Conscious / Strategy cash of the country: a climate of stability and economic development / Part I
Conscious / unconscious Center for Studies and Research / Consultant CBI d. The appearance of Mohammed Saleh
First: International reserves and build the external balance of the economy
Result of foreign exchange reserves is primarily a movement of the balance of payments or the external sector of the economy of the country, and he was being an increase or decrease in the light of these persistent external movement. The exercise of this reserve and the central function and fundamental barrier is being a "major shock absorber, leading to the continued stability of the national currency at the foreign currency.
So Accumulation of foreign currency at the CBI, which represents its international reserves have been through the establishment of the Ministry of Finance swap of its revenue in dollars, which is caused mainly from Iraq's oil exports to meet their access to Metrgbh of the Iraqi dinar source of the CBI, to cover the costs of local public to enter Dinar trading local source in the Iraqi market, but through the doors of exchange in the general budget of the State.
Since the task of the Iraqi Central Bank is to maintain the stability of the Iraqi dinar, which has been issued and disposed of it mainly through the general budget expenditures mentioned, according to the mechanism referred to in the above, Such that it could select the orientation of monetary policy of the Central Bank of Iraq and recorded them in how to use the dollar available to reserve a foreigner, in order to meet the expenses of the public and market transactions implications, derived mainly from government spending shift at a later stage to purchasing power, however, the public, traded and spent Kdinar Iraq in the daily dealings.
By so doing, became foreign reserves of the CBI prompt to deal directly with the market pressures and needs of foreign currencies, but in the framework of preserving the Iraqi dinar and its purchasing power over the durable cover and solid foreign currency.
Such a trend in monetary policy is one of the subsequent work and fundamental to the implementation of the objectives of the CBI, especially after that phase is over, dealing directly with the fiscal policy in the first stage mentioned above (ie, the stage of the replacement needs of the general budget of the Iraqi dinar some of the assets of the government's foreign currency And start regardless of the dinar over the expenditure of public Almoisanp) to start the second phase of this time to address the market demand for foreign currency, resulting as we have final expenditures for the government and mainly within the basic components of aggregate demand.
Explaining this regard Mayati:
1- Pursuant to Article 27 of the Code of the Iraqi Central Bank No. 56 of 2004, which provided the central bank to take over management of official reserves of foreign currencies to the country according to international best practices and targets of monetary policy.
And approved the bank to invest such reserves a range of assets, provided that guarantee liquidity without the risk of remembrance and achieve something of the dividend (and maintain the concept of liquid reserves, as always).
According to the Central Bank has adopted international standards in the management of reserves, this was the work of the foreign reserve investments to ensure that spare those reserves all forms of investment risk and ensure liquidity and safety and to graduate from the concept of central bank reserves in any way.
Coming diversification in various currencies through the adoption of the concept of currency risk to avoid the volatility of exchange rates and the concept of credit risk to avoid failure of payment and the concept of risk of interest rates to avoid investing in any securities of the Institutions of credit rating is low unreliable at all and other risks and rates recognized by the international standards for central banks .
2- Often the question arises as to the effect, why Esttmr side of the central bank reserves papers or bonds Iraqi government to know the dollar.
The answer, without courtesy is No, for the following reasons:
A - The market for our financial and publications AA Initial stock is still unfortunately do not have an international credit rating puts its cards in circulation in the global market credit rating is required of not less than AA Or Maimathlh to ensure that no loss and the power of liquidity. mutual exclusive As ashamed of central banks so the pattern of exercises investment in reserve to be subject to so-called mutual Baltmana mutual exclusive . . And if so what has to buy securities it is through the secondary market to international investment, according to the criteria adopted at the Central Bank and not the initial version of the market provided traded on world markets in order to be truly part of the reserve.
B - country risk Our country is still subject to the so-called specific types of risk, called risk countries, country risk Mkhaatrizaam which had been caused by economic and political changes of any country. But come on top of that the subject of risk (decrease in foreign currency reserves). And that this factor is one of the most important factors to be considered to Iraq from outside the economic entity. And any fluctuation reserve, or a change in the composition or less, or devote controls to restrict foreign exchange and foreign exchange and confusion on this subject, is the Association a sensitive indicator of the risk countries and puts the country in the lowest credit rating in terms of its worth and treat the outside world financially with a healthy and normal.
