Assessment of monetary policy of the Central Bank

Text of the study presented to the President and members of the House of Representatives on Braaracaan assessment of monetary policy of the Central Bank

Date: Monday 09/17/2012 03:51 pm

Technical note on the Central Bank of Iraq from a group of experts network Iraqi economists to the Presidency and members of the House of Representatives Distinguished text detailed study submitted to the President and members of the Iraqi Council of Representatives distinguished on the assessment of economists and Iraqi experts of monetary policies of the Central Bank of Iraq and a brief executive – exposed the central bank, governor Dr. Sinan Shabibi and some of his staff of experienced professionals, to unfair campaigns for professional work and their performance and they want to Tatherma on the bank’s success in completing his basic legal text by the Central Bank Act 2004. I received the conservative leadership of the bank and Iraq shackled external debt estimated at 140-130 billion dollars and our national currency collapsed. The inflation rate was 27% in 2004 and Iraq’s economy bankrupt all the international economic standards. Today, latest figures show remarkable achievements achieved by the monetary policy of the Central Bank, in collaboration with the fiscal policy, falling external debt of Iraq to about 61.2 billion dollars, which is less than half what it was in 2003. The foreign reserves of the Bank has reached about 65 billion dinars, which strengthened the position of the Iraqi economy in international financial markets. As a result ease financial predicament International to Iraq, has increased the confidence of citizens Bidinarna Iraqi boosted its exchange rate against the dollar and other foreign currencies, after the exchange rate was in June 2003 for each one dollar 1459 Iraqi dinars متحسنا than 3500 dinars in April of the same year, which reflects the yourselves after market expectations at the time about the possibility of a breakthrough economic conditions and livelihood crises to improve the dinar exchange rate, swung this exchange rate against the dollar to $ 1479 dinars in January 2006 and then to settle to 1272 dinars in December 2008 until he settled with 1170 dinars during 2009-2011. And led this relative stability to absorb a lot of the inflationary pressures arising from the importation of goods and services from abroad, but he did not contribute enough to stimulate economic activity in agriculture and industry. That was the last the inevitable result of the tariff policy, which encouraged the influx of cheap imports through the abolition of customs duties on the one hand for reasons related to the security situation deteriorating at the time, as weak support services in Iraq to the two sectors. The rampant corruption, bribery and complex routines in various administrative bodies responsible for the investment license another key reason in the reluctance of investors has a deficit added, which has become, unfortunately, a chronic re electricity and other services for the industry. Due to the lack of sufficient services to endemic private sector in industrial cities and agriculture and farmers so that they may grow productivity and tender, it was still inadequate to provide energy and logistics other to provide input and work more productive and skill to both industry and agriculture are important factors to poor productivity and competitiveness of our economy, which was then on the verge of collapse. Under these difficult circumstances, the monetary policy of the country governed by the necessities and requirements, the International Monetary Fund and the “Paris Club” to cancel the foreign debt, which was the title of a bankruptcy of our economy, which was a key former regime responsible for it. Now, out of Iraq this financial predicament spending actual Moisnath annual (except budget 2009) was expansive dramatically from 32.1 billion dollars in 2004 and to 64.4 billion dollars in 2010, and the expenditure programmed in the budget year 2011 were approximately $ 83 billion and expenses this year’s budget is about $ 100 billion. As the governmental institutions have failed to spend all that have been allocated in previous budgets, we believe that the surplus actually last highlight of the 2011 budget and also to this year’s budget, unless there big collapse in oil prices. Despite these surpluses that are not interrupted in state finances since 2003, has grown invitations is measured at the beginning of this year to exceed the reserves of the Central Bank, which now stands at about $ 65 billion. We believe we known Kmokhtchin in both Iraq and the world that overtaking on the reserve would be a prelude to the big return of inflationary pressures in the economy as a waste of resources. We also believe, but warn that if inflation will lead to accelerated deterioration of the purchasing power of most citizens, and poor and middle classes of society in particular. Also, point out that Article (26) of the Central Bank Act of 2004 explicitly states the following: “Do not give the Central Bank of Iraq any appropriations directly or indirectly to the Government or to any public body or the state-owned …” And therefore calls posed by some to borrow from the central bank and reserves are invitations unstudied legally despite feeling some of the potential beneficiaries