Stability in the exchange rate is achieved through comprehensive financial and banking reform

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Stability in the exchange rate is achieved through comprehensive financial and banking reform

Articles
Samir Al-Nusairi
   

In light of our follow-up to the measures of the Central Bank and the government to control the stability of the exchange rate, we clearly and accurately noticed that there is an organized lobby working against achieving monetary stability, led and implemented by multiple parties linked to speculators and corrupt people who have a special agenda to weaken the national economy and harm it by fabricating news, media statements and economic analyses. It is incomplete and transforms it from reassuring news for the market and citizens into news that confuses the market and creates panic among citizens, and this is what is actually happening now.

 

Which requires clarification here. Almost ten years ago, especially after the financial and security shocks in mid-2014, the culture of relying on the Central Bank to confront economic and financial crises and challenges took root. This was done by using its means and tools related to monetary policy to overcome the government’s lack of liquidity, its inability to pay salaries, and the failure to implement...

 

Its government programs rely on foreign monetary reserves, which in reality are not the government’s reserves, but rather the central bank’s reserves to control the stability of the exchange rate according to the target, cover the local currency in circulation, and cover imports. Because of these accumulated crises, the central bank was previously forced to lend to the government up to 46 trillion dinars during the past years. None of it has been paid so far, which has reflected in this policy exposing the national economy to complex problems.

 

The solution is always the central bank, and it is also held responsible for the problems of other concerned parties, which is not its primary role, as it is not responsible for the deficit in non-oil revenues, the deficit in the balance of payments, and the deficit in... The trade balance is not responsible for the rise and fall of global oil prices.

 

Therefore, the obligatory cash reserve rose and fell due to these wrong policies that were not based on clear and specific economic strategies and approaches. Therefore, the return of stability in the exchange rate to its rates targeted by the Central Bank is achieved with the support of the concerned authorities in the government by activating other productive sectors and reforming the financial and banking sector. And drawing up clear financial policies and in coordination with monetary policy and its currently approved applications and tools, and overcoming the challenges of achieving economic stability, which means achieving stability in the financial system and the monetary system.

 

This is not only the duty of the central bank alone, but rather it is a fundamental duty of financial policy and the government’s methodology in managing the economy and activating sources of national income without Oil, supporting, protecting and encouraging local production, activating dealing in the Iraqi dinar in all internal monetary trading activities, and expanding the use of electronic payment methods whenever possible.

 

The expectations of the Central Bank and specialists that the exchange rate will return to a stable state requires time, which we hope will not be long, despite the daily and new procedures adopted by the Central Bank in issuing packages and instructions and taking daily executive measures for the purpose of finding facilities and openness to all segments that need the US dollar in foreign transactions at the official rate. He concluded a series of negotiations and agreements with the US Treasury, the US Federal Reserve, and some international correspondent banks to regulate foreign trade with China, India, Europe, the Emirates, and Turkey, and to adhere to the standards of international banking transactions.

 

We affirm that the criterion adopted and confirmed by the Central Bank and specialists in achieving this is the availability of cash reserves of foreign currency exceeding 100 billion dollars and the continued flow of dollar revenues from oil sales on a daily basis in accordance with the quantities planned to be marketed in 2023 and at the prices of the product that are expected to continue at their current limits, or as energy experts expect that Prices exceed $100 at the end of this year.

 

 

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Added 10/15/2023 - 10:55 AM

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Al-Nusairi calls for supporting and implementing the Central Bank’s measures in financial and banking reform

money and business
   

Economy News _ Baghdad
Advisor to the Iraqi Private Banks Association, Samir Al-Nusairi, called for the ministries, concerned authorities and banks to support and implement the Central Bank’s procedures to achieve financial and banking reform based on the axes of its new strategy, which relies primarily on regulating foreign trade, maintaining the general level of prices, and reducing the inflation rate, which is one of the basic goals of the policy.

 

Cash.

 

Al-Nusairi indicated in an interview with Al-Eqtisad News that the percentage of external transfers on the electronic platform exceeded 95 percent of merchants’ daily transfers, and efforts are continuing to conclude agreements with countries to adopt their local currencies such as the Indian rupee, the Turkish lira, the Emirati dirham, and the euro for direct dealing instead of the US dollar. .

 

He stated that it is in line with the campaign to support the Iraqi dinar in internal and external transactions, the Prime Minister’s announcement of Iraq’s desire to enter the BRICS group, as approximately 70% of the total trade exchange takes place with China, India, and Brazil, in addition to the fact that 50% of Iraq’s oil exports are through the BRICS countries. This is an important step if the group accepts the joining of Iraq.

 

Al-Nusairi confirmed that the Central Bank’s departure from the platform method in 2024 will contribute to the fact that external transfers will be made directly between the Iraqi merchant and the exporter through the correspondent banks that will be approved and international companies that undertake pre-audit operations. Al-Nusairi concluded his speech by saying that the challenges faced by the Central Bank and the government against the financial and banking reform strategy, and that what is spread by speculators, the corrupt, and their media and analysts, will not last long, as the battle will inevitably be decided by completing comprehensive financial and banking reform processes and stabilizing the exchange rate within the targeted limits.

 

 

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Added 10/17/2023 - 10:55 AM