The central bank and government borrowing

1/16/2016 0:00

Ali Hassan al-Fawaz

The problem of economic Iraq has become even more realism to the treatment, and the search for the means to control the effects of the sustained decline in oil prices, and more Maatrah day of the ideas and processors on national loans that are related to the ability of the Iraqi Central Bank to help tackle the financial crisis, but this help raise around sensation by, as well as the legal coverage of loans the central bank intersect with the federal government's policies on the other hand, Article 26 of the Central Bank Law stipulates prevent the central bank from lending to the government, a stiff material, placed at a certain time in response to the former regime's policies, this Tomb Mr. appearance of Mohammed Saleh Prime Minister for Economic Affairs, who stressed the importance of amending this article adviser, and toward allowing the central bank to lend the government money from the treasury, and according to what is the case in many countries of the world, to be lending at any time

But to be in accordance with the urgent need for the state to financial liquidity.

This scenario puts the problem in front of readings need for clarity, as the financial crisis linked to the nature of the oil rentier economy, which is where many of the Egged horizon to overcome the crisis in the near time, and with the aggravation of lower prices in the global markets.

 Hence takes the subject of lending problematic situation between legal amendment, and the objections that you find in it an attempt to bypass the national reserves, and despite the fact that Prime Minister Advisor puts a vision about the loan mechanism, according to certain ratios contribute to the reduction of the deficit, the government and help to cover government spending, However, the topic will take longer to agree upon, especially with the rising voices about the seriousness of the policy of borrowing from foreign banks, and their impact on the economic reality, difficult and obligations imposed by these banks.

The deal with this problem needs to approach and to the commitment, because it will acquire a political dimension, as it will put many of the political parties before the debates and positions, perhaps in front of the exchange charge, which will be a source of hindrance for approval first, and to agree on marketed within the cautious policies path to address the escalating problems of the Iraqi economy , as well as a trend and a national to put the loans in the context of the search for other mechanisms to deal with these problems, and the conversion of borrowing to the field of support to the private sector, or to support the productive sectors such as agricultural, industrial and commercial sector, which could have an important role in maximizing national wealth, and reduce the Maewagha manifestations such as unemployment and indiscriminate import and vulnerability in the areas of development and services and the weakness of strategic programs and projects.

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