the emergence of some problems and inaccurate statements Vaclav Supreme audit reviewed the matter, as the head of the censorship financial aware of the importance and seriousness of this issue and ridiculed to great lengths to get the job done, but the problem is by providing data and information required by some quarters, particularly the provinces and the decision was to kind of unfairness or favoritism irrespective amounts do not happen and that launches a full after the completion of audits for fear of affecting operations.
It is also no idea to approach the International Monetary Fund to release the amounts of the transactions completed and depending on the course of events and based on the lag happening in some institutions, there are also differences in some of them will take much longer, so the Chief of Staff in the process of moving on the idea at all of the transactions completed and will be our conversation with the Finance Ministry in this regard that in turn , will talk with the international Monetary Fund to activate it.
Q : What is the extent of coordination between the central bank and the Financial Inspection Office and the Finance Ministry regarding the shared files?
There are a lot of coordination regarding the reforms with the Ministry of Finance and the Office of Financial Supervision required Iraqis before they are international, which is evident in the government ‘s reform program put forward by .. Many of these themes require a joint effort between multiple institutions, especially the Central Bank as the role of leverage of the situation in general, during the year 2016 acted as liquidity support and the Treasury in amounts of up to 20 trillion dinars and the central bank as an adviser and financial agent of the government plays an important role in expressing their views and to participate discussions on some of the financial reforms, especially in the framework of the pressure of costs and increase revenue and the central bank as probes the national economy as a deal with the core of the Iraqi economy problem , which is the weakness of the productive base or weakness of the real sectors of the economy, and today the Iraqi economy is facing a very negative fact is that the government is pumping money from oil revenues for the salaries and expenses of the turn to imports develop the economies of other countries and the Iraqi economy stays down and it is capable of running the citizens and to create real economic growth.
All these things have encouraged the central bank to launch an initiative for the granting of industrial, agricultural and real estate loans a big and serious attempt to contribute to stimulate growth in the real sectors to create a productive and economic base helps run manpower, and there are multiple orientations of reform on the economic side, so it was forming a joint council to coordinate fiscal policies and cash between the bank and finance ministry have its members specialists from both sides.
* There are those who call to cancel the sale window of the currency by the central bank. What do you think of these
For window sell the currency they receive notes, it requires a deeper understanding of this process, because it stems from the deficiency, because the sale of foreign currency governed by the laws and considerations related to monetary and fiscal policy of the Central Bank, as proceed from the legal framework, law of the Central Bank states that the bank sells the currency foreign sales simple unconditional and unrestricted Besides the IMF, Iraq agreement which as signed to join in 2008 by these countries committed not to put restrictions on the sale of currency, and the second point is monetary policy that require follow the requirements for this method because the nature of the Iraqi economy dependent on oil revenues, the dollar and the expenses of the government in dinars, Treasury Department convert dollar the central bank to get the dinar because most of its expenses in dinars Bank is the process of taking the dinar from the market by buying dollars to be delivered to the Ministry of Finance .. We are surprised to invite others to the failure of the Central Bank this and the closure of the window , which means closing «tsunami» occurrence hits the Iraqi economy and hits the currency, this means that the Ministry of Finance pumps dinars, and there is no mechanism to control the money supply and absorbed, and other alternative from the window that the central bank when the dollars received the print dinars annually by the budget and deliver to the Finance Ministry , which in turn pumped the market, meaning that it will plunge the currency market at a price collapse of the dinar, as happened during the rule of the former regime.
The process of selling the dollar by the central bank is the process of sterilization, window sell the currency is not an option for the bank it is a legal issue relates to monetary policy requirements if the bank withheld for this collapse of the Iraqi dinar, because the dollar source in the Iraqi government, if the government grabbed the dollar and Ahjpt for sale means that the dinar Iraq will collapse, and the fact that the government when dispensing any dinars like really gave the citizen replace dollar or goods interview .. and some wonder why are not central banks in other countries in this process? .. the issue is quite different, as the countries that have the resources in dollars as a result of tourism and exports investment or transfer residents from the outside to the inside of the Central Bank which does not need to interfere with the presence of dollars in the market, there is supply and demand organize itself and interfere central bank when there becomes a disruption of the relationship between the local currency and exotic price, and when a shortage occurs or increase the either buy or sales in this located where the dollars the central bank States does not intervene and does not need to retain dollar, so we see a major advanced industrial nations reserve has a simple, because it does not need a sales process, therefore this understanding is not available, and today the money supply in the volume of currency is estimated 43 trillion dinars and if these amounts remained swells does not have the tools absorbed «tsunami» happen gripping situation.
