Economics: Cash reserve Borrowing, and the negative

[Stillw8n]

Economics: Cash reserve Borrowing, and the negative
Sat 10/08/2011 7:51

Abbas Ghalibi
The foreign exchange reserves were real supportive and sober for the local currency, where all countries are trying to raise this reserve to cover and be conservative on the currency of the decay in the abyss of the collapse of the exchange rate off the foreign currency.

And sought the Iraqi Central Bank strives to raise the level of foreign exchange reserves during the past seven years closer to the road from the banks of the 70 billion dollars.

Deposited in many banks in the world sober, at the time maintained the central bank through its monetary policy hard-line on the Iraqi dinar exchange rate trend of foreign currencies, using tools other cash properly somehow led to the decline is striking in the levels of inflation, where you talk to government figures of the Ministry of Planning decrease of 35% in 2004 to less than 3% during the year 2010, indicates the safety and direction of monetary policy to curb inflation and then make it move in the spaces of transition economy aspiring to the adoption of market mechanisms.

This as well as daily public auction for the sale of foreign currency, which was a source to provide optimal cover for the provision of adequate funds for foreign trade and the process of trade, particularly for the private sector which was more moving within the area of ​​his handling of the dollar.

All of these policies, mechanisms and procedures that have emerged from, the Central Bank keen to raise the volume of cash reserves in proportion to the force required for the local currency, which saw the stages and Ford’s retreat, the breaking point because of the economic policies of blundering and indiscriminate past and that made a big difference between the Iraqi economy is collapsing and global economies other competitor countries, particularly Iraq’s production and export of oil.

The central bank fights on in place reserves on two fronts: First, is trying hard to raise the volume of foreign exchange reserves, and the other in pursuit of the government to borrow from the reserve under the rationale for dealing with the deficit made in the annual budgets or finance strategic projects as projects of electricity, where the segment of those who call themselves Balaguetsadaan calling on the public to borrow from the cash reserve and accuse the Central Bank of exaggerating the risk expressed by if they were borrowing from the cash reserve, but the insistence of the Central and persistence on his position is based according to the opinion of many observers inside and outside Iraq, and even the opinion of other international organizations such as the IMF and World Bank in terms of economic policy, the right to maintain the stability of the currency and Rsantha and rival to the value of other currencies, as we see that the position of the CBI stems from the ability to extrapolate things and follow the procedures and ways to deal with fluctuations that may occur in the economic landscape, accounting for currency and the monetary policy, one of the most important pillars of stability financial and monetary stability and then economic.

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