Sovereign risk C - that the issue of risk is more than countries and on a large scale so the concept of sovereign risk Sovereign risk . . Stating in this regard that our country has ranked since 1982 (after the Iran-Iraq war) in the group of high risk, where Iraq is occupied score of 23% compared to a country such as Sweden, who finished score 100%, and the sequence Iraq between international groups by degree of risk has occupied the 111 sequences, the last in the International Classification of the Group of high-risk, compared to the sequence (1) Occupied by Sweden, for example.
On this basis, lending to foreign banks to international entities subject to the concept of risk countries it is hedging its own balances in the reserve account known as a dedicated account transfer risk reserve A factor giving rise to the external borrowing of the countries at risk when borrowing from foreign banks, the benefits and obligations of the high, ever see foreign banks that the calculation (ie, a dedicated account reserve transfer risk), although he was a watered-down about the losses from bad debts or bad loans foreign, but it is at the same time raises the degree of risk of lending to countries suffering from the subject countries, the risks cited above, which leads to unjust conditions in the charging of interest or reimbursement arrangements, and guarantees, and others.
3- Not subject the investment reserve of foreign currency in essence to the concept of financial investment or non-monetary, but subject always to the concept of management of the Reserve with a total investment of a cash almost like investment banks, Iraqi surplus cash and reserves in the accounts of deposits with the Central Bank of Iraq, so called foreign assets and invested some forms of foreign government bonds high rating, foreign reserves and not investments. remunerations And foreign reserves are classified by two types of reserves are either generating revenues remunerations Or free of royalties and are typically placed in current accounts with international banking institutions, particularly central banks in the industrialized world or the first and by more than 90% A departure from the incubator's investment in foreign reserves at this early stage in the management of custodial Khater will More complicated formulas in formulating the relationship between returns and risk management rests with the so-called sovereign wealth funds.
4- Our country, which, still country risk Subject to the dangers of countries under the so-called country risk As mentioned above is built on two levels:
Economic level: Königswinter foreign reserves at the Central Bank Ethirp to a country whose remission annual external to the private sector alone, about 26 billion dollars, a net importer of almost everything and a base of production in the weakest point in the history of Iraq's economic and that the source of a single commodity is oil They are subject to influence of external factors at the maximum point to represent today's energy markets and global demand as well as the general international economic situation.
Accordingly, hedge foreign exchange reserves of Kaloaniattiyat current minimum economic risks to the country's foreign which is still uncertain, and very worrying and requires intense anticipation.
As for The political level: Iraq is still subject to the terms of the regrettably so-called Chapter VII of the Charter of the United Nations because our country is classified, it does not guarantee stability and is the subject of risk to ensure international peace and security, a situation detrimental to the baseless In the ethics and realities of international law at present lacks the Code of Conduct in dealing with peace-loving nations and is aiming for, which comes in the forefront of Iraq.
So Iraq is a war zone and instability within the definitions and the terms of this chapter, as it still allows the international organization to use force against him unless it is converted to a Chapter VI to the lead role within the international community in maintaining international peace and security, a task which we believe are essential in the strategic national and working Iraqi diplomacy be given priority in the current scope of its strategy.
5- Kthirma mooted proposals to move the international reserves from outside Iraq in material and deposited in the Central Bank vaults, it is striking that there was no such international practice in this regard to the relevance of those reserves to the outside world directly represent the crane to deal with the world through the external sector. The transfer of several billion the size of a cash Question did not pledge any state looking for reassurance and to live peacefully in the international environment which is Atakll at the same time represent state Mkhatrkd prosecutions of this money even if the home is temporary and material being transported abroad for the purposes of settlement of payments and the payment of obligations.
With the offer to move the money out of cash in the country is the issue of exorbitant costs (when you move cash holdings) to be deposited in the international banking network through brokers and banks risk. Although they lead to the disintegration of the creditworthiness of the country, but it perpetuates the risk of the country
Of poor transparency and ambiguity, as well as poor usability in the face of external shocks to the balance of payments in the event they occur, the difficulty of moving such material reserves through international banks due to problems at home Aktnazha Kciolp difficult to dispose of them outside immediately.
