Economic center calls for the central bank to tighten controls on the sale of the dollar and the mechanics of foreign exchange

[yota691]

Economic center calls for the central bank to tighten controls on the sale of the dollar and the mechanics of foreign exchange

23/02/2015 10:28 | Number of Views: 1722

BAGHDAD / Source News / student .. Economic Information Center, on Monday, the central bank to tighten controls on foreign exchange operations in order to prevent money laundering and the monopoly of foreign remittances and speculators control the process.
 
The head of the Economic Information Center lion Muhammad Ali in a press statement I followed Agency / Source News /, that "Almtaamln are used for more than ten years on the bank to adopt a reference to convert the currency and buy the dollar as a government entity sober possible to trust them and their operations."
 
He said that "despite some problems, but the bank has succeeded over the years to contain the dollar market, and the assignment of the task for the banks as much as what are correct, they need to tightly controlled its operations, especially the private banks that have not practiced banking properly."
 
He noted that "oversight will ensure justice mechanisms conversion and prevent money laundering and terrorist financing and knowledge of the currency in which it was carried out by the Central Bank of tracks."
 
He noted that "banks need a transition period to evaluate its work and expressed his belief that the market because not rise in speculators banks basic factors are responsible for the high dollar prices in the last period and that this new mechanism Stnasabhm it is expected that Aihauloa raise the dollar price on the contrary, probably would take to maintain the stability of the market. "
 
He stressed that "the central bank's assessment of the demands of the banks deal with this experience and have a return line in the event of failure" ./ ended Q

[sandfly]

THANKS

[moneysoon]

Interesting posits on this issue...

[Carrello]

Interesting points from the "Economic Information Center".

[Texstorm]

Thanks Yota ! Well what I'm reading into it is a complete contradiction from other articles ! Smoke 

[captl1]

Smoke In My Opinion.

[yota691]

Iraqi Central Bank building in central Baghdad Imaging (Mahmoud Raouf)

Economic Commission: Iraq has 16 prominent experts in the planning over the last decade .. and watching the work of the four Ministries

 
Author: 
Editor: 23/02/2015 20:38 Number of Views: 80
 

Long-Presse / Baghdad

In the House of Representatives Committee confirmed that the economic decline in the government's performance and sagging state institutions due to poor planning, revealing the migration of 16 of the most prominent and the Ministry of Planning and experts over the past decade.

The committee said it was monitoring the work of four ministries and independent bodies are the investment and the central bank, confirming that it was involved in a legal amendment of the Investment and the Central Bank.

He says Harith Chanchal, vice president of the Economic Committee in the House of Representatives, said that "the work of the Economic Commission limited follow-up work of the ministries of trade, planning and finance, industry and minerals and investment authorities and the central bank," pointing out that "all the concerned ministers and the heads of these bodies has hosted the Commission to discuss the possibility of developing the economy and investment. "

He said Chanchal in an interview with the "long", saying that "one of the biggest problems facing the work of the Ministry is planning to leave more than 16 experts out of Iraq during the past ten years, causing weakness of the work of the ministry as a solution incompetent people in their place."

And on the assessment of the Economic Commission for the performance of the Ministry of Industry and its affiliated institutions, Chanchal says that "the ministry Off After converting companies and laboratories affiliated to the self-financing as a result of lack of support from the state of the economy has led to sagging in the number of employees," revealing "the presence of more than 174 funded company self stopped working and keep track of the Ministry of Industry and Minerals. "

For his part, says MP Osman Tahir Haji, the other member of the Economic Committee, that "the Commission has distributed its members to five sub-committees, each supervised by the Ministry or body," noting that his committee "is trying to provide support to the agricultural, tourism and industrial sectors."

Attention Haji, told the "long", that "the Iraqi state began to spend on religious tourism sector rather than a tributary of the economic sector through the allocation of large religious tourism money in the events."

In turn, MP Najiba Najib reveal "Economic Commission to develop a comprehensive plan for the next four years include the amendment of the Investment Act in a manner consistent with the development of the countries of the world."

According to Najib, in a telephone conversation with the "long", that "there are major problems facing foreign investment companies that intend to enter into Iraq eg difficulty obtaining visas by the Ministry of Interior as well as the allocation of land for investment process."

