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MONETARY POLICY of the CENTRAL BANK of IRAQ (22/07/2013 11:45 am)

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Monetary policy of the Central Bank of Iraq


Monday, 22/07/2013 11:45 am

After that we have identified the negative effects of the monetary policy of the central bank with regard to dealing with the growing demand for the dollar and the successor of the negative impact on the Iraqi economy, do not miss the negative social effects, which include:

1 - to seek monthly income varies from one family to another and according to the number of passports that they have and without that there will be work product against this income.
2 - creating a situation of great scramble among citizens and a sense of inferiority in front of the doors of banks distributed to the dollar and carrying them is the so-called descriptions and epithets.
3 - the rush of a lot of staff and workers in the public and private sector and artisans to leave their work and stand in long queues to get a monthly share of the dollar.
4 - open a new door for financial corruption through the exploitation of some of the financial authorities to passport holders who can not get a dollar to participate in the meeting or the acquisition price difference it fully.




The price difference in Alkhmshalav dollars amounted to (450) thousand dinars, an amount equal to the monthly income of some workers, leading to the creation of a state of contempt action and transform the citizen, whether working or not to pusher opportunities especially in light of the absence of any controls for the purchase and sale of foreign currency only The buyer must have a passport and do not see there is any justification for this orphan officer only if the central Among the directions that every Iraqi gets a passport, even if he does not want to travel?



The effects of monetary policy on banks


From the effects of central bank policy monetary impact is clear and substantial policy and plans of banks, credit and investment and the consequent growth in different economic sectors and has identified the Iraqi Central Bank controls granting credits various controls domestic and foreign investment is in the mildly controls and mechanisms we can say about it than good but who punished the central bank that it could not implement its monetary policy in this area, for example, has allowed the central bank to banks بتسليف and the granting of loans in various forms up to eight times the bank's capital and under the publications urged banks to achieve this rate or any other rate close to them but did not take into mind that the banks when granting credits are calculated several things before raising the proportion of grants, including:

1 - The amount of yield or interest earned for these credits.
2 - The amount of expenses that will be incurred by these banks because of the grants.
3 - guarantees provided to ensure that credits granted.
4 - the risk of non-payment and customizations that employ for these credits.
To other accounts, which vary from one bank to another.





If what has been awarded five thousand dollars as a loan or an advance or other they will achieve an annual return up to (589) thousand dinars If we consider that the interest rate 10% per annum while the same amount if invested in the purchase and sale of U.S. dollar cash it will achieve an annual return limits (2600) only two million six hundred thousand dinars, as if the bank has invested five thousand dollars interest rate up to 45% per annum and that the motivation or incentive to the granting of loans and advances and banking services will become not relegated to the feasibility as what you would pay the bank to bear the expenses of credit and the risk of non-payment and follow-up and the opening and marketing branches and affordability while he could achieve four to five times the same yield earned from loans and advances in addition to the invested capital guaranteed 100% and there is no risk could face the bank If added to him Auction remittances, the realized rate of return will be paid Bank to be in full and sang the reluctance of full exercise of any credit or investment policy, the central bank calls her.







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