of the put as achievable. gives detailed study we have prepared for your esteemed details other analytical may Tbngon found service Iraqna dear and the role of your esteemed esteemed in formulating the economic policies of the country. Yours respect and appreciation: undersigned top: Dr. Superficial Mohammad Reza inch (economic adviser former government), Dr. Farhang Jalal (adviser in matters of economic development and industrial investment promotion), Dr ultra Ali Abdul Rasul (Under oldest Precede the Ministries Finance and Planning, retired and economic advisor), Dr. Ali Kadhim Hussein (an economist and oil), Fouad al-Kazimi (former Director General in the Ministry of Oil and oil expert), Dr. Zaid pill (an international consultant and former expert in informatics), Dr. Fadhil Abbas Mehdi (Economic Adviser former international and economic researcher), Dr. Kazem Habib (former university professor and researcher economic), Zafer Al Essa (Master Business Administration, an international expert certified in the management teams of support and assistance for the leadership), Dr. Hashim Ali (International Economic Advisor), Dr. Kamil Adhadh ( Economic and former Regional Adviser at the United Nations), Hamid vBulletin ™ Version (economic and academic researcher), full Almhedy (oil expert), Dr. Fawzi al-Quraishi (expert and economic adviser), d. Abdulrahman star Mashhadani (Professor of International Economic Relations Assistant Center Mustansiriya of Arab Studies and International – Baghdad), Medhat al-Quraishi (economic and university professor – Baghdad), Dr. Saad Hussein Fathallah (university professor, Baghdad), Dr. Sattar al-Bayati (university professor – Baghdad) image to: • General Secretariat of the Iraqi Council of Ministers distinguished • CBI Text detailed study submitted to the President and members of the Iraqi Council of Representatives distinguished on the assessment of economists and Iraqi experts of monetary policies of the Central Bank of Iraq first: Introduction of market mechanisms and administrative procedures and its impacts on the remittances of the private sector under the central bank, governor Dr. Sinan Shabibi, to campaigns unfair for professional work and your performance basic legal function stipulated by the Central Bank Act 2004. I received the conservative leadership of the bank and Iraq shackled external debt estimated at 140-130 billion dollars and our national currency collapsed after suffering the consequences of the wars of the former regime and Asrafh on to the poor majority as a result of hyperinflation catalyst print money without any controls. These policies have led to the collapse of the exchange rate of the dinar which hamstrung by its purchasing power and on most people’s entry into the corn dust did not pay the scourge of hunger stricken Iraqi families!! Policies were printed cash without controls, which ترابطت with policy executive organ of the state in the drain Central Bank reserves initially to finance its spending, has led to hyperinflation at an annual rate average of 235% between 1991-1995, which crush capacity purchasing time and poorest even what remains of the middle class, and that left a lot of its and Achtsasiaha professionals homeland in search of livelihood state institutions Vavqrt from the role of professionals. This has led all to the deterioration terrible most health and education services in addition to water and electricity, public health and education and the General Administration of capitals not to mention the countryside. touch our note this to the outcome of monetary policy after 2003 when he moved the entire economic system, and the balance of payments as well, from the administrative control direct and to increased use of market mechanisms and its economy, which has become confuse some to ask their perceptions of “currency smuggling” While the new laws allow the free movement of private capital out of the country. In this regard, do not put them any idea about the causes of the tendency of capital to get out while reluctant immigrant capital (as is the case with many expatriate competencies) to return to invest in our national economy except the province of Kurdistan, which seems to be attracted investment and people more efficient. This polarization has improved efficiencies Lhasa Lib General Administration proportion to the rest of the institutions outside the oil sector in the country also increased incomes there compared to the rest over the country. It causes important to evolve the fastest of the province and draws capital compared to the rest of Iraq is establishing security there and relative political stability compared to the rest of the country. in our specialists that the key element that causes exit of private capital and clear, and he himself causes disinclination capital to return, but a disorder conditions security and administrative state since 2003. This has resulted in negative momentum turmoil repellent national private investment. This constant turmoil also encouraged to attract foreign investment and stimulated outside the extractive sectors, especially oil. Despite improved security, but the fragility obstacle essential to change the pessimistic view of investors and many savers in the sector of family. It is worth mentioning here in this regard that the measures and central bank policy in light of the restrictive former