Requirements for achieving monetary policy objectives until 2020

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Requirements for achieving monetary policy objectives until 2020

Post  Admin on Tue May 09, 2017 8:48 am

The monetary policy is one of the most important economic policies aimed at achieving economic stability and stabilizing the exchange rates which increase the national economy to be effective and effective to meet the economic challenges.

Achieving a reserve of foreign exchange currently stands at 49 billion dollars and stabilizing the Iraqi dinar against the dollar is necessary and appropriate, As the foreign exchange window held by the central role of positive in maintaining an appropriate level of exchange rate and install.

The Central Bank of Iraq has taken several steps to expand the list of tools available for monetary policy and reserve coverage required to include government deposits and granting facilities on deposits, which are short-term in order to allow banks to manage the liquidity situation more effectively.

It is possible to determine the most important achievements of the monetary policy instruments during the years 2004 and 2006, the first of which is the relative stability of the exchange rates and the tight monetary policy, the stability of the financial system, as well as the reduction of the inflationary phenomenon, control and manage liquidity levels and stimulate banks to move to the market.

As the Central Bank is currently implementing its plan for the coming years, we believe that a series of observations will be considered, including monitoring the implementation of the central strategy and future monetary policies until 2020 with the contribution of the banking sector to GDP.

 It is also necessary to look for new policies that achieve this objective and allow banks Governmental and private sectors to participate in the growth and investment in accordance with the mechanisms and policies can be applied without imposing strict policies and give sufficient flexibility, and address the gap between the state's fiscal policies and monetary policies adopted by the Central Bank of Iraq and requirements to combat the pressures Inflation and reduce current spending and coordination in plans and programs to achieve the rescue of the Iraqi economy from financial collapses.

It is important to activate the monetary policy to support the private banking system and review the lending policies and mechanisms of credit risk management in the granting of credit and small and medium loans and investment in productive and investment sectors that achieve a clear cash flow and revive the economic cycle, which contributes to economic development and diversification of financial resources to the public budget.

It is necessary to develop, support and stimulate the Iraqi market for securities and to find the means and tools that push towards raising the prices of the market index and companies in accordance with their assets and production standards and profits, not less than the value of real shares and prevent speculations that harm the assets of Iraq in proportion to its real and actual value.

It is important to follow closely the instructions of the foreign exchange window issued in 2017 and regulate the sale of the dollar and determine the role of banks in the mediation between the customer and the central, in addition to determine the responsibility of the ministries of trade, finance and planning in the violations committed by some customers and not only to blame the banks.

The establishment of a special fund for the certificates of deposit issued by banks wishing to address the deterioration of stock prices in the Iraqi market for securities and the addition of a new banking management of the current investment to stimulate the investment climate in the market as well as increase the volume of bank deposits, which leads to increase their investment activities in all economic sectors and thus achieve Positive feedback for investors.

The Board of Directors of the banks approved an operational risk strategy and implemented it by the executive management of the bank to ensure the identification of operational risks related to all types of banking products. Reconsideration of the provision for doubtful debts according to the regulations and the return of mortgages and additional time for banks to liquidate these debts, And most of the debtors migrated outside their cities in Iraq for security reasons beyond their control and these ratios lead to a reduction in their profits actually achieved as a result of the deduction of these percentages of net profit and thus affect the activities of investment banks New.

The restructuring of the banking sector, especially the government sector and the study of privatization of some of its departments and branches and to activate the banks operating expansion and diversification of banking services, especially increase its share of credit and investment in a balanced balance with the total revenues to become these banks an effective basis for economic growth to move away from the monopoly of some banking operations and the blocking of government activities And public institutions for private banks.

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