Thread: What is central in the Economic Vision concerning the Daily Auction

What is central in the Economic Vision concerning the Daily Auction

And our response from the Central Bank of Iraq we have published an article on the economic researcher Dr..Smeisim peace, pursuant to freedom of opinion, according to the letter carried by the (term) as a cultural media operate without the determinants of professional writers to curb service for the public good is to publish the response as:

Mr. Editor, the long-respected response to a newspaper article under the heading: economic vision in the central bank auction
Nahdikm best greetings .. We would like to refer to the article on page X in the Al-range in number from 1452 to 10/3/2009 under the title mentioned above.

Regardless of the motives behind the writing of such articles and personal symbols, which I found important in the Central Bank of Iraq, unfortunately, very touched and talk to anyone who is among the noted the presence of conflict within the Central Bank of wills in the formulation of a mechanism of action, we would like to point out that no basis for such Altcolat which intended to harm the country's economic policy, especially monetary policy, which is entrusted with many of the trends for addressing some of the ignorance and good intentions, however, assuring that the decisions taken by the Central Bank is issued by the board, the Council, which owns the intellectual and professional identity, unlike that of what the writer in her article.

The central bank did not receive orders from an international fund was established according to the International Monetary as stated in the article, but that the Iraqi government was in a whole program of corrective action with the International Monetary Fund in order to extinguish the agreement between Iraq's foreign debt that exceeded 120 billion dollars and the current government was able to cancel more than 80% of these debts and burdens, which are remnants of the former regime in wars and conflicts for three decades. The agreement with the International Monetary Fund to make some minor adjustments in economic policy was based on the UN Security Council resolution No. 1483 in May 2003 which linked the reduction of external debt with the IMF program of corrective mentioned.

Regrets the Central Bank of Iraq to those of the writers lost the declining intellectual identity and awareness of what is going on and in the throes of contradictions Faqraly verbal knowledge and the basics of the simplest principles of economics.

In spite of this, we would like to make it clear that the Central Bank of Iraq strategy in building stability in the course of this period of transition and difficult over the Iraq, which seeks to provide a stable environment for growth began to attract Baktall cash becomes today a strong and solid at every fair-minded people of our people, stressing the the following:

First: the foreign currency auction is a means of indirect monetary policy affecting the cash basis in order to control the country's total demand and inflationary pressures. Where the three targets that the auction is

1 - an intervention to achieve stability in the value of the Iraqi dinar by defending the exchange rate Gyroscopic reflected positively on the overall level of prices, especially of imported final goods and production inputs and strengthen the export base.

2 - as a means for the application of indirect instruments of monetary policy in the management of liquidity and control over the economy Mnasebha, is a case of the application of open market operations required continuously for the balance of the money market and strengthen the opportunities for financial stability.

3 - a key source of financing in the private sector to trade in goods and services needed by the Iraqi market and funded essential.

Second: as far as the liberalization of current account of balance of payments of Iraq, we would like to clarify the following:

1 - The Central Bank of Iraq and to the extent that it is watching the movement of capital flows into and out of the country, it finds its natural economic phenomena that help to maintain the stable financial system based on competition in the market and generate at the same time into desirable in the international financial market and open wide in banking with the world. In spite of this, that and the money flows that should deepen Atafee surveillance and detection of the movements of the money is legitimate and does not contravene the law of the legal fight against money laundering and funding crime and terrorism, or even to evade other forms of obligations to the government authorities Kolajhzp tax, financial, or contravention of instructions and regulations control of the Central Bank of Iraq, which is also determined, for example, amounts to Astosmaralmassarv of foreign assets, which represent another form of the flow of domestic capital out of the country.

2 - but the cases were directed to restrict the conversion of external Aotguenin the flow of money out of citizens, is the tendency to Ainsjm and the freedom of foreign transfers and Iraq's commitment to international conventions and, in particular, the financial application of the provisions of Article VIII of the Convention on the International Monetary Fund, which obliges member states Batmad the freedom of foreign transfers and lift restrictions on the movement of funds of citizens without restrictions, except regarding the legal consequences of breaches of money laundering and, as mentioned previously.

So any of that prevent or restrict outflows not only helps to generate a parallel exchange market and encourages illegal at the same time, the phenomenon of capital flight abroad, but through legal channels and other vague, non-banking channels. Which is all the way in reducing the ability direct control over at the same time, the cost of operations and the burden of indirect control. as well as to generate negative financial environment weakens the foreign investment climate in Iraq does not encourage the inflow of foreign capital inflows and Vialaql intersect with the principles enshrined in the Investment Law No. 13 of 2006.

3 - The economic problems were severe external to the group of countries of South-East Asia during the years 1997-1999 (for example), has mainly resulted from the phenomenon of the flight of foreign capital which had been endemic on a large scale in those countries, which was then concentrated investments foreign direct, particularly in the investment portfolios of financial bonds and deposits, and various debt instruments with high liquidity, the weakness of international reserves available to the monetary authorities in those countries which offer the balance of payments deficit to an unprecedented result of the sudden flight of foreign capital, short-term, as reflected in the collapse of exchange rates of Asian currencies.

In spite of this, however, such concerns are still a limited impact on the level of Iraq, in order to double the flow of foreign capital to the moment. However, seeking monetary policy of the Central Bank of Iraq to the formation of sufficient foreign currency reserves, concentrated mainly based on the likelihood of facing any emergency may be exposed to the external balance of the national economy because of the potential for currency speculation and capital flight abroad, suddenly, as well as the sensitivity of any other surprises that may be harmful to the national economy caused by the strong shocks due to adverse external financial movements.

4 - therefore does not support monetary policy to the Iraqi Central Bank to restrict the movement of cash flows to and from outside the country as long as does not intersect with the controls, regulations and instructions in force and did not conflict with the terms of conversion, especially outer Act No. 93 of 2004 on combating money laundering and funding crime and terrorism.

Finally: Please see the response and the deployment on the front pages of your newspaper, and the Central Bank of Iraq and the board reserves the right to file a lawsuit that the article had touched Chkhosa and intellectual figures and was responsible for national monetary policy of the country. With appreciation.
On behalf of an authorized
Central Bank of Iraq

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