Note that any cash, this figure will continue to be accountable before the international bodies involved in combating money laundering and money, crime and terrorism, which involves the cost of legal resources so when you move the liquid.
6- Allow investment in foreign reserves, central banks In the world to enjoy the first foreign government assets managed in investment portfolios with a high degree of liquidity and safety and at the same time provide meaningful returns commensurate with the size of those investments and diversity.
Thus the strategy adopted in the management of state reserves of foreign enjoyed priorities is to maintain safe, safety and reduce the risks arising from vibrations economic generated by the world economic maladjustment, while ensuring reasonable returns commensurate with the size of those reserves by diversifying careful investment portfolio, foreign national through the diversification of currency assets and higher government stability.
Seeks monetary policy within the general lines to provide the necessary liquidity of foreign exchange to make payments on Iraq's international and meet obligations and enable Sacip Iraqi dinar exchange rate to achieve a sustainable level of stability of the per capita income and living standards as well as to maximize the development and economic well-being and provide the appropriate environment for Demomthma.
There are two issues to be constantly Tdarkhma:
First: in a shift towards a market economy and building foundations of a strong and stable for a free economy and as stipulated by the Constitution, the monetary policy is not in a deal mirrored in the later stage, that see the big message about the consequences of the public expenditures in the first phase, and put things be reversed out of context, by dealing again in addressing the needs and bridge the budget deficit in the subsequent funding requirements of the country's reserves of retaining the stability and to avoid the discharge of public expenditure that causes the former to maximize the levels of domestic liquidity And generate strong demand inflationary threat to economic stability.
That this approach is the opposite to come back on foreign exchange resources to buy it after it has been the Iraqi Central Bank has been disbursed to offset Of local currency in the first stage through the expenditure budget will undoubtedly deducted from the market needs and its share of foreign currency and weaken the cover of the national currency, as well as being disruptive direct the policies of the Iraqi Central Bank to raise the purchasing power of the Iraqi dinar and promote its exchange rate against the dollar, which requires the availability of foreign currency resources constantly aimed at creating a strong Dinar and the development of a stable economic prosperity leads to continuous An important anchor in building economic security and national defense for the stability of Iraq's economy against external shocks for the longest possible period.
Therefore, the availability of any opportunity to cut the foreign currency directly from the Iraqi Central Bank's reserves to cover the expenses of direct government at the expense of the stability of the local market or restricting their needs, is the context that will not end But the exhaustion of foreign reserves of the Central Bank or to make it in a weak position to Aeetmashy with the needs and requirements of foreign reserves and its role in promoting Structure of macroeconomic stability desired . . policies which had previously exercised in Iraq to previous decades and the country is still reaping the results Alsalbpaly level of the political economy of stability and development.
Second: You must solve the problems of the country's financial relationship with the international community through dialogue, communication and mutual understanding and Amehal of the importance of normalizing relations with the international community and the Pacific regional diplomatic means, political and the protection of Iraqi funds in foreign and the search for radical solutions are the most successful in preventing movement of passive or isolation from the international community and avoid to return to the atmosphere of isolation from the world, which left Iraq since he started building their new nation.
Of the above, we see the need to take the monetary policy of the Central Bank of Iraq Correct tracks without direct funding from the growing tide of bank foreign reserves out of market operations and balances. Otherwise, The black market will strongly Amehal, and will help to confuse the Iraqi economy and return it to the eras of hyper-inflation and increasing rates of poverty and low standard of living and generate a state of the direct link of the value of the Iraqi dinar prices The disbursement of the market, which may withdraw sectors of the Iraqi economy as a whole and mechanical Alasarklha to the ranks of speculators and their decisions at the expense of generating a constant state of instability, which is usually caused by that market undisciplined to make economic policy in general and monetary policy, especially just a phenomenon attached to or be part of its actions and decisions, which is already dangerous for the Iraqi economy that fought its experience in previous decades Where he was the security of the country to the worst economic risks and reap the results of the Iraqi people to the dark wrong policies practiced for over three decades of isolation and hostility and confrontation with the outside world.
