29/03/2015 (21:01 pm) - The number of readings: 821 - Issue (3324)
Interviewed by Ghazanfar Laibi
Iraq will be placed under the "black list" unless acknowledges Money Laundering Act
the existence of Article 50 in the budget may expose Iraq's assets abroad into custody
We made an appeal on the materials that affect the independence of the Bank's work
The first part
Governor of the Central Bank on the Keywords warned that Article 50 in the budget law has been Iraq's assets and reserves abroad to risk booking, and while pointing out that capping sell the currency means that the government robbed the bank tool exercised through which monetary policy, confirmed that the bulk of money laundering operations in Iraq due to tax evasion.
And below the full text of the first part of the interview conducted by the "long", with the relationship ..
Observers believe that the auction is not the currency of the central bank's responsibilities and cause many problems for the bank, you will continue to auctions, and are there alternative options on the table in front of the bank to be delivered to the government or switch mechanisms work?
- "The central bank is responsible for the coverage of imports and the necessary requirements and other foreign currency, and here we are talking about the dollar, and through this process as well, and by determining the exchange rate, the central bank to achieve a goal of his goals and is price stability, because the oscillations that occur in its exchange rate implications for inflation, employment and other things states that have foreign currency source mainly a specific one source, as is happening in Iraq, where the source of the dollar for Iraq is oil sales and received by Iraq against these sales of the dollar, the Ministry of Finance in the process of selling it to the Central Bank against the dinar Iraqi,
and we can say that the central bank has a ratio greatest and biggest of the dollar, so the central bank to the process of selling the dollar in the market, in order to take the interview of the dinar, which buys it from the Ministry of Finance dollar, nor inevitable and unavoidable that the central bank to provide foreign and sell currency In the market,
there are countries that have a variety of sources for the dollar and the market is limited by the supply quantities and demand and the central bank does not have to engage in selling or buying, but if you find there are significant changes in the price of the currency so it may the process of buying or selling in order to create a kind of balance".
after the oil crisis and low prices, we learned that the choices faced by the Central Bank determines the sales ceiling (which is what has been going to him by the parliament and the government, through Article 50 in the budget, which set sales by $75 million a day) and the abandonment of cheap and thinking Dollar float to raise its price in front of the dinar gradually,
the question, do you see the Central Bank had been compromised by Article 50 the independence of the Central Bank? Do this daily sales in the ceiling, or is it overtaken? Is it a correct decision in your opinion?
- "The determination of the central bank sales of the dollar was surprising for the central bank and the government, that placed more than material concerning the substance of the work of the central bank and its functions and this affects reportedly Constitution of the independence of the Bank and touches the central bank, which did not allow the intervention of any party law or any other party the activities of the bank and its decisions,
so we agree with the government on the appeal of this material, and there is a risk not pay attention to him when you put this article in the law, because the presence of such material in the General Budget Law for 2015 shows assets of Iraq and reserves abroad to risk booking because Iraq was able to to defend its assets abroad by emphasizing the independence of the Central Bank even prevents any type of booking or any legal action last,
and when the materials are placed in the budget related to the Central Bank Act, the budget is a government bill was approved by the Parliament therefore read externally that the government has become intervene in the work of the central bank or that he associated one way or another, or subject to its effects, and this may be an excuse to creditors or other exposure to our assets abroad parties, so we have agreed with the government to appeal to those substances, were presented to appeal a fundamentalist to the Federal Court."
Is there an intention to go to the bank to raise the price of the dollar, rather than determine the quantity?
"Can not the Central Bank identifies the quantities contained in the budget law, and can not work developed specific to sell the currency ceiling because the subject touches the essence of monetary policy, which constantly changing, and may change daily,
in the light of the existing variable was forced to sell larger quantities at a time certain or less quantities in the last time, and by currency movement, exchange rates and, according to the country's need, for example, when the government asks for decades or equipment specific amounts which obligations exist in the budget law, the central bank, can not be determined such requests to the presence of a certain ceiling, as this would affect the obligations Streptococcus central bank,
so when specifies roof to sell the currency, it means that you robbed the bank a tool of the most important his tools, which can be exercised through which monetary policy, exchange rates and currency, and on the other hand, recognize the reality of placing the material within the budget law, and intended not to alienate reserve foreign currency and attempt to control it a way that preserves the desired level of these reserves,
understand this trend and are working on it, but without prejudice to the policy of a fixed roof and the nature of the work of the central bank mode, and also prejudice the issue of supply and demand of foreign currency."
hl there is coordination between the central bank with the government and parliament? How is this coordination? What are the mechanisms of action? It is said that personal attributes and relationships party could play an important role in that?
