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CNN. Broadcasting From Happy Hour While Taking The Beer Bucket Challenge ! * Challenge Iraq's monetary policy script PUBLISHED ON 07/12/2017 entrance Monetary policy has been a vital issue in the economic life of the country. It is a reflection and make it consistent with, the overall performance of the state and its seriousness in the avoidance of difficulties and dilemmas emerging goals set. 2003 Before the cash was all in the grip of the government and was never independent the agencies were over-performing so that monetary policy was an extension of the government's own self-interest. Hence the need for radical reform of the Central Bank and the promulgation of the new law, which affirmed its independence and established its primary role in protecting the country's resources. The task now is to confront money laundering and attempts to finance terrorism, which stand at the forefront of the challenges facing the nudist central bank. It is also essential to ensure the safety of monetary operations through the sale of currency is essential in the performance of the bank and the adoption of principles and rules of dealing in the project in a proper atmosphere of control and disclosure. The preservation of the independence of the bank and enable it to perform its mission without interference and corruption and make it an effective institution and guarantor of the interests of society as a whole is a basic requirement The sale of the currency needs a deep understanding in light of the large accusations against the bank without evidence to prove the existence of suspicions of corruption or money laundering or smuggling of currency. The proposition that the sale of the currency is a waste of public money characterization is not related to economic and economic, and that there are many countries exercise this process, one of the main functions of the central banks in the world. This is a multi-dimensional job that is concerned with the multidimensional approach of the National Payment System, the management of the national financial system, the management of the national financial system, the supervision of foreign reserves and the management of foreign reserves Prudential and financial institutions, and sets up preventive controls in addition to other tasks related to the issuance of cash and dissemination of data and economic indicators and forecasts. MONETARY POLICY A central task of the central bank is to manage inflation, which aims to control inflation, stimulate the economy, make full use of the balance of payments, and achieve monetary scrutiny. The achievement of monetary policy objectives depends mainly on the central bank's independence on the size of the central bank's monetary bloc. Control, control and independence here are in measure (as the core element of monetary policy). Despite the provisions of the laws of central banks in most countries of the world, but this independence in real terms and process subject to the effects and to varying degrees affect that independence. , And challenges Financial capture is the starting point for economic contraction and requires a critical critique of the ability of the monetary authority to achieve price stability at target levels (by controlling inflation at target levels). The challenges of monetary policy Here monetary policy (control of money supply) faces several challenges, the most important of which are: I. The rental economy (unilateral economic resources) These monopolies lead to regressive behavior, in which resources are wasted by consumer spending, waste, slackness, poor efficiency, increased rents, and the inefficiency of the local productive apparatus. The monetary base is increasing because of the foreign currency depreciation. For the benefit of the government by the central bank that on the Miz Ya and pressure payments. The budget expenditure of the state increased from 100 to more than 2004 trillion dinars in one year and the money supply accordingly increased from 32 trillion dinars in the last years to 88 trillion dinars in 2004, which presents a great challenge to monetary policy in 2016 trillion dinars in the year of sterilization surplus Spent-based liquidity to limit inflationary waves. The rate is acceptable at 22% per annum, but this bloc has grown at a rate of more than 4 standards of growth of the monetary mass is at an annual rate II. Fiscal policy (95%). The nature of public revenues (in dollar terms), which represents the obvious, and the government's spending is the limit for the expansion of monetary supply, is a central challenge to monetary policy, including: 5%. 