capital movement was punished criminally of taken out abroad. The sanctions would be applied, which was tough, the citizens, but did not apply, as we know, the masters and agents of the former regime who retained their leaders and their sons and their brothers and some of their close associates huge wealth abroad. And facilitate the globalization of electronic global financial markets today huge potential for the movement of capital that moves rapidly between banks economies, which disturbs countries’ attempts to track their movements accurately, and even the largest economies and the most ability. what conclude here is that the administrative control purely on both price exchange and balance of payments that prevailed earlier, and which some yearn, and practiced by the central bank under the former regime, was not effective to prevent capital flight, and on a large scale. Worse than that, that attempts to control administratively on the movement of capital and exchange rate of the dinar led, as in many of the economies that were addressed administratively until late last century, to drop the actual exchange rates currencies of these economies, including our economy of Iraq, through the creation of a black market for dollars benefited speculators him and hit him to the purchasing power of the dinar and the dinar citizen who garnered. These phenomena led to increasing dollarization of these economies, reflecting the deterioration of confidence in their national currencies. We have seen the same phenomenon in Iraq until early this century as squaring the U.S. dollar on the “throne of cash trading” in our home, which was state Baltsainaat, and until 2003, political adversary of the exporting State of the dollar! reflect phenomena referred to above the following result: economic policy and prudent monetary not those which claims the ability to manage the economy and adjust the direction of its activities through administrative orders without associate with deep knowledge of the mechanisms and economic incentives that govern the behavior of citizens and the private sector, as find dealers markets, also found in the past, multiple ways to bypass the “economy administrative orders,” which seems to be nostalgia Some him still exists. In our opinion, the style of management of the economy will fail to resolve problems of capital flight, it has been found of us resorted to him that the black market and bribes to bureaucrats Sttfhy to pass currency cash transactions “were difficult.” An example of our economy during the former regime as in the economies of Egypt, Algeria, Syria, and Eastern Europe and elsewhere prior to the disintegration of statist systems and clear for those who want to benefit from the lessons of the past to build a more rational economic system in Iraq. We have led the climate in which we have referred to the collapse of the economies of many of those countries that were administered without enough consideration to the act and the effects of economic laws objectivity on society and relations as well as on the efficiency of the political system and its ability to continue, let alone grow and develop Democrats. apply the same phenomena that we have mentioned above economic systems in business dealings foreign Valausat trade in the private sector during the sixties and seventies of the last century was able to transfer their capital abroad through inflated of Akiem import bills. A lot of the money that leaked at the time, and especially after the loss of confidence as a result of nationalizations in 1964, despite the restrictions and stricter sanctions previous political systems. And know who lived in Syria, which applied until recently policy of restricting the movement of private capital abroad, and by means of administrative, that capital Syrian private concentrated in banks and real estate Lebanese and Jordanian and UAE, as is the case for a significant proportion of the capital of the Iraqi private road, despite relative political stability, which was experienced by Syria before the events. It has already taken him Chtaura, the town Lebanese الوادعة about 15 minutes from the border with Syria, he finds a large number of Lebanese banks and international there is not commensurate with the needs of the people of the town, nor even with what he needs and the Bekaa Valley business banking, has led to restrict head movement money abroad to further his escape from Syria. Will not return most of what came out of the Syrian economy as long as the restrictions on the movement of capital prevailed and touched the political and security situation deteriorating, too. In contrast, deposits swells Syrian and other Lebanese banks as in the other. But we can say specialists, and certainty is high, the deterioration of security in Syria, which is lived Iraqis for decades, will lead to more leakage of private capital Syrian Vsgar savers there became organized into big capitalists in the convoy’s departure transfers those of the economy controlled commands and instructions administrative and political which did not examine the effectiveness of imposing sufficiency of consideration to the expectations of the markets and savers. main thing which we refer to here as specialists is that the causes of capital flight from an economy many. We also point out that the administrative restriction will not work for the interdiction of that