"The independence of the central bank so far respected by everyone, and the only case that I got and we are going to address them, are crammed central bank in the budget law, which reflects the fiscal policy issue, not interject its monetary policy, which is a variable policy, not fixed, and either the subject of independence,
There is an important and fundamental point, because independence is not a slogan, or just a recipe given to this side or that, the real translation of the independence of any institution is the law, and to what extent the law that the administrative independence, financial or technical, so it may be a mistake to rule on the issue of independence or evaluated by classifying institutions independent of it or not independent,
and we must go further than that, and we see the law of that party, what gives them the translation of this independence, perhaps an independent body in the title be, but law Akplha many restrictions and subjects them to the regulations and instructions and other".
There is a law on the Central Bank, is being applied correctly? The immunity granted to employees?
- "The Iraqi Central Bank Law of distinct laws compared to central banks in the world, broad and much enjoyed by the independence and immunity and non-interference in its affairs and the independence of its decisions, and is the central bank law, ahead of many of the world's central banks that do not have so much autonomy and the other part is to respect this independence by the executive authorities or legislative, and so far we have not seen significant violations or encroachment on the authority and independence of the Central Bank, and any dispute in this regard resolved through the Federal Court if there was a difference in interpretation, and did not face violations or interventions".
Is the central bank faced political interference in the previous government period?
There was no interference in central bank decisions, because the decisions are protected by law, and can not interfere with one hand in decision-making,
and in the event of an intervention by the central Van could defend and does not respond to these interventions, because the central bank law gives him such a force, and got maybe in previous periods differences in views in the way of the Central Bank or the issue of currency auction or other things that the government in coordination with the Central want a high degree, which is located under the law,
and there were a desire that the bank takes the economic and developmental role, as happened in the previous period, while confined Bank and effort and activity concentration in the process of currency sale through auction, which consumed a great effort and enter the relationship between the central bank and the banking sector the framework for complex problems and differences and others, we are now not forgive the process of selling the currency, but others sell mechanisms to another way to be more control over these operations and more transparent and more distant from the problems that were taking place between the central bank and the banks."
Have you identified a group of banks to sell the currency and what is the mechanism?
Each Registered Bank and metaphor and all conversion company can buy the currency in addition to the banking companies that buy through banks, taking place under the supervision and approval of the governor by providing daily disclosure requests and agree with it with full transparency."
It is well known that one of the central bank departments responsible for money laundering, what the nature of the work of this department? Is able to get their hands on money laundering cases? What number? What is the size of money?
"Laundering activities money to gain international attention, and not at the local level to carry the risk of it be a cover to pass criminal operations and corruption and even terrorism and other operations,
so the increased interest in this aspect because of the dangers that threaten the world extensively crime because of terrorism, Iraq has entered the years to before Financial Action Task Force organization dealing with this subject,
and the Central Bank of the functions of the reduction of these phenomena, and the Central Bank Law and the Law on Money Laundering, Bank is obliged to give strength and power and autonomy special unit responsible for this work,
the office reported money laundering, and was a management point of view Previous see that the money laundering case is not the core of the work and the attention of the central bank, so I did not give this issue enough attention, and this was the subject of criticism of international organizations, and we have had previous conversations with the Central Bank of The administration believes that this work is possible to play on the other hand,
we were We emphasize that the central bank law and the law of money laundering, put this task on the central responsibility, and the law has not changed, can not be the central bank is trying to say this task, so I did not witness this activity or this configuration attention or focus during the last period,
we started since that cost us this task by giving this issue a priority and great importance, and we have to strengthen the composition of the administrative, financial and technical potential, and its curve autonomy within the Central Bank has a special budget and an angel and independent place, so that independence which emphasizes the international agreements are available to him,
and many of the observations are installed on Iraq is currently the subject of money laundering depends on the existence of the law covers all things related to these aspects,
since we took the job we have given considerable attention to the completion of a draft law suit and in conformity with international standards and requirements and the Organization of Financial Action Task Force, and accomplished this project and has been reviewed by international organizations and is now in the Council of State and will end soon and referred to the Council Ministers and the House of Representatives, and is Iraq within rating organization in the gray area, and if they do not accomplish this law,
if approved did not appear within the next three months, Iraq has been placed on the black list, so we have a very large keen on the completion of this project, which will end soon Council State Shura, and we met with Mr. Speaker of the House and Pena him the importance of the bill and promised to do better."