Draws Kurdish MP to "the reluctance of local and foreign banks for the funding and support of investment projects," indicating that "the problem of the Iraqi economy in the central provinces and not to grant freedom of investment to attract foreign companies."

Reveals a member of the Economic Committee that "the new amendments, which will occur on the investment law will give the provinces the powers of investment and the agreement with foreign companies," emphasizing that "the Commission's strategy focuses on encouraging the private sector and give it a significant role in the construction and the process of reconstruction."

And on the performance of the Central Bank of the challenges it faces in the current financial crisis, MP Najiba Najib says "the central bank law is being amended by the State in order to send it to parliament," she said, adding that "the Bank's management conservative on one of the paragraphs of the federal budget, which provides for the identification sales of the currency. "

Najib stressed that "the central bank will lend the government to cover the deficit indirectly through the purchase of treasury transfers the interior or exterior of the Ministry of Finance and the interest rate," pointing out that "the central possesses a reserve of about 77 billion dollars."

[TBomb]

Mowafaq Hassan Mahmoud * lights on Article 50 of the general budget for 2015 Law

- PUBLISHED ON 02.21.2015

Download PDF

Publication of Dr. Ali Mirza on Iraqi economists network site in the February 1, 2015 in search of valuable effective treatment of the potential consequences of the application of Article 50 of the general budget for 2015, the controversial and for the imposition of daily dollar sales ceiling by the central bank and then concluded among other proposals that to address the law consequences and Saadz search to brief him had not seen for then moved to his proposals to address the potential consequences.

THE FOLLOWING IS A COMMENTARY BASED ON DR. MIRZA'S ABOVE REFERENCED ARTICLE FROM THE SAME IRAQI ECONOMIST'S SITE

   The first is referred to Dr. Ali is to restrict dollar sales of a certain amount is something inconsistent with the principle of independence of the Central Bank, which guaranteed his article (2) of law No. (56) for the year 2004 and contrasts with Msoalath for foreign exchange reserves management (Article 27 of the Law ) But the study Taatmhorottercz mainly on economic, financial and monetary consequences sees the cap sales would be referring to the lack of commitment to fiscal and monetary monetary stability the two policies and thus failing to maintain a stable level of prices, a policy that DAP central bank to follow for many years since 2003, as it is the cornerstone of in his duties. There is no doubt that it would impose a ceiling of this expansion gap between the official exchange rate and the market price of the dollar, which would be its outcome growing parallel market of the coin, which will move inevitably to import prices and thus a sharp inflationary surge in prices, and limited the use of the official exchange rate on the transaction and government markets with deal Family and private sectors prevailing in the parallel market rate. The inevitable result of this system, the two prices is to restrict the central bank's ability to accomplish one of the main goals as previously stated in the envelope is characterized by limited effectiveness of monetary policy instruments as it was to satisfy the demand for foreign currency is the

means relying on them to maintain the stability of the exchange rate and thus stabilize prices

 

   He adds Dr. Ali that adherence to the roof of the sales will give the opportunity for many importers and some financial intermediaries such as banks and companies remittance procuring dollars to dispose of such purchases in exchange for documents to import proven facts easily made available genuine were or "vexatious" as he put it, and thus provide an opportunity to exploit the situation and make a profit higher than the margin set at the time the central bank, as he remembered what happened valuable wake of the US military withdrawal in late 2011 as it resulted in increased demand for the dollar without displaying matched to the widening gap between the official exchange rate and the market price of more than 8%, as happened valuable April 2012 Knowing that he did not, then there is a cap on the dollar sales, how will be the case with the ceiling.

 

REMEMBER - THIS IS AN OPINION PIECE

   With all the possible consequences, the researcher supports that it is not possible to launch the sale of foreign currency without balance this currency reserves at the central control and the possibility of deterioration in the level and then exposing the economic Site

Iraq any susceptibility to fulfill its obligations to foreign danger and decides the need to maintain a secure

A minimum of foreign currencies and secure the greatest possible stability in the exchange rate and in the prices of goods and services.