out, but will create a black market and bribes. These two matters suggests that the economic means and incentives for the economy and the environment a few institutional corruption constituencies will be more beneficial to stimulate the survival of capital while will disable administrative restriction strict police to prevent the flow of capital abroad as indicated by the facts of the past. In our opinion, too, that means economic and institutional development more useful and feasible, although they will not be sufficient to ensure the survival of private capital or to attract returning that have not stabilized the security situation and make people feel reassured their money and their lives and ease the burden of administrative corruption devastating to the private investors employ their money within Iraq ( We mean here also outside the region more prosperous Iraq and outside the oil fields as well) instead directed by a significant proportion of them to neighboring countries Tstqdoba it more stable security, political us, also built institutional has advanced and evolved with the times and modernity technical while down most of our institutions and lagged remarkably to consider it disturbing! Ladies and gentlemen members of the council respected: under our note to you to other things concerning the performance of the Central Bank in the exercise of his duties basic, such as, for customization and brevity: a – the role of the central bank since 2003 to restore confidence Bammeltna national and relationship, in turn, reduce debt foreign. b – after economic activity expanding oil revenues, and its relationship to spending of public budgets. c – relationship rapidly increasing spending increased demand for imports and foreign currency and the role of the central bank to absorb inflationary pressures for public spending. d – the controversy revolves sometimes on the dinar exchange rate and variability: Is Iraq alone is unique in the volatility of prices cashed? e – control inflation: the completion of the monetary policy Iraqi under rapid expansion government spending. g – control actors of corruption is the basis الامتن to curb money laundering has touched our note to these items which Snassehb analyzed some more depth and within Doors following three. Secondly: the role of the central bank since 2003 to restore confidence Bammeltna national and the impact of economic activity expanding oil revenues, and their relationship spending of public budgets in April 2003, the exchange rate was slumped to 3500 dinars to the dollar, compared to 10 dinars to the dollar in 1991. As a result of this collapse caused by years of war and international sanctions, there is no clear prospect to lift our national currency, but through the abolition of major proportions of foreign debt as this is much higher than debt GDP to make Iraq a bankrupt country at the time. In these difficult circumstances, received Dr. Shabibi central bank conservatism at a time when Iraq was forced to resort to the International Monetary Fund and the mechanism “Paris Club” to negotiate terms for cancellation of foreign debt in the first phase of monetary reform. The aim was desired here in the longer term stability of the exchange rate to raise the value of the dinar gradually to be absorbed and neutralized the inflationary impact of its collapse above. As a result efforts of the Ministry of Finance and the Central Bank, and international support are excluded, including Saudi Arabia, Kuwait, Iraq negotiated to cancel not less than 80% of its debt to countries “Paris Club.” This mechanism has been committed Iraq not to give creditors outside the “club” conditions best when negotiating to cancel their debts. He was able Iraq under negotiations detailed, which played the central bank a role, canceled most commercial debt, which was estimated at about $ 20 billion in addition to most of the debt to Paris Club countries and the rest was, basically, debts Gulf countries procrastinated negotiate to keep our economy exhausted. However, as a result of the efforts of the negotiating referred to, dropped by the end of 2011 the total external debt by approximately% 53 to 56% to reach a score 61.267 billion dollars was more than two-thirds, ie 41.712 billion dollars, classified “as debt is processing including debt countries in the GCC . This is one of the achievements of the Iraq to restore confidence advancement its shattered economy. was one of the conditions for debt cancellation states “Paris Club” that were imposed on Iraq policies and IMF surveillance for a certain period, pending negotiations with creditors on ratios cancel their debts. To change leaders of the Ministry of Finance between several ministers, as some of them did not qualify sciences economic, he played the governor and the central bank an important role in the relationship detailed with the IMF, which is still reluctant to visit our country for security reasons known forcing the governor and representatives of the central bank to frequent travel to meet them outside Iraq. The results of these visits that shares the central bank to follow up and modify procedures by the fund, which was a precondition for achieving substantial reduction of مديونيتنا abroad, through professional work strenuous and continuous. has shares of debt reduction for large referred to in high dinar exchange rate gradually to 1479 per