Conscious / unconscious Center for Studies and Research / Consultant CBI d. The appearance of Mohammed Saleh
First: International reserves and build the external balance of the economy
Result of foreign exchange reserves is primarily a movement of the balance of payments or the external sector of the economy of the country, and he was being an increase or decrease in the light of these persistent external movement. The exercise of this reserve and the central function and fundamental barrier is being a "major shock absorber, leading to the continued stability of the national currency at the foreign currency.
So Accumulation of foreign currency at the CBI, which represents its international reserves have been through the establishment of the Ministry of Finance swap of its revenue in dollars, which is caused mainly from Iraq's oil exports to meet their access to Metrgbh of the Iraqi dinar source of the CBI, to cover the costs of local public to enter Dinar trading local source in the Iraqi market, but through the doors of exchange in the general budget of the State.
Since the task of the Iraqi Central Bank is to maintain the stability of the Iraqi dinar, which has been issued and disposed of it mainly through the general budget expenditures mentioned, according to the mechanism referred to in the above, Such that it could select the orientation of monetary policy of the Central Bank of Iraq and recorded them in how to use the dollar available to reserve a foreigner, in order to meet the expenses of the public and market transactions implications, derived mainly from government spending shift at a later stage to purchasing power, however, the public, traded and spent Kdinar Iraq in the daily dealings.
By so doing, became foreign reserves of the CBI prompt to deal directly with the market pressures and needs of foreign currencies, but in the framework of preserving the Iraqi dinar and its purchasing power over the durable cover and solid foreign currency.
Such a trend in monetary policy is one of the subsequent work and fundamental to the implementation of the objectives of the CBI, especially after that phase is over, dealing directly with the fiscal policy in the first stage mentioned above (ie, the stage of the replacement needs of the general budget of the Iraqi dinar some of the assets of the government's foreign currency And start regardless of the dinar over the expenditure of public Almoisanp) to start the second phase of this time to address the market demand for foreign currency, resulting as we have final expenditures for the government and mainly within the basic components of aggregate demand.
Explaining this regard Mayati:
1- Pursuant to Article 27 of the Code of the Iraqi Central Bank No. 56 of 2004, which provided the central bank to take over management of official reserves of foreign currencies to the country according to international best practices and targets of monetary policy.
And approved the bank to invest such reserves a range of assets, provided that guarantee liquidity without the risk of remembrance and achieve something of the dividend (and maintain the concept of liquid reserves, as always).
According to the Central Bank has adopted international standards in the management of reserves, this was the work of the foreign reserve investments to ensure that spare those reserves all forms of investment risk and ensure liquidity and safety and to graduate from the concept of central bank reserves in any way.
Coming diversification in various currencies through the adoption of the concept of currency risk to avoid the volatility of exchange rates and the concept of credit risk to avoid failure of payment and the concept of risk of interest rates to avoid investing in any securities of the Institutions of credit rating is low unreliable at all and other risks and rates recognized by the international standards for central banks .
2- Often the question arises as to the effect, why Esttmr side of the central bank reserves papers or bonds Iraqi government to know the dollar.
The answer, without courtesy is No, for the following reasons:
A - The market for our financial and publications AA Initial stock is still unfortunately do not have an international credit rating puts its cards in circulation in the global market credit rating is required of not less than AA Or Maimathlh to ensure that no loss and the power of liquidity. mutual exclusive As ashamed of central banks so the pattern of exercises investment in reserve to be subject to so-called mutual Baltmana mutual exclusive . . And if so what has to buy securities it is through the secondary market to international investment, according to the criteria adopted at the Central Bank and not the initial version of the market provided traded on world markets in order to be truly part of the reserve.
B - country risk Our country is still subject to the so-called specific types of risk, called risk countries, country risk Mkhaatrizaam which had been caused by economic and political changes of any country. But come on top of that the subject of risk (decrease in foreign currency reserves). And that this factor is one of the most important factors to be considered to Iraq from outside the economic entity. And any fluctuation reserve, or a change in the composition or less, or devote controls to restrict foreign exchange and foreign exchange and confusion on this subject, is the Association a sensitive indicator of the risk countries and puts the country in the lowest credit rating in terms of its worth and treat the outside world financially with a healthy and normal.
