***** Advisor: Central Law prevents investment cash reserve

2/11/2014 0:00

BAGHDAD Mustafa al-Hashemi 

The cash reserves of the Central Bank of the most prominent is the independence of a financial institution designed to maintain the market exchange rate of the local currency stability to foreign counterparts, and at a time when the hints is thought that the show's central bank will act in this reserve, matched by official assurances that the cash reserves of the Central Bank is not permitted to prejudice it never has also said the government should not lend any reason whatsoever. 

It consists of strategic reserves of gold, silver, convertible currencies, as well as some currency that can be converted into either convertible into gold or currencies. 

In this context, explained the academic banking advisor Dr. Essam Mahouelle: in Iraq, a country of oil, part of the oil revenues shall be deposited with the central bank as a reserve Offer no government may ask the central bank to provide them with any amount of this reserve because they (ie the government) has taken its share of the oil revenues, as well as taxes and introduced within the state budget. 


The central bank governor Dr Ali Alak denied earlier in the central bank's intention to invest its reserves of gold and currencies to oppose it with the goals of the reserves and the central bank law.



It comes after the Central denied what was quoted parliamentary economic committee of the central bank promised that he will invest its assets in foreign currency and gold early next year. 


He Mahouelle told (morning): The Central Bank maintains has reserves being owned by the people and for future generations, explaining that a portion of these reserves is used as a cover of banknotes issued within the country is a matter of confidence in the national currency, adding that the reserves represent international purchasing power and thus provide support important external value of the national currency in the times that shows where a deficit in the balance of payments. 

He continued at the present time, the Iraqi dinar is still suffering from the low rate of exchange against the dollar the currency of international as well as some other currencies.

Indicating that the reason is due to international sanctions and the issuance of UN resolution whereby withhold oil revenues from Iraq and deposited in a French bank in New York, Maady to lower the exchange rate of the Iraqi dinar is rapidly and is unprecedented in the history of the world's currencies until he reached the exchange rate of the dollar to 3,500 Iraqi dinars per dollar . 


He argued that after 2003 canceled the sanctions imposed on Iraq, but the dinar exchange rate against other currencies remained low due to the Chapter VII, who was standing in the way of the dinar against the return to normal.



And the central bank to sell the US dollar through the auction to dealers and private banks and through them to the public in order to maintain the stability of the market and prices Abv.ivkr that reserves of hard currency of 74 billion and $ 300 thousand, in addition to the current monetary mass in the market amounting to 40 trillion dinars .




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