dollar in January 2006 to increase its value again nearly a quarter to 1172 dinars within December 2008 until he settled with 1170 dinars during 2009-2011 compared at 3500 in April 2003 and 1459 dinars mid 2003. Wadi improved exchange rate and stability for a period of remarkable to growing confidence in dinars After losing by more than a decade. was promoting confidence achievement is no less important than the reduction observed for debt and who played two central bank role Elijah me for the advancement of the economy of the vicious circle of mass military and economic embargo. due Paris Club terms, and approving a new constitution provides for the shift towards market economy, it has amended Iraq economic system to become open to the outside world Ptaamlath current and capital which is the case most of the world’s economies today in light of the wave of globalization only that many of them had girl economies, and particularly their industrial, agricultural and export, to take advantage of the international market wider. compared with , it has led import policy of open hand, and failure to promote agricultural and industrial sectors of the other side, to the survival of our economy incapable of such construction. has collapsed as a result of these policies, or lack thereof, our industry manufacturing and declining production there and in the agricultural sector as well as due to the weak customizations investment there and the huge deficit in the reconstruction and rehabilitation of the country’s infrastructure, most notably in the electricity sector for the reasons that are no longer unknown to many. Meanwhile, we note with concern increasingly directing annual budgets successive most resources toward operating expenses is the product and the other sections of the public current expenditure. The shares refrain clear about measures and policies required to activate the productive sector and to increase productivity and efficiency in competitiveness in our economy (which became open to international trade and regional uncontrolled) increasing the volume of disguised unemployment in the industrial sector of government, and to keep worrying but serious. This was reflected reluctance through allocations meager investment in agriculture and industry. reflected also slowly restructuring actions for these sectors as reflected obstacles activate measures to protect them and Asnadahma, is the most important tariff law which lasts frozen year after year without acceptable justification or reasonable is an excuse poor setups customs after nine years of change of political power of the country. reflect these things to us as they desire political before referring to weak institutional capacity in activating the customs protection of our sectors productivity, as indicated widespread phenomena patronage and dominance quotas on state agencies, which have become things do not raise surprised despite drawbacks large. These developments have led regressive in institutional building of the state to exacerbate dependence on exports of the oil sector, and dangerously, may portend days crises seriousness of economic activity and living standards in general if deteriorated global oil prices or stagnated recession long. Given this situation unstable political and economic characterized weak structures productivity and degradation , was on the central bank to deal with the new reality, whether by seeking to preserve what has been achieved relative stability at the price of the dinar exchange or by trying to reduce inflation, which hiked unleashed days of the former regime. Due to the collapse of structures production sector and failure of the banking system in general, he has used the Central Bank of stability achieved exchange rate mainstay to reduce inflation, and in light of the heavy reliance on imports to meet basic needs, despite the fact that encourage industry and agriculture may require sometimes cuts limited and deliberate reduction of competitive imports with national production. In order to achieve the goal of stability exchange rate, the answered the central bank demand for the dollar to the private sector and institutions of the Kurdistan Regional Government (which receive their share of the state budget Iraqi Dinars) through selling auction daily to the banking community. contrast, the rest of imports government gets what she needs from the dollar directly from the assets available in Zarhalmalah. The increased demand for the dollar because of all of the great prosperity economy Kurdistan region on the one hand and the increasing growth rate of gross domestic product at current prices significantly and that of the other side. has increased demand for imports significantly by the private sector Kurdistan result marked increase income and capacity growing business there import and distribution. Also, the spending budget dilated major expansion was a catalyst is another key to the effects of multiple domestic demand Almetzaidaly volume of imports and in light of the delayed programs reconstruction structures productivity and infrastructure for most sectors behind government spending that inflation without adequate controls. In this regard, we draw your view of the public eye to the official figures suggest check a major increase in GDP per capita per Iraq of 28.6% between 2010 and 2011, and at current prices, from 4.2 thousand