   But how to get it opines :

 

 

(A) avoid imposing ceiling on sales with the Central declare his readiness to satisfy the demand for the dollar as far as demand commitment to basic needs being identified with high professionalism and periodically as needed and to take into account in determining the amount of daily sales level of the balance of the reserve

 

 

( monitor the purchasing banks of dollars to secure their commitment to financing imports involvement of regulators involved in the control of the Ministry of Commerce and other devices

 

 

© improving institutional care infrastructure for the distribution of ration

 

 

(D) formation of a cabinet economic policy teams of experts from the financial, trade and Altql and oil and central bank and ministries to coordinate their work to Mracbhalaswaq and orientations of demand and supply of goods and services and on the dollar and stock condition staples and propose efficient solutions to break bottlenecks and fight corruption wherever it was found.

 

 

 Dr. Ali believes that if you are unable to Mlavah drain reserves in spite of all the extra funding attempts of the proposed rationalization and control policies ... etc any coming at a critical limit can not go down below it, it becomes a refuge to reduce the exchange rate, with follow strict fiscal policy is less harmful than imposing restrictions uneconomical Calcagaf on the dollar sales in the auction currency, for example

 

 

Can be considered three detailed presentations represented Dr. Ali responses to comments raised by some economists to study an integral part of his studies. I have posted all of us in the comments fields under study in the Iraqi economists network site. I have been where Dr. Ali to a number of details and additional issues related to the so-called auction currency and the exchange rate mechanism and the relationship of reduction in the exchange rate financing the budget deficit, as well as matters relating to the constitutionality of the imposition of the ceiling on dollar sales.Also discussed the possibility of strengthening the negative inflationary consequences of the imposition of the ceiling on the auction sales with what was nominated in the media about the central bank is prepared to lend to the government indirectly interaction ... etc issues.

 

 

Shill so much of the study, Dr. Ali to say that Dr. Ali has someone consequences imposed ceiling on dollar sales diagnosis comprehensive and thorough look no further it Vllsagv adverse impacts on Astaqrarsar dinar exchange and then the difficulty of maintaining a stable level of prices, a job of principal of the Central Bank as well as other repercussions Perhaps we will see a bi-if not the plurality of the dinar exchange rate markets parallel to the official market.

 

 

There is no doubt first be duplicated Aotaddah exchange rates would deprive the central bank of the tool is the most important of his tools to maintain monetary stability in light of the weakness of other monetary policy legal Kalaanaati deposits traditional tools Legal Reserve Requirement and open market operations Open Market Operations and other tools available to central banks in the markets advanced no shade in the Iraqi market.

There is no doubt that the fear of a second continuing drain balance of foreign exchange reserves of the Finance Committee of the House of Representatives may be charged to resort to the ceiling on dollar sales mode. But we have to say that the experiments have proved that the development of quantitative restrictions on any variable is is useless and will only lead to corruption and breakthroughs here or there and perhaps the clearest evidence of what I say is a quantitative import who has worked in earlier periods and corruption that accompanied the import licenses program then.

 

 

I must again say that it is difficult to keep the balance reserves of foreign gold coins without prejudice on the one hand and to maintain monetary stability, any exchange rate stability Dinarmen second hand meaning it is not possible to achieve two contradictory at once Conflict of Targets and the owner of the decision that determines what he wants If you decided that the priority is to stabilize the exchange rate, he must understand the consequences on the balance of foreign exchange reserves and gold Lama if he chooses to maintain the reserves, he should turn a blind eye to the stability of the exchange rate and the consequences of him and he has to take responsibility, I say this not to Ttakerrmohna charges against the bank Central in the near yesterday that he wasted money and burned the nation billions of dollars for forgetting monetary stability accomplished by the monetary authority for years, charges that claimed the lives of some of the finest Central Bank officials. 

 

 

In saying this does not mean leaving things to sit back, but it is possible to set controls and limits here and there Checks and balances as it is not reasonable to neglect one of two goals for the benefit of the other, but can seek to achieve greater Kdrmemkn of monetary stability and control the balance of foreign exchange reserves to limit the damage in the least, as you can and if It requests a reduction of the rate of the dinar after every effort to avoid it so be as pointed out by Dr. Ali Mirza in his value.