* Why did not provide Iraq to ask foreign bonds?
Foreign bonds were unavailable for Iraq, because the bonds when issued depends on the credit rating or a sovereign and classification of Iraq is still without tempting level for the market of global securities, so the required interest rates are high and we tried last year as it went delegations to market foreign securities and the percentage of interest rate of 11 percent, the central bank has agreed to buy money orders, because the cost of foreign bonds are high .. now with the guarantee of US government bonds and there are preliminary approval and will decrease interest rates for up to 3 percent or less of the presence of international confidence, because these guaranteed bonds bonds about mostly do not exceed their usefulness 3 percent , and the planned launch of two billion dollars and there contacts between the American side and the Central Bank and Ministry of Finance, among other things, and we have some of the requirements and got approval in principle that was announced a few days ago, and if it gets final approval will be offered two billion dollars and to ensure that the bond raised by the United States , one billion dollars, and originally it was the international Monetary Fund during the initial review of the agreement with them when issuing his report positively on Iraq, because the IMF ‘s external auditor for the economies of all nations as it has been to give Iraq a positive report encourages States to provide facilities, loans or grants . Everyone was waiting Fund report cash and began moving these parties, the value of loans , ranging from 15 to 18 billion dollars over three years.
* What is the central bank ‘s anti – money laundering measures?
Sell the currency process is not a problem, but the problem in money laundering they are not , as some imagine it ‘s a waste of public money, the contrary is the source of public money, and not a negative process, and every citizen in accordance with all legal data and economic system of the right to convert the dinar to the dollar and I can not be faulted the problem in the window to check the legality of the money was non – existent and the dinar , which has been buying dollars by action, is Checked and legitimate or derived from crime, corruption or money laundering, narcotics, and other exaggeration, and this is the weak point, and the central bank distancing himself away on the subject of the fight against money laundering, and the previous administration it emphasizes that this is not the responsibility of the central bank, but we believe it is the responsibility of the central bank, because the anti – money laundering law assigned the bank, and therefore has been taking effective measures through activating the role of anti – money laundering office, and we have this role and its curve financial and administrative independence and space, nor the bank intervenes in his work, and building on the new anti – money laundering law have issued regulations to all parties and institutions concerned to comply with anti – money laundering and the central bank last part the subject.
The fight against money laundering must control all the other episodes of the brokers and traders of gold and antiquities , and banks and financial institutions, accountants, lawyers, corporate lawyers and the stock market, because the movement of money laundering are complex, he for the first time on Iraq has the assignment of cases involving charges of money laundering after a Court Council competent in this field as well as forcing banks units be created to inform competent, and put strict rules for to verify the identity of customers and the sources of their money, as applied accurately and made it a standard of entry to the window to buy the dollar standard, meaning connecting process between the two things have become and this is what we want access to him and we were able to link the process purchase between the dinar and the dollar in terms of the source of the dinar through Make sure the bank from the customer ‘s identity and the legitimacy of the money by providing documents that confirm the legality of the amounts, and because of these measures and others turning Iraq internationally gray area to the white area after we threatened to turn to the black in international transactions and this category came by the organization concerned and called the «FATF» specialized money laundering and financing of terrorism , one of the classified State and give signals .. and put a set of regulations and programs in coordination with international organizations and the US Treasury to control the operations and today every dollar paper sold by the central bank recorded program through the number could be traced.
Q : What is the amount of central bank reserves. Wayne arrived the subject of deleting the zeros?
For the reserve is not measured by the naked figures, but measured in local mass dinar, and this figure within the international standards also Bhsabatna with the International Monetary Fund, which prepared one of the most important interests control the reserves and measured, and the latest revision of the International Monetary Fund, has shown that the reserves of Iraq from now until 2021 is not there is a risk it, and within the accounts of the Fund at the end of 2016 the reserve than the amount the IMF about 9 to $ 10 billion, and that the subject of deleted technically zeroes exist, but need to stabilize the situation in the country, because the currency drag and change needs to be an administrative stability