Source: Middle East - 28/09/2009
CBI warns of increasing inflation indicators
10.8% increase in average prices of goods
Dr. CBI launch of warnings, the second in one week, because of his demand to the government's continued financing of the budget by issuing treasury transfers, at the time suffered by the bank already represented more pressure in the high levels of inflation and low foreign exchange reserves, which threatens to seriously fluctuations described in If the continuation of these pressures.
The Bank in a statement obtained by «Middle East», a copy of the current inflationary conditions indicators began to mount, where the record set the basis for the annual consumer price data in August (August 2009) a significant increase 10.8 per cent, in the face of limited reserves of Central Bank Iraq's foreign exchange that have not been any evolution in the direction of increase over the past ten months of the current fixed rates, and about the limitations of the reserves of foreign exchange that do not provide adequate protection for economic stability through the adoption of easy monetary policies very excessive, such as allowing the treasury to accept money orders and replace the compulsory reserve legal, he promised that an easy way to finance projects and wide to find financing the investment budget for programs, including the supplementary budget, the stability of the country will descend inevitably lead to very serious levels of degradation, including the risk of deterioration of the exchange rate and inflation to decline again and the loss of macroeconomic stability.
Authoritative source, the bank confirmed the «Middle East», saying: «is the compulsory reserve (legal) imposed by the Central Bank of Iraq as a proportion of deposits that banks deposit with the various Iraqi, one of the means of monetary policy used by the central bank works both ways: First, protecting the deposits of public risk liquidity, which may be exposed to the banks, and second as a means to control an important aspect of liquidity created by banks to expand lending through the deposits and borrowing through the multiplier, increasing the money supply and increases the speed of money circulation and the pressure generated by the recent strong demand for goods and services, pay up inflationary phenomenon, which would intersect and objectives of monetary policy in the forefront of basic stability in the general price level by reducing rates of inflation ».
He added: «So, the management of the compulsory reserve (legal) as well as to optimize the management of foreign exchange reserves manner that is consistent with all of local reserves, are signs go together and represent the strength of the balance sheet of the Central Bank in promoting monetary stability and controlling the flow of liquidity and the face of internal and external shocks affecting the overall stability of the country ».
He added that he and «Notwithstanding the foregoing, and an estimate of the monetary authority of cruel and unusual conditions suffered by the electric power sector, especially facing a dilemma funding for urgent projects, the central bank could accept Isaddarip special one-year interest rate of 2 per cent of remittances, which in turn bought Treasury Bank Rivers of the Ministry of Finance, and the establishment of such remittances by 50 per cent of the compulsory reserve (legal) of the bank in question and $ 2.8 trillion dinars are converted in foreign currency reserves of the Central Bank of Iraq Foreign Affairs.
The acceptance of treasury transfers as part of the legal reserve back an exceptional operations handled by the secondary market open that is consistent with the implementation of the functions of monetary policy, and it was one of the operational policies accepted a limited exception, although it is not perfect and can not be expanded on.
On this basis, was admitted to practice one-time and exclusively in accordance with the accounts maintained monetary stability at a critical point can not be Beat.
Therefore, the expansion in the mechanism mentioned above, the acceptance of more treasury transfers replacing the compulsory reserve (legal) to fund a series of projects and other sectoral ministries, such as transportation or the secretariat of Baghdad or other, for example, according to versions of showers in the last term on the Central Bank of Iraq as a funding easy, the central bank would turn to a financing institution projects to replace the investment budget, which would eliminate the role of the monetary authority and its core functions and guide the central bank and duties of the objectives set out in the law of the Iraqi Central Bank ».
The source said: «The practice of government financing pressure on an ongoing basis to the Iraqi Central Bank through the expansion of the issuance of treasury transfers replacing the mandatory reserves for banks to finance expenditure, monetary policy will lose their capacity to use tools to achieve the goals of stability and combat inflation, which began to suffer from the country in recent times and the associated imbalances by broad economic exposure joints production and living standards at risk of degradation, then the Central Bank of Iraq will bear the blame for the missed opportunities for economic balance and stability of the waste of the country because of continued government intervention and negative effects on the performance of monetary policy ».
JUST RV ALREADY WILL YA!!!