 

 

The cap on the dollar sales by 75 million dollars a day means between 19-20 billion annually, compared to an annual rate of around 50 billion a year, as in 2014, slightly higher than the one-third of the annual average. There is no doubt that the prevailing opinion among the select ceiling that goes from the dollar window for imports by the private sector goods and services represents only a very small proportion of the total central bank sales may not exceed a total of $ 10-12 billion, and here I can only agree with this opinion and based on this to my personal observations and to Mdolaty with a number of colleagues bankers of the way things work in most of the banks with respect to the dollar vouchers and the quality and credibility of the documents submitted to the Central Bank in this regard.

 

 

In order to highlight the contrast between reality and official statistics and found it useful to Ord here timetable of Iraq's imports of goods worth billions of dollars CIF for the years 2011- 2013 are derived from the annual statistical Central Bank for the years 2011 and 2013 releases, the latest offer what we have.

Table (1)   of Iraq's imports of goods   CIF  billions of dollars (2011-2013)

Year

Total merchandise imports

Government and public sector

Private sector

2011

47.8

12.9

34.9

2012

59.0

21.4

37.6

2013

58.8

21.6

37.2

Source: Annual Statistical Bulletin of the Central Bank of Iraq for the years 2011 - 2013

 I go back to Dr. Ali proposals "to resolve the occasion," as he called it in his study, and I shall paragraph after It also came with other cognitive levels of functional corruption in the state apparatus in general, which may reduce the success rate of these proposals, but this reservation applies to any legislation, regulations or instructions issued by state agencies as long as the implementation is, however, human beings:

 

-

In paragraph (a) call Dr. Ali to avoid the imposition of the ceiling on dollar sales, but not to the central declaration of willingness to satisfy demand as long as this was linked to the basic needs being identified with high professionalism.

 

 

I can not help here only endorse the view of Dr. Ali, but I see the need to return to the foreign exchange regulations issued by the central bank and set conditions and controls to respond to requests for transfers and legitimate but on the condition that this return will be for their specific end at the demise of the justifications Iraq is in a state of war and preserve the unity of the country's integrity and advancing to the others.

 

 

In paragraph ( invite the researcher to avoid reducing the dinar's exchange rate, but if it becomes unavoidable. Taking with him agreed on the need to avoid the formal reduction, I think that it would be a reality De-facto, but I see that accept a reduction deliberate dinar and on sound economic fundamentals bring him closer than the price the tie instead of leaving an opportunity for speculators and people of influence to enrich illegal, but I think that such a reduction that makes imports more expensive than it was in the hope that this will improve the competitive advantage of local products, although the level of the lowest quality.

 

 

Centered paragraph © received the banks control of the dollar and its commitment to the financing of imports set out in the documents, but I must to show here that the banks, under the international norms for Documentary Credits UCP 600, does not deal with goods, but the documents submitted as seem on the face of sound, either Why containing boxes and containers The bank is not part of the thing, and may not be downloaded from the responsibility to verify the imported goods This is the responsibility of Customs departments, which have a responsibility to examine the contents of the boxes, containers and their conformity with the description of the goods and quantities according to shipping documents and business listings.

 

 

Since it was impossible to banks accounting for goods covered by letters of credit and its contents funds, I invite here to subject merchandise for inspection in the export and airports ports in countries of origin, and this is not a fad, and God forbid fads, they are well-known and common practice, and there are many companies that examination Before shipping the goods and issue a certificate of Bmtabguetha description appearing in the documentary credit and will result here on customs departments for greater efforts to address the gaps that accompany an audit contents of the boxes, containers and tallying the commercial lists attached documents. In order to be proposed in practice must be a minimum amount of credit that is subject to the condition examination Let this be a hundred thousand dollars or more to reduce, for example.

 

 

Another the responsibility we request and strongly engaged in banks documentary credits to the private sector which should make responsible effort to examine the credibility of the preliminary list Pro-forma Invoice any nature and quantity of goods to be imported and the credibility of the importer and this can be achieved style "moral persuasion" that the central bank can be exercised by the banks Since he has the means and methods known by its expert.

 

 

In paragraph (E) call Dr. Ali to the formation of economic policy of the professional teams of experts and representatives of relevant ministries monitors the markets and trends demand and the state of the stock of goods, and here will be on the circuit intensive care by choosing from a hard on corruption for this purpose, a daunting task without a doubt.