dollars in 2010 and to 5.4 thousand dollars per capita in 2011. expect here that the increase in requests the government and private from the Kurdistan region, and all of Iraq, too, of the most important factors marked increase of demand to buy dollars at an auction the central bank in 2012 as a result of the multiplier effect of expenditure on entry and therefore the request of imports of goods and services. Whereas policy steady expansion and broad spending public current may continued in 2012 budget, without succeed the Ministry of Finance put ballasts objective tendency ministries and provinces to binge in spending being rationalized, has increased wastage of financial and economic result worsening operating non-product within government departments. leads like this waste to exacerbate the demand for imported consumer goods and hence on dollar in the currency auction. At the last two years has emerged to influence the demand of foreign currencies a new factor is the deterioration of exchange rates Iranian Rial and the Turkish lira, not to mention the collapse of the Syrian pound due to the deteriorating situation there. Whereas markets Iraq in general, and market Kurdistan private, open economies neighbors giants Turkey and Iran, as Syria stricken its war civil now, it has led Tdhorasar currency exchange neighbors to the growing competitive goods export, to us also stimulate degradation of this, in addition to increasing the average income of our citizens by 28% in 2011, the desire to travel to Turkey, Iran and the two became commissioned Tourism to them, especially to Iran, Acer wealthy more than other Iraqis and afflicted heat and severe dust storms suffocating, as well as the ravages of environmental pollution and poor health care and power outages and weak security services. Wadi These workers relating Bmahfsat travel and increase import to increased demand for the dollar at auction Bank. and contributed campaigns defamatory strapped to prudence and fitness together on the central bank in the media exacerbate concern many savers Iraqi dinar to stabilize the purchasing power of their savings. has led to strengthening incentives possession dollar as the memories of the collapse of cash in the nineties of the last century and evaporation in the purchasing power of savings Family is still alive to create apprehension pressure on the value of the dinar. indicated by poor campaign defamatory accusation lady efficient and virtuous and experienced management office in the bank were before the advent of Dr. Shabibi to Mhafezath director of the offices of ten conservative former him as operates a network beneficiaries through its director of his office is the other. Thus, the poor campaign managed which has become detrimental to reserve the central bank and the country’s economy is no stranger to what we have experienced the deterioration of ethics Almchehrin and aspirations harmful and illegal. and on the effects of deteriorating price riyal and the Turkish lira as the Syrian demand for import and travel, we would like clarification of the deputies respected presence low declared “for the price of reference” formal adoption by the Central Bank of Iran for Real by 14% roughly between the end of August 2011 and the end of August 2012 compared to 4% almost lira Turkish same period. exchange rate was the Turkish lira has fallen by 16% between the end of August 2010 and the end August 2012, makes it declined overall by a remarkable 20% over the past two years. Perhaps that reduction Turkish was the policy of deliberate aimed at improving competitive exports of goods and services in Turkish, which was followed by exchange rate reference Iranian when competing goods these countries on our markets with per capita income growing by fast. At September 6, 2012, the exchange rate Iranian Rial rate signal formal 12.260 riyals to the U.S. dollar, but that the deterioration of the official price to exchange Iranian Rial by 14% in the last year did not reflect what actually happened in the commercial market for the currency after the imposition of the economic blockade. has indicated Reuters On July 21 last that the market price of the Real, which deals whereby most citizens, was deteriorating by 55% the price of the reference official as was then about 19,000 riyals. has pointed one cashiers of Iranian assets that the market exchange rate was about 22,000 to the dollar on September 6, 2012, indicating continued to deteriorate rapidly. As a result difficult financial circumstances, the government there, according to the Reuters news agency, return to the system that gave him most of the world, a system prices of multiple exchange, there is now the official price 12.260 to the dollar, which is used to import consumer goods basic, and there are also price a second import of capital goods and intermediate of SR 15,000 to the dollar. either market price is moving as it has already been noted to deteriorate rapidly than 19,000 riyals to about 22,000 in the last two months. and the latter is the price used by most people and traders of consumer goods is essential in Iran dealings. For this reason, has become tourism Iraqis there attractive to many this year Variyal deteriorating and life is cheap for tourists, and the Iraqi dinar has escalated rapidly toward rial despite orientations decline Ltd. which against the dollar. contrast, has become