Iraq's reserves and protection
Author: Dr. Appearance of Mohammed Saleh
19/8/2018 12:00 am
The protection and stability of Iraq's foreign reserves and diversification and ensure its liquidity at the same time is one of the main objectives in managing the risk of central bank portfolios within the adequacy criteria Reserves.
The low yield and high liquidity of assets or assets that can be converted into cash immediately without loss as short-term treasury bonds and other sovereign financial instruments are preferred rather than investing in high-yielding assets with low liquidity and high risk to ensure the effectiveness of monetary policy in addressing the liquidity risk of the economy.
And provide the stability of the national currency against volatile balance of payments and sudden external shocks.
One of the reasons for the Southeast Asian crisis of the 1990s was that Asian central banks were investing in US-style financial options and hard-to-liquid derivatives in futures markets, making foreign currency liquidity more difficult to meet the risk of current account volatility for their balance of payments That.
While its governor showed the availability of efficient and liquid assets (in terms of formality only). In fact, the assets of its portfolios were weak due to high risks in the pursuit of return and great risks in its liquidity.
Therefore, the IMF adopted a sound and safe investment evidence method to guide its central banks in Manage its reserves of foreign currency easily and efficiently and avoid high liquidity risks.
Thus, part of the reserves of the Iraqi Central Bank and part of the tributaries of the general budget of oil revenues are invested safely under the revised investment guide and agreed on its principles with the International Monetary Fund more than twelve years ago within the policy of diversification of the portfolio to obtain appropriate returns, With the highest AAA credit rating.
As far as Iraq's financial history is concerned since 2003, it should be noted that Security Council Resolution 1483 of May 2003 obliged Iraq to open an OPRA deposit account at the US Federal Reserve or Federal Reserve in New York, a central mechanism for deducting compensation for the Kuwait war,
Even today, as it is still practiced against Iraq, unfortunately, the measures of Chapter VII of the Charter of the United Nations, even if shy or non-apparent until the extinguishing compensation Kuwait's full war, which left only less than 4.5 billion Dollars.
I find myself in this arbitrary and unmatched against the interests of the Iraqi people wounded, either the reserves of the Central Bank of Iraq deposited or invested in the Federal Bank and the subject of protection from the procedures of judicial arrest or freezing.,
It is useful to mention but not limited to one of the facts Judicial:
As the Federal Court in New York State has rejected a lawsuit for judicial custody of funds belonging to the Central Bank of Argentina years ago because the money is non-commercial and lead the function of stability and owned by a central bank refers to the law Independence.
The same case is supposed to apply in applying its legal standards to the funds of the Central Bank of Iraq as long as the country's money is deposited in a banking institution that also performs the function of the central bank and carries the same stability objectives.
However, we must avoid the political risks with the host country For money.
The risk of collisions in the United States (from my personal point of view) bears a harsh and bitter historical experience in Iraq's financial history.
Former US President Bush and then President Oboma until 2013 were precisely giving the CBI accounts (including Iraqi government deposits implicitly in his name) and for a decade Immunity is an annual executive order issued on the basis of emergency laws The United States.
However, everything may be necessary to avoid legal risks under the application of alternative ego and expose the reserves of the Central Bank to the risk of freezing acting on behalf of the Republic, God forbid.
In the 1990s, Iraq was subjected to such harmful legal practices adopted by the courts in the Jurisdiction areas of Europe and elsewhere.
It was very damaging to the Iraqi people.
Therefore, I find wisdom and reason to avoid conflict or engage in the risk of colliding with the interests of the United States.
And able to do something harmful and then it is easy to put the problems on the shoulders of the Iraqi people and the poor masses, the wounds of the siege of the nineties have not yet healed and accompanied by four consecutive decades of economic and social development Lost.