Once again, I see that we must accept a reduction or a calculated reduction of the rate of the dinar exchange rate and must accept the unacceptable rate of inflation on the one hand and work on the other hand to mitigate the negative effects of the declining purchasing power of low-income public and the poor, and here I agree with Dr. Ali calling in paragraph ( d) to care by improving the institutional and logistical infrastructure for the distribution of ration and management and the elimination of corruption that is in them.

(*) Banking expert is currently working as a consultant for the province Commercial Bank for Investment and Finance

Copyright network Iraqi economists. Permission to quote and re-publication, provided that the source

February 21, 2014

http://iraqieconomists.net/a

Edited February 23, 2015 by TBomb

[Tacman]

Thank you Yota and TBomb.  This was surely an interesting read and leads me to believe that they have little faith and are frightened of taking the full step toward financial independence.  They keep dancing with this issue and the music is getting old!  

[yota691]

Economic center calls for tighter controls on foreign exchange mechanisms and sell the dollar in Iraq

By Mohammed Emad ten twenty-four 24/02/2015 | Views: 303
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Brother - Baghdad

Demanded that Iraq Center for Economic notification, the Central Bank of Iraq, tighten controls on foreign exchange operations in order to prevent money laundering and the monopoly of foreign remittances and speculators control the process.

Dergham said Mohammed Ali, chairman of the Economic Media Center in a press statement today that "dealers are used to the extent of more than ten years on the bank to adopt a reference to convert the currency and buy the dollar as a government entity can be a solid and reliable operations."

He pointed out that "despite some problems, but that the bank has succeeded over the years to contain the dollar market and refer the task of the banks as they are true, they need to tightly controlled its operations, especially the private banks that have not practiced banking properly," explaining that "oversight will ensure justice mechanisms conversion and prevent money laundering and terrorist financing and knowledge of the currency in which it was carried out by the central bank in the country paths. "

He pointed out that Mohammed "banks in Iraq need to be a transition period to evaluate their work," and expressed "his belief that the market will not rise because the speculators in the main banks were responsible for the high prices of the dollar in the past period and that this new mechanism Stnasabhm."

 

The President of the Economic Media Center that "the central bank's assessment of the demands of the banks deal with this experience and have the irrevocable line in the event of failure."

[Butifldrm]

 

 

02/23/2015 (13:07 am)   -   the number of readings: 457   -  number (3296)

 

 

Economic Commission: Iraq has 16 prominent experts in the planning over the last decade .. and watching the work of the four Ministries

BAGHDAD / Mohammad Sabah 

 

In the House of Representatives Committee confirmed that the economic decline in the government's performance and sagging state institutions due to poor planning, revealing the migration of 16 of the most prominent and the Ministry of Planning and experts over the past decade. The committee said it was monitoring the work of four ministries and independent bodies are the investment and the central bank, confirming that it was involved in a legal amendment of the Investment and the Central Bank.

 

He says Harith Chanchal, vice president of the Economic Committee in the House of Representatives, said that "the work of the Economic Commission limited follow-up work of the ministries of trade, planning and finance, industry and minerals and investment authorities and the central bank," pointing out that "all the concerned ministers and the heads of these bodies has hosted the Commission to discuss the possibility of developing the economy and investment. "

He said Chanchal in an interview with the "long", saying that "one of the biggest problems facing the work of the Ministry is planning to leave more than 16 experts out of Iraq over the past decade, causing weakness of the work of the ministry as a solution incompetent people in their place."

And on the assessment of the Economic Commission for the performance of the Ministry of Industry and its affiliated institutions, Chanchal says that "the ministry Off After converting companies and laboratories affiliated to the self-financing as a result of lack of support from the state of the economy has led to sagging in the number of employees," revealing "the presence of more than 174 funded company self stopped working and keep track of the Ministry of Industry and Minerals. " For his part, says MP Osman Tahir Haji, the other member of the Economic Committee, that "the Commission has distributed its members to five sub-committees, each supervised by the Ministry or body," noting that his committee "is trying to provide support to the agricultural, tourism and industrial sectors."

Attention Haji, told the "long", that "the Iraqi state began to spend on religious tourism sector rather than a tributary of the economic sector through the allocation of large religious tourism money in the events."

