BAGHDAD / Obelisk: AMF confirmed the importance of monetary policy in the areas of the college governing the relationship between the money supply and economic activity, in order to «achieve price stability and create a suitable environment for the exercise of various economic activities, leading to drive economic growth economic policy».
The Director General of the Fund Abdulrahman bin Abdullah Al Hamidi at the opening session of the «application of monetary policy», which began yesterday at the IMF headquarters in Abu Dhabi in cooperation with the German central bank, the monetary authorities «controls monetary policy by tools directly and indirectly, such as interest rate or total volume Credit directed to specific sectors, and take different forms, including framing credit, which is regulatory action, which sets monetary authorities ceilings of the evolution of loans granted by commercial banks ».
He explained that «indirect means to achieve a balance between supply and demand for money, such as the use of the change in the legal reserve rates to influence the volume of credit granted by commercial banks, or to change the rediscount to influence the money supply rates, which lead to the response of interest rates in the financial markets ».
In addition, «influence in borrowing from commercial banks or resort to open market operations, which sells through which the central bank buys securities or, the desire to inject liquidity or absorbed».
He said Hamidi that «frames monetary policy first depends on the evolution of the financial structure of the state and the economic situation», pointing out that the monetary authorities «adjust the money supply or monetary expansion to accommodate the need for economic operators through the means mentioned, so that reduces the money supply in order to reduce inflation or expands to encourage investment, thereby increasing economic growth.
He believed that monetary policy «aimed to cash cover insurance with high demand sectors of the economy for credit in the event of economic boom or mitigate the negative effects of economic fluctuations, pursuing a wide credit policy in times of deflation and restrictive in the case of the boom, and thus address the high rates of inflation».
In light of the lack of efficacy of traditional instruments of monetary policy in stimulating the economy, he pointed out that many States «pursued an expansionary economic policy during the global financial crisis by using the so-called policy of quantitative easing, through the purchase of assets from banks to provide liquidity to have, enabling them to lend assistance in facilitating conditions Finance and promote economic growth and reduce the unemployment rate. »
The session will focus which 34 people from 17 Arab countries are participating in the three-day, on the axes of the most important monetary policy transmission using direct and indirect means channels, and practical cases in the implementation of monetary policy, the Central Bank's role in the delivery of the objectives of monetary policy to the public.
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