kev are the most prominent of money laundering operations in Iraq?
Longer term or activity of money laundering recently in Iraq by virtue of circumstances and changes that have occurred in the country, and there is a description of the process of money laundering numerous and extensive activities,
and through our work and through the banking sector correlation Central Bank in terms of supervision, we found that the bulk of the money laundering operations resulting from tax evasion, eg import materials, foreign trade and be large sizes and billions per year,
but we see the tax receipts are not commensurate with the size of these imports at all, and the materials required to be covered by the Central Bank of the dollar, and in the real permits customs that are as yet see that the percentage of materials recorded is worth only a very small percentage of unauthorized advance when you buy the dollar, and this type of tax evasion."
Governor of the Central Bank on the Keywords in dialogue with the (long)
03/30/2015 (21:01 pm) - The number of readings: 168 - Issue (3325)
Interviewed by Ghazanfar Laibi
_khassna 5 trillion dinars for mortgages and housing, industrial and agricultural
project to delete the zeros is still there and the need to "stabilize the Year" for its implementation
allowed banks to use half of its reserves to buy bonds
The Governor of the Central Bank of the relationship, the project to delete the zeros still exists a need to "stabilize" the implementation and follow carefully, and as he emphasized that the central coordinate with local banks for economic development and financing of small and medium-sized enterprises,
said in the second part of the expanded dialogue interview with "Range": that the government decision which committed banks fulfillment rate of tax when you sell the dollar guarantees for the government obtaining part of the customs duties.
And below the full text of the second part of the interview conducted by the "long", with the relationship ..
fa step to meet the tax, has been addressing tax evasion through obtaining the custom fees by banks which objected to the decision .. What is the opinion of the Central Bank of such a decision?
- "Possible for this decision to replace part problem obtaining the tax, and it solves part of the problem,
and what happened in the last period of obtaining the tax through banks when buying the dollar, is the decision not from the central bank, because it is not our relationship tax,
a government decree issued for the prime minister and the finance ministry, and because of the circumstances through which Iraq currently, and the presence of the problems at border crossing points, and because of the large amount of corruption institutions related to this subject, and found that the best way to be obtaining insurance customs duties, identified by 5% when buying the dollar,
This is at the very least guarantee of the government portion of the proceeds from customs duties without leaving the rings, units, and institutions are not able to control this process, and the rate of 5% is not all the tax,
but at the very least it is a part and presumably after the introduction of the goods being the actual tax is calculated, certain material may be a toll of 20% or 30% or 3% is being conducted settlement between the General Administration of Customs and customer between or merchant in the light of the real quantity,
so this decision a government guarantee as certain of the proceeds of customs duties, it is true that the decision dollar displays to rise as it gets Now, one of the reasons for this increase is that the banks, while the dollar sells, it sells at a price that was purchased by the central bank, which has not changed, and she has these fees, so this rise is real, but it is a load dollar fees that push the bank."
know that the country is living a financial crisis because of lower oil prices on the one hand, and because of the battles against the "Daash" On the other hand, the question, what the role of the central bank to support the economy and the development process?
