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Dialogue with the Deputy Governor of the Central Bank of the appearance of Mohammed Saleh

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Dialogue with the Deputy Governor of the Central Bank of the appearance of Mohammed Saleh

Date: Mon 05/03/2012 1:10

High exchange rate of the dollar in the Iraqi market, ask big questions about the reasons for the rush to the green currency at this stage. «Weekly» I interviewed the deputy governor of the Central Bank of the appearance of Mohammed Saleh on the bubble price, which witnessed the dollar, and the extent of the implications of the sanctions imposed on Syria and Iran to price fluctuations.

■ What's your interpretation of what the market is witnessing the Iraqi conflict in exchange rates of the dollar?
- What is going on