D. The appearance of Mohammed Saleh
To hide that the monetary policy adopted by the Central Bank of Iraq Adhiraa of Foreign Affairs of less importance for their instruments of Interior in meeting the objectives of that policy in maintaining economic stability and reducing inflation and the deepening of financial stability, which is in the interest of economic development of the country.
On this basis, the opening up of the Central Bank Iraq on the international financial system and integration into one of the most important challenges faced by the monetary policy since 2003 after the lifting of economic blockade of direct and edit the Iraqi assets frozen in the banking world, to begin rebuilding the reserves, the Iraqi Central Bank’s foreign currency which is the cover of the national currency and a source of stability Iraqi dinar through exchange rate stability and build equilibrium value of external dinars.
Based on the foregoing, and the fact that the Iraqi Central Bank State Bank and the financial adviser and trustee of public funds as provided for in its law No. 56 of 2004, has been able to the Iraqi Central Bank to manage the country’s resources of oil and other sources of foreign currency through the administration of the Development Fund for Iraq that fund which was established by Security Council Resolution 1483 in May 2003 and especially since it took over Iraq’s sovereignty after 28 / June / 2004.
terms associated with managing such a fund is closely linked to the budget of the Federal to the country of the fact that oil is a supplier of President of the budget and by more than 90 percent as well as to spend the country’s foreign currency comes from the fund, and the rate may increase to 95 percent of the inflows and oil as is well known is about two thirds of the GDP of the country.
and that this administration has taken a sometimes another after entry into force of the Security Council resolution 1956 for the year 2010 and the end of the international protection money to the Development Fund for Iraq on 30 / June / 2011. On this basis, promised Resources Development Fund for Iraq linked to the balance sheet of the Central Bank of Iraq and monetary policy, two-way: -
First: items in the balance sheet of the Central Bank
as the Central Bank shall replace the liabilities represented by the Iraqi dinar to meet the foreign currency received from the fund to finance the expenses of the government of the Interior, where represents the accumulation of such foreign currency reserves, Iraq’s international or the cover of the national currency which is used in part as a means to intervene in the money market to control the levels of liquidity and excess demand generated by the general budget through public expenditure financed Iraqi dinar source within the policy of sterilization to provide a balance between supply and demand in the money market and maintain the stability of the Iraqi dinar exchange rate.
II: items outside the balance sheet of the Central Bank
and represent in all cases, management of the Iraqi Central Bank of the public money, especially in foreign currency for being a guardian of the money the government and entrusted with the administration of State for public money.
and as much as it came to slit the first / items within the budget Central Bank of Iraq, especially foreign assets, they represent today as we cover the national currency of the servo stability and represents hedges of exchange to meet the additional forces generated by the market potential in every moment of daily activities and expectations produced by that market.
As well that this cover is one of the components of the Cash Basis of any central bank money and represent the means of retaining the strength of the Iraqi dinar source, rising foreign reserves of the Central Bank (cover currency) from (a few billion) in 2004 to about (63) billion dollars, is currently the highest in the Economic history of the country three decades ago.
However, to Erie, the central bank such amounts sufficient to protect the national economy because of the weakness of its diversity as it does not pose agriculture in today’s contribution to the gross domestic product of more than (3-5) percent and industry for not more than only to 1.5 percent, slightly, which means that the economy in its current exception oil production is an economy service-weak link production total, which requires careful and in anticipation of severe in the formation of sufficient reserves absorb twice the diversity and displays the balance of payments to the dangers of extreme volatility because of the pressure of aggregate demand or aggregate expenditure.
Have been able to CBI for being a central bank independent of diversifying its reserves of foreign outside Protection of Security Council resolutions, and it’s U.S. presidential executive in the protection of bank money and the government in the area of jurisdiction of the U.S., which provided that independence brought by its law, in addition to the site of Iraq Muqtadir in the international community, internal protection managed under which the monetary authority to diversify more than 65 percent of those reserves to areas of another jurisdiction in the European Union and other currency of the euro and the pound sterling since 2008, particularly in the sober central banks in those areas of law.
This was the internal protection for central bank money, which represents the country’s reserves are a source of respect and appreciation of the fact that these funds contribute to the financial stability of Iraq, which is an important part of the components of international financial stability, and that these funds are not for commercial purposes is earn Iraq a financial power and legal in dealing with institutions international financial and building close relations with central banks in the industrialized world first.
The Security Council resolution 1483 in May 2003 may form the starting point for restoring Iraq’s relations with international financial and in particular multilateral financial organizations, which singled out of them (the IMF and World Bank), which resulted in the birth Convention on the Paris Club in November 2004, which led the International Monetary Fund in which the role of and influential in Iraq to get a discount on its debt of State, which increased to $ 120 billion and by deduction of 80 percent which is the only country in the world of middle-income countries that have received this discount higher its foreign debt.
This is because the matter to the two entrances are important Adahma fund the first to make a loan to Iraq under the loan agreement the countries of post-conflict EPCA where the Fund has been able to persuade the Paris Club countries that Iraq despite being a middle-income countries, but it falls within the countries emerging from conflict and that the infrastructure and economic status requires a deduction of at least 80 percent of the total debt and the other to assign his hypothesis to provide tables of financial and economic analysis provided by the Fund for the Iraqi economy to the secretariat of the Paris Club
which named the analysis of debt sustainability DSA, which showed the other weak capacity of the Iraqi economy to pay its debts unless there is a discount high and which culminated in that Convention, where rescheduled debt discounted by 80 percent until the year 2028.
that Maittalaa him the Iraqi Central Bank of the future plans are summarized the development of management of the country’s resources and diversification of foreign through the formation and the creation of sovereign wealth fund are different standards a little on the criteria for management of foreign reserves International (cover currency) that prevail and venerate the yield on the issue of liquidity which are inherent to the status of international reserves of central banks usually for emergencies.
And diversification of sovereign wealth fund various financial instruments stems from the facts that the first oil resources that are difficult to be absorbed through real diversification should diversify financially. And the other returns the sovereign wealth fund that has to be in the interest of development and capacity building material and human resources of the country in a line parallel with the ability to diversify the real sectors of the national economy all. Which represents one of the strategies the central bank.
Either strategy the other, generally blog in the reform of management system of the national currency through raising project three zeros added by the inflation and the deterioration of the former reduced the efficiency of the system of cash payments current and increased the difficulties of cash transactions, and ease of Altobeiran numeric value for different transactions, making it more difficult and Aktherabia.
Therefore, the project re-structuring of currency comes to shorten the money supply of a large number of nearly 34 trillion dinars to about 30 billion dinars is about 4 trillion paper in circulation to 1.18 billion paper, which will facilitate the work of the system of cash payments and reduces the cost of payment transactions cash between citizens and the banking system and the banking system itself and reduces the problems of the multiplication of numbers, or deal with digital Bakiem very high expression of transactions.