"The financial crisis through which Iraq has opened the door to the study of the economic and financial situation in the country, in some cases, financial abundance are cover failures, and we believe that the favorable opportunity, and then revealed that the current crisis country's real economic capabilities kick that can provide stable resources and permanently unavailable,
so it is an opportunity, as the central bank calls for the need to develop Iraqi economic model outlining the economy and resources, financial and monetary policies and other so he can Istqad of this crisis,
as the lessons of this crisis must and employ the right way, and to reconsider the economic structure and policies Finance in what country is exposed to shocks and risks due to the fluctuation of the only source of imports of Iraq, which is oil,
and the central bank arms folded not stand towards the current crisis, but entered the depth of this crisis with the government in an attempt to overcome first, and to contribute in building the correct directions for the future,
and on the first level The central bank as permitted by law, we have demonstrated willingness to buy bonds the government issued and we buy from the secondary market, and we do this now,
and the second point and do not even get a contraction affects economic activity because of the weakness of resources and thereby increase the unemployment rate,
the central bank has decided the equivalent of 5 trillion dinars to the specialized banks (real estate, industrial, agricultural, housing) and I think that this is an important step and spoke for the first time to enter the central bank in the financing of these banks process in order to move the economic situation,
as well as allowed the central bank to banks, which has a reserve with the central bank and by law must to put 15% of their capital in reserve at the central bank, allowed banks to use half of this reserve to buy bonds so that these banks benefit from the return on these bonds at the same time we can shortfall coverage at the present time,
and all now realize the need to stimulate the private sector and take its role broad economic currency and we can say that the Central Bank is the pioneer now in support of the private sector, which has to do with banking and financial sector,
and we have a broad plan may not help the field to mention the details, and we adopt at the present time the advancement of the private banking sector by giving the confidence of the private banking sector,
The public's trust is the basic rule is based, so the first thing we have done is to try to promote this confidence in the banking sector through the proposals they have made to the Council of Ministers and the Economic Commission to accept government deposits at private banks, because as it has been to prevent government institutions from the deposit in private banks I do not expect the public to deposit deposits in those banks."
ma reason for a lack of public confidence in banks?
"Occurred in previous periods situations such as the failure of the bank or the bankruptcy of another, and were then radical decisions not to deal with private banks,
we try to give confidence in banks, and even the bank that was the cause of the crisis, we are trying to revive it again,
the central bank has plenty of flexibility and tools which can which corrected the situation of banks which are exposed to the problems, because the collapse of any bank affect the banking sector as a whole,
so the government agreed to accept deposits and accept issued by banks and instruments, as well as accept letters of credit, which opens to the government from private banks, which are very important issues,
the central bank is considering in the current period to provide liquidity to banks which are exposed to a state of distress at the present time according to the central bank law,
as well as coordinating now with the banks in an attempt to her husband in the process of economic development and financing of small and medium enterprises is an important and a great program and it was the reason for the growth and economic activity who got in a lot of countries,
and there are regulatory and legislative reforms and we have five to six new laws with respect to guarantee deposits in respect of Islamic Sukuk and Islamic banks and the law of the new banks and the law of the new Central Bank, all of these bills are very important in order to avoid the problems that were previously holds."
adm saving citizens money in banks, you come from a lack of confidence in banks or she societal culture?
"We have a serious phenomenon in Iraq, at a time when the country needs him to the resources to create economic activity and the need for liquidity,
we note that the bulk of this liquidity is outside the banking system system, but today we have between 30 to 40 trillion outside the banking sector, which is stored in the public,
so the central bank to give confidence in banks and providing the movement and activity of her so that we can attract these 30 or 40 trillion held by the citizen and incorporated in the development process and economic activity, and that part of the subject back to the public culture and the other part is due to give confidence in banks,
As we have already said that the first step by the central bank is to create confidence among the public banks through bridging the relationship between banks and the government to the public trust this, and also through the bill, which we are working on a deposit insurance law, which is a very important law, because the citizen when he feels the existence of law that protects and Diath in the bank be a reason to deposit their money in banks."
_aad Iraqi banking system late compared to the banking systems in most countries of the world and even the nearest neighboring countries, and may be bureaucratic red tape or a reason for the reluctance of citizens to deal with these banks, Is there any intention to develop the mechanisms of Iraqi banks in the near term?