Sovereign risk C - that the issue of risk is more than countries and on a large scale so the concept of sovereign risk Sovereign risk . . Stating in this regard that our country has ranked since 1982 (after the Iran-Iraq war) in the group of high risk, where Iraq is occupied score of 23% compared to a country such as Sweden, who finished score 100%, and the sequence Iraq between international groups by degree of risk has occupied the 111 sequences, the last in the International Classification of the Group of high-risk, compared to the sequence (1) Occupied by Sweden, for example.
On this basis, lending to foreign banks to international entities subject to the concept of risk countries it is hedging its own balances in the reserve account known as a dedicated account transfer risk reserve A factor giving rise to the external borrowing of the countries at risk when borrowing from foreign banks, the benefits and obligations of the high, ever see foreign banks that the calculation (ie, a dedicated account reserve transfer risk), although he was a watered-down about the losses from bad debts or bad loans foreign, but it is at the same time raises the degree of risk of lending to countries suffering from the subject countries, the risks cited above, which leads to unjust conditions in the charging of interest or reimbursement arrangements, and guarantees, and others.
3- Not subject the investment reserve of foreign currency in essence to the concept of financial investment or non-monetary, but subject always to the concept of management of the Reserve with a total investment of a cash almost like investment banks, Iraqi surplus cash and reserves in the accounts of deposits with the Central Bank of Iraq, so called foreign assets and invested some forms of foreign government bonds high rating, foreign reserves and not investments. remunerations And foreign reserves are classified by two types of reserves are either generating revenues remunerations Or free of royalties and are typically placed in current accounts with international banking institutions, particularly central banks in the industrialized world or the first and by more than 90% A departure from the incubator's investment in foreign reserves at this early stage in the management of custodial Khater will More complicated formulas in formulating the relationship between returns and risk management rests with the so-called sovereign wealth funds.
4- Our country, which, still country risk Subject to the dangers of countries under the so-called country risk As mentioned above is built on two levels:
Economic level: Königswinter foreign reserves at the Central Bank Ethirp to a country whose remission annual external to the private sector alone, about 26 billion dollars, a net importer of almost everything and a base of production in the weakest point in the history of Iraq's economic and that the source of a single commodity is oil They are subject to influence of external factors at the maximum point to represent today's energy markets and global demand as well as the general international economic situation.
Accordingly, hedge foreign exchange reserves of Kaloaniattiyat current minimum economic risks to the country's foreign which is still uncertain, and very worrying and requires intense anticipation.
As for The political level: Iraq is still subject to the terms of the regrettably so-called Chapter VII of the Charter of the United Nations because our country is classified, it does not guarantee stability and is the subject of risk to ensure international peace and security, a situation detrimental to the baseless In the ethics and realities of international law at present lacks the Code of Conduct in dealing with peace-loving nations and is aiming for, which comes in the forefront of Iraq.
So Iraq is a war zone and instability within the definitions and the terms of this chapter, as it still allows the international organization to use force against him unless it is converted to a Chapter VI to the lead role within the international community in maintaining international peace and security, a task which we believe are essential in the strategic national and working Iraqi diplomacy be given priority in the current scope of its strategy.
5- Kthirma mooted proposals to move the international reserves from outside Iraq in material and deposited in the Central Bank vaults, it is striking that there was no such international practice in this regard to the relevance of those reserves to the outside world directly represent the crane to deal with the world through the external sector. The transfer of several billion the size of a cash Question did not pledge any state looking for reassurance and to live peacefully in the international environment which is Atakll at the same time represent state Mkhatrkd prosecutions of this money even if the home is temporary and material being transported abroad for the purposes of settlement of payments and the payment of obligations.
With the offer to move the money out of cash in the country is the issue of exorbitant costs (when you move cash holdings) to be deposited in the international banking network through brokers and banks risk. Although they lead to the disintegration of the creditworthiness of the country, but it perpetuates the risk of the country
Of poor transparency and ambiguity, as well as poor usability in the face of external shocks to the balance of payments in the event they occur, the difficulty of moving such material reserves through international banks due to problems at home Aktnazha Kciolp difficult to dispose of them outside immediately.