5 - The coverage of local expenses of domestic cars does not exceed 1 to replace foreign currency (derived from oil exports) in local currency. Which affects the broad money supply (dinar) through the central bank - Impairs the flexibility of expenditures and revenues, which are often controlled by political influences and causes expenses that are difficult to reduce such as salaries, subsidies and others. Instead of adjusting the expenditures according to the funds or increasing the non-financial balances in the fund account, the balance of surpluses in oil was used. Revenues from the level of one billion dinars in the previous years to 100 The amount of the 2016 billion dinars in the year 34 and 2015 billion in the year 44, but the level of expenditure did not decline, the same proportion, which created a real Ajaz. - The government expenditure was not aimed at expanding local production capacities, creating conditions and supporting the private sector. There was no increase in the productivity of the public sector companies, but it continued to receive the support of the public budget despite its large and accumulated losses. The amounts exceeded more than trillion dinars through loans from government banks, which have not been paid yet. III. Financing the deficit of public budgets The deficit in the state budget represents the biggest challenge to monetary policy, and it is proportional to the bank's counterparty with the independence of the central bank when this deficit is financed by treasury bills. From the end of 2016 and during the year 2015, the central bank deducted funds transfers during the period 16 by about 4 trillion dinars in addition to which led to a trillion dinars from the banks reserve has an increase in the cash mass without the cover of foreign currency and thus the decline of foreign reserves. Four - the phenomenon of dealing with criticism 41.9 The cash mass traded outside the banking sector and its channels represents a sum of JD 45.1 trillion (2016 trillion dinars) at the end of the year. This phenomenon represents a major challenge to monetary policy. As well as the lack of funding, employment and credit opportunities. V. Weak government cash management The method of funding state institutions for the allocations allocated to them in the public budgets is weak and the loss of control, which accumulated large sums in the accounts of multiple multiple (A total of more than 15 trillion dinars per year) to the central government institutions and the central bank (25 trillion dinars) to build a single unified account of the public treasury to ensure effective and effective control over the use of funds . VI - Weak financial depth and financial charges Financial markets (stock and bond markets, money markets, money markets) are limited, thus eliminating the chances of employing local smokers, reducing the phenomenon of stagnation and withdrawing liquidity to be used in real sectors. VII. Weakness of the banking system An important factor for the Central Bank in achieving the banking system is an essential pillar of the economy and financial security and an important factor in helping manage the monetary bloc through the tools of the Central Bank stabilized through the banking system and the market for the interest rates and reserves financial balance Exchange rate, etc. However, this sector is suffering from the problems of the open Euro (selling and negating many negative phenomena including: 1.- Limited product and banking services qualitatively and geographically and preoccupied with marginal activities 2. 80% - the dominance of government banks over the sector by more than 3. Credit concentration exacerbates the problem of faltering debt - 4.weak institutional governance. 5- Receiving financial shocks due to low activity in the real sector and the government's failure to pay the debts of contractors, processors and others. Eighth - weak role of some monetary policy tools Some monetary policy instruments play an important role in influencing the monetary bloc by increasing or lowering it, including interest rates, legal reserve ratio and rebate rate, but these instruments have limited impact due to the nature of the economic structure, the structure of the financial system and the weakness of domestic credit. IX. Decrease in domestic investment and increase of foreign savings As a result of the security, political, legislative and regulatory environment, a large percentage of the smoker goes to invest outside the market, and with the weakness of imports of foreign currency from export sources, all this leads to becoming the central bank is the monopoly on the offer of foreign currency in the exchange market in full, The only source covering the demand for foreign currency. Ashar - Poor coordination between fiscal and monetary policy Financial and monetary policies form the cornerstone of economic policy. As fiscal policy plays an important role in the management of public expenditure and imports, which have a direct impact on GDP, cash supply, aggregate demand and employment, coordination with monetary policy is important without which monetary policy is subject to great pressures and challenges. This coordination was monetary policy and domestic spending and weak investment spending supported the weak and uneven waves of spending Which aims to expand and diversify the production base, all of which affect the effectiveness of monetary policy and achieve economic stability and exchange rate. Media Influence - Eleven With the weakness of economic awareness in general and the awareness of monetary policy in particular, inaccurate news and analysis constitute a great pressure on monetary policy, a reflection of the sensitivity of this aspect, and what are fabricated by propaganda, news, figures and analyzes that are impractical and non-objective, directly influencing the market and creating fear and fear among citizens. Stagnation and demand for foreign currency and other phenomena that confuse monetary policy. (*) Banking consultant. Copyright © The Economists Network. Reproduction is permitted provided that reference is made to the source. http://iraqieconomists.net/en/ link