"This note is very important, especially since the banking system in all countries of the world is the most sector progress in regulatory, administrative, financial and technical operations, which is the first advanced in all the institutions, because it is an important sector, and the efficiency, speed, accuracy and the whole transparency important things,
so we see the financial and banking institutions are particularly sophisticated in their work always,
we have a very big problem lies in the acquisition of 80% by the government banks, meaning that the government's banking sector accounts for 80% of the banking sector, market, and not a problem by acquisition,
but this sector is underdeveloped, means you have 80% of the banking sector has lagged work, organization and use of modern technologies and others, so it is necessary to reconsider the structuring of the Rafidain and Rasheed because they are the bulk of the Iraqi banking sector,
in order to achieve the reorganization of these two banks, and to reconsider the ownership of these two banks, and in favor of that these banks are joint stock companies and open the way for the banks and the public to access these banks through certain stocks, the central bank adopted in the current period, a lot of modern systems in banks manage to regulate banking operations and coordination is underway with these banks to implement these programs and will tighten the coming period, a reflection of this matter."
ugod foreign banks in Iraq is very limited .. Is there any intention to enter the international banks to work in Iraq? Is this a small number of global central banks meet the ambitious Iraqi?
"The central bank encourages the entry of foreign banks to operate in Iraq, and there are a number of branches of foreign banks operating in Iraq,
but the overall situation in the country delay the entry of foreign banks into Iraq, and there are branches of Arab and foreign banks but they are still cautious and limited in scope in its work and has plans to expand its work in the future coupled with the conditions existing in the country."
kther talk about the project to delete the zeros, which is long overdue, and we hear occasionally conflicting statements on this matter .. Where arrived Central Bank in this project?
"Multi deletion of zeros taking many dimensions to the debate and controversy, and there are two points of view on this subject, and that the points of view two different deletion or maintain agree on the principle that this deletion or maintain does not change the reality of the currency or the value or effect in the economic reality of financial or cash because are just like you put a sticker on the currency in or on the zeros,
party pro-deletion of zeros sees the need to delete the zeros, because the zeros when they are in large numbers, usually in countries where very large inflation happens and, as happened in Iraq earlier,
while disappear inflation is natural phenomenon and back to normal, as is happening now in Iraq that the inflation rate is very slim and low, when it should delete the zeros to facilitate the calculations and give the kind of confidence the currency,
because the zeros linked to the weakness of the previous currency, and there is the case in the sense or the subconscious mind that these zeros express the abnormal condition and inflation, so that the removal gives the kind of reassurance to the return of the currency to normal reality and the real power, and facilitates calculations and registration,,
while the opposite view that hinder delete currently zeros, you see that this process since it does not create an impact on the ground the existing economic, say you do not need to replace the currency in which the cost management and organizational, as well as that there is a kind of fears that the effects of inflationary occur any currency less psychologically and not structurally structural value,
it is scientifically can not occur something, there is a kind of fear, and we as a central bank to give to ourselves the opportunity and space for feminization in this topic because it is not a major priority for the central bank,
and we believe that the general conditions of her relationship in taking such a step, and making sure the process of withdrawal and replacement of more than 40 trillion dinars, even if they are within range We put time and in circumstances that may not be stable, could create a lot of shenanigans,
We need to general stability which we can do through this process smoothly, but we put this subject on the track to move it carefully."
ma reason for the lack of a coin?
"Reconsider the issue of the coin is associated with the subject of the deletion of zeros, which is needed to study, and so far we study this matter, because the central bank tried earlier in the infectious currency that have not been accepted, and was retrieved by the central bank and bear the losses."
For more than a year, Iraqi banks have stopped granting loans to citizens because of the failure to approve the budget in 2014, and in the shadow of the current period of financial crisis, the central bank steps in this aspect?
"Personal loans determined by the banks (Rafidain and Rasheed), a policy relating to banks through the availability of liquidity, according to the priorities that are working on, but we have dedicated industrial, agricultural, real estate and housing loans of $5 trillion to banks and will open the door wide for the specialized banks, which are loans which will benefit the people.".