In turn, MP Najiba Najib reveal "Economic Commission to develop a comprehensive plan for the next four years include the amendment of the Investment Act in a manner consistent with the development of the countries of the world."

According to Najib, in a telephone conversation with the "long", to "the existence of major problems facing foreign investment companies that intend to enter into Iraq eg difficulty obtaining visas by the Ministry of Interior as well as the allocation of land for investment process."

Draws Kurdish MP to "the reluctance of local and foreign banks for the funding and support of investment projects," indicating that "the problem of the Iraqi economy lies in the central provinces not to grant freedom of investment to attract foreign companies."

Reveals a member of the Economic Committee that "the new amendments, which will occur on the investment law will give the provinces the powers of investment and the agreement with foreign companies," emphasizing that "the strategy committee focused on encouraging the private sector and give it a significant role in the construction and reconstruction process."

And on the performance of the central bank and the challenges it faces in the current financial crisis, MP Najiba Najib says "the central bank law is being amended by the State in order to send it to parliament," she said, adding that "the Bank's management conservative on one of the paragraphs of the federal budget, which provides for the identification sales of the currency. "

Najib stressed that "the central bank will lend the government to cover the deficit indirectly through the purchase of treasury transfers the interior or exterior of the Ministry of Finance and the interest rate," pointing out that "the central possesses a reserve of about 77 billion dollars."

 

http://www.almadapaper.net/ar/news/482407/%D8%A7%D9%84%D9%84%D8%AC%D9%86%D8%A9-%D8%A7%D9%84%D8%A7%D9%82%D8%AA%D8%B5%D8%A7%D8%AF%D9%8A%D8%A9-%D8%A7%D9%84%D8%B9%D8%B1%D8%A7%D9%82-%D9%81%D9%82%D8%AF-16-%D8%AE%D8%A8%D9%8A%D8%B1%D8%A7-%D8%A8%D8%A7

[yota691]

02/24/2015 08:55


Claims to tighten controls on foreign exchange



 

 

 

BAGHDAD / Obelisk: Student Iraq Economic Media Center, the Central Bank of Iraq, tighten controls on foreign exchange operations in order to prevent money laundering and the monopoly of foreign remittances and speculators control the process.

The lion Muhammad Ali, chairman of the Economic Media Centre, in a press statement seen by the "Obelisk", on Tuesday, said that "dealers are used for more than ten years on the bank to adopt a reference to convert the currency and buy the dollar as a government entity sober can be trusted and their operations."

He pointed out that "despite some problems, but that the bank has succeeded over the years to contain the dollar market and refer the task of the banks as they are true, they need to tightly controlled its operations, especially the private banks that have not practiced banking properly."

 Explaining that "oversight will ensure justice and conversion mechanisms to prevent money laundering and terrorist financing and knowledge of the currency in which it was carried out by the central bank in the country paths."

He pointed out that Mohammed "banks in Iraq need to be a transition period to evaluate their work," and expressed "his belief that the market will not rise because the speculators in the main banks were responsible for the high prices of the dollar in the past period and that this new mechanism Stnasabhm."

The President of the Economic Media Center that "the central bank's assessment of the demands of the banks deal with this experience and have the irrevocable line in the event of failure."

He was on the Keywords Governor of the Central Bank of Iraq may face yesterday discontinuation of the auction currency to ease the pressure on the central bank.

[Butifldrm]

The CBI has posted no currency auctions since the 19th of February.  The economic reform of the currency auction appears to have been put in place.  We will have to find another source to determine the Market Rate and the spread.  This sure is fascinating. IMO

http://www.cbi.iq/documents/CBI_FOREIGN_EXCHANGE_AUCTIONS.pdf

[wbuse984]

Agree with you Buti, the amount of interesting Financial (both good and bad) look like a smoke screen for the real economic reforms most likely being discussed and finalized behind the scenes. much has bee said but more important is what they are actually doing in light of the information presented in the news...thanks to you and Yota for the posts...very interesting  and  and :soon:

[TQueezy]

These people, "experts" seem to come out of the woodwork to criticize the CBI's actions anytime something drastic is done like stopping the remittances auction.