CBI warns of increasing inflation indicators
10.8% increase in average prices of goods
Dr. CBI launch of warnings, the second in one week, because of his demand to the government's continued financing of the budget by issuing treasury transfers, at the time suffered by the bank already represented more pressure in the high levels of inflation and low foreign exchange reserves, which threatens to seriously fluctuations described in If the continuation of these pressures.
The Bank in a statement obtained by «Middle East», a copy of the current inflationary conditions indicators began to mount, where the record set the basis for the annual consumer price data in August (August 2009) a significant increase 10.8 per cent, in the face of limited reserves of Central Bank Iraq's foreign exchange that have not been any evolution in the direction of increase over the past ten months of the current fixed rates, and about the limitations of the reserves of foreign exchange that do not provide adequate protection for economic stability through the adoption of easy monetary policies very excessive, such as allowing the treasury to accept money orders and replace the compulsory reserve legal, he promised that an easy way to finance projects and wide to find financing the investment budget for programs, including the supplementary budget, the stability of the country will descend inevitably lead to very serious levels of degradation, including the risk of deterioration of the exchange rate and inflation to decline again and the loss of macroeconomic stability.
Authoritative source, the bank confirmed the «Middle East», saying: «is the compulsory reserve (legal) imposed by the Central Bank of Iraq as a proportion of deposits that banks deposit with the various Iraqi, one of the means of monetary policy used by the central bank works both ways: First, protecting the deposits of public risk liquidity, which may be exposed to the banks, and second as a means to control an important aspect of liquidity created by banks to expand lending through the deposits and borrowing through the multiplier, increasing the money supply and increases the speed of money circulation and the pressure generated by the recent strong demand for goods and services, pay up inflationary phenomenon, which would intersect and objectives of monetary policy in the forefront of basic stability in the general price level by reducing rates of inflation ».
He added: «So, the management of the compulsory reserve (legal) as well as to optimize the management of foreign exchange reserves manner that is consistent with all of local reserves, are signs go together and represent the strength of the balance sheet of the Central Bank in promoting monetary stability and controlling the flow of liquidity and the face of internal and external shocks affecting the overall stability of the country ».
He added that he and «Notwithstanding the foregoing, and an estimate of the monetary authority of cruel and unusual conditions suffered by the electric power sector, especially facing a dilemma funding for urgent projects, the central bank could accept Isaddarip special one-year interest rate of 2 per cent of remittances, which in turn bought Treasury Bank Rivers of the Ministry of Finance, and the establishment of such remittances by 50 per cent of the compulsory reserve (legal) of the bank in question and $ 2.8 trillion dinars are converted in foreign currency reserves of the Central Bank of Iraq Foreign Affairs.
The acceptance of treasury transfers as part of the legal reserve back an exceptional operations handled by the secondary market open that is consistent with the implementation of the functions of monetary policy, and it was one of the operational policies accepted a limited exception, although it is not perfect and can not be expanded on.
On this basis, was admitted to practice one-time and exclusively in accordance with the accounts maintained monetary stability at a critical point can not be Beat.
Therefore, the expansion in the mechanism mentioned above, the acceptance of more treasury transfers replacing the compulsory reserve (legal) to fund a series of projects and other sectoral ministries, such as transportation or the secretariat of Baghdad or other, for example, according to versions of showers in the last term on the Central Bank of Iraq as a funding easy, the central bank would turn to a financing institution projects to replace the investment budget, which would eliminate the role of the monetary authority and its core functions and guide the central bank and duties of the objectives set out in the law of the Iraqi Central Bank ».
The source said: «The practice of government financing pressure on an ongoing basis to the Iraqi Central Bank through the expansion of the issuance of treasury transfers replacing the mandatory reserves for banks to finance expenditure, monetary policy will lose their capacity to use tools to achieve the goals of stability and combat inflation, which began to suffer from the country in recent times and the associated imbalances by broad economic exposure joints production and living standards at risk of degradation, then the Central Bank of Iraq will bear the blame for the missed opportunities for economic balance and stability of the waste of the country because of continued government intervention and negative effects on the performance of monetary policy ».
JUST RV ALREADY WILL YA!!!