Note that any cash, this figure will continue to be accountable before the international bodies involved in combating money laundering and money, crime and terrorism, which involves the cost of legal resources so when you move the liquid.
6- Allow investment in foreign reserves, central banks In the world to enjoy the first foreign government assets managed in investment portfolios with a high degree of liquidity and safety and at the same time provide meaningful returns commensurate with the size of those investments and diversity.
Thus the strategy adopted in the management of state reserves of foreign enjoyed priorities is to maintain safe, safety and reduce the risks arising from vibrations economic generated by the world economic maladjustment, while ensuring reasonable returns commensurate with the size of those reserves by diversifying careful investment portfolio, foreign national through the diversification of currency assets and higher government stability.
Seeks monetary policy within the general lines to provide the necessary liquidity of foreign exchange to make payments on Iraq's international and meet obligations and enable Sacip Iraqi dinar exchange rate to achieve a sustainable level of stability of the per capita income and living standards as well as to maximize the development and economic well-being and provide the appropriate environment for Demomthma.
There are two issues to be constantly Tdarkhma:
First: in a shift towards a market economy and building foundations of a strong and stable for a free economy and as stipulated by the Constitution, the monetary policy is not in a deal mirrored in the later stage, that see the big message about the consequences of the public expenditures in the first phase, and put things be reversed out of context, by dealing again in addressing the needs and bridge the budget deficit in the subsequent funding requirements of the country's reserves of retaining the stability and to avoid the discharge of public expenditure that causes the former to maximize the levels of domestic liquidity And generate strong demand inflationary threat to economic stability.
That this approach is the opposite to come back on foreign exchange resources to buy it after it has been the Iraqi Central Bank has been disbursed to offset Of local currency in the first stage through the expenditure budget will undoubtedly deducted from the market needs and its share of foreign currency and weaken the cover of the national currency, as well as being disruptive direct the policies of the Iraqi Central Bank to raise the purchasing power of the Iraqi dinar and promote its exchange rate against the dollar, which requires the availability of foreign currency resources constantly aimed at creating a strong Dinar and the development of a stable economic prosperity leads to continuous An important anchor in building economic security and national defense for the stability of Iraq's economy against external shocks for the longest possible period.
Therefore, the availability of any opportunity to cut the foreign currency directly from the Iraqi Central Bank's reserves to cover the expenses of direct government at the expense of the stability of the local market or restricting their needs, is the context that will not end But the exhaustion of foreign reserves of the Central Bank or to make it in a weak position to Aeetmashy with the needs and requirements of foreign reserves and its role in promoting Structure of macroeconomic stability desired . . policies which had previously exercised in Iraq to previous decades and the country is still reaping the results Alsalbpaly level of the political economy of stability and development.
Second: You must solve the problems of the country's financial relationship with the international community through dialogue, communication and mutual understanding and Amehal of the importance of normalizing relations with the international community and the Pacific regional diplomatic means, political and the protection of Iraqi funds in foreign and the search for radical solutions are the most successful in preventing movement of passive or isolation from the international community and avoid to return to the atmosphere of isolation from the world, which left Iraq since he started building their new nation.
Of the above, we see the need to take the monetary policy of the Central Bank of Iraq Correct tracks without direct funding from the growing tide of bank foreign reserves out of market operations and balances. Otherwise, The black market will strongly Amehal, and will help to confuse the Iraqi economy and return it to the eras of hyper-inflation and increasing rates of poverty and low standard of living and generate a state of the direct link of the value of the Iraqi dinar prices The disbursement of the market, which may withdraw sectors of the Iraqi economy as a whole and mechanical Alasarklha to the ranks of speculators and their decisions at the expense of generating a constant state of instability, which is usually caused by that market undisciplined to make economic policy in general and monetary policy, especially just a phenomenon attached to or be part of its actions and decisions, which is already dangerous for the Iraqi economy that fought its experience in previous decades Where he was the security of the country to the worst economic risks and reap the results of the Iraqi people to the dark wrong policies practiced for over three decades of isolation and hostility and confrontation with the outside world.