tourism Iranians in Iraq expensive cost them the previous two years past result of the collapse riyal in the market, thus reducing their spending dollars within the Iraqi economy. Undoubtedly, the deterioration of the exchange rate Rial became encourages traders Iranians to increase their exports to us for getting this on a larger number of riyals through collection Akiem exports from peers Iraqi dinars and likely dollars which increases demand for the dollar auction Central Bank. rapid increase referred to an average per capita income, also known as Ladies and Gentlemen of Representatives, it is only obvious result of increased oil revenues and government spending expander. Meanwhile, led the rapid expansion of spending to a rapid expansion last import of services , including shipping services, insurance and reinsurance in addition to the expenses of travel and tourism and transport abroad, communications and scientific missions and expenses diplomatic and الايفادات and telemedicine abroad, etc.. These expenditures are denominated in foreign currencies, which increased from orders dollar in the market and thus demand for the dollar auction currency to the Central Bank. The axis of movement of the Iraqi economy now is the oil sector Besadarath and income implications and associated quantities of production and the ability to export them to mention oil prices linked to the evolution of global markets and that does not have Iraq a lot of influence on trends over time. permission, these things are mostly linked to sector Oil and policies as well as linked to the Ministry of Finance and its policies in the distribution of oil revenues Badmak on sectors and provinces and the province of Kurdistan. were oil revenues rise in the past years, except 2009 to the collapse of oil prices source then collapse significant physical deterioration of oil exports by 32% from 61.1 billion dollars in 2008 and to 41.67 billion dollars in the next year. and happen collapse in oil export revenue, was foreign currency reserves and gold that exclusively favored the central bank is first line of defense for economic activity that was protected from the adverse effects of the collapse in the light of the rule that are known to the wise that “White Shark welding you in the Black Day. ” From here, the policy of the central bank to maintain the balance of the reserve policy involving insight Mahmoud risk sudden fluctuations in world oil markets and this insight met him, regrettably, calls are not documented scientifically fired some to use the reserve, which found her permission ears when the government despite the presence of surpluses in the public budgets for the years 2003 -2011, which shows definitely not based on those calls to any knowledge real numbers and trends as far as they are based on the whims of promoters. These days, that oil prices were high where relatively, although volatility Ltd., a reserve bank Central about $ 65 billion a feat considerable and significant to the economy of Iraq, and monetary policy in particular, when compared to the situation of bankruptcy that prevailed upon receipt management current professional responsibility of designing and implementing these policies. Thirdly: the exchange rate and inflationary pressures and spending public budgets: controlling inflation accomplish policy Iraqi monetary under rapid expansion government spending as Pena earlier, continued dinar exchange rate rising to settle at 1170 dinars to the dollar between 2009 to 2011, which contributed significantly to control the prices of imports. Whereas the Iraqi economy outside the oil sector has suffered setbacks serious after decades wars and the economic embargo, has led stability exchange rate also to stabilize prices of consumer goods imported encouraged to reduce orientations inflationary cost of living. seems so obvious from Statistics price index of imports shows that inflation was at high rates between 2003 and 2007. year which we believe The current administration of the Central Bank had begun when their policies to fight inflation, no 2004, the average annual price rises in Iraq 27%, a high number by any standard. has managed the central bank to control inflation between 2008 and 2010 and is also a settled price dinar exchange. ranged these rates between 2.4% in 2009 and 2.9% in 2010, and those low rates reflect good performance and efficiency. Thus, it has weakened the monetary policy of the Central Bank and the brunt of inflation, which was منفلتا people and a lot of poor people in particular, as Many people know that loose inflation, as was the case previously, leads to the redistribution of income and wealth in favor of groups richest of society while crushing loose prices inflationary incomes of the poor and low-income as well as middle classes in it. to Kdaad inflation rate increased in 2011 to 5.6% annually, but he stayed within economically feasible. and attributed much of the increase here to the rapid rise index sub housing reflecting effect worsening housing crisis as the effects of government spending fast on speculation land, which became a negative impact on the living standards of the majority of citizens while profit including the owners of real estate and urban land near the outskirts of the big cities in particular as well as some of the infected arrows contracts and government contracting.
Source: almowatennews