Economist: Central Bank policy serves the rich and hits the poor

Economist: Central Bank policy serves the rich and hits the poor

11-10-2022

Economist - Central Bank policy serves the rich and hits the poorInformation / Baghdad..
The economic expert, Rami Jawad, analyzed the monetary policy of the Central Bank, considering that it flows into the pockets of the affluent and the wealthy class only.

Jawad said, in a Facebook post seen by / the information /, that “the policy of the Central Bank contributes to the rise in inflation rates, which reached 6%, which is a high rate, and the Central Bank did not take any measures to limit the rise in inflation, but rather its procedures for granting loans and advances and reducing the rate of Interest and the increase in cash issuance has become in the interest of the wealthy and hits middle and low income earners towards the poverty curve.”

He added, “The rise in inflation rates compared to the decrease in bank interest on deposits at less than the inflation rate means the loss of depositors in banks, because real interest rates have become less than 0%, meaning that depositors are currently losing from their balances in favor of borrowers from banks, especially large loans!!” .

He explained that “banks give annual interest on deposits at a rate ranging between (3.5% – 5%) the current inflation rate (6%), the real interest on deposits = (the interest rate minus the inflation rate) and the result is negative!! The result: every depositor is currently In banks, it loses at a rate ranging between (2.5% -1%), so borrowing at low interest in times of high inflation is considered less risky and more profitable for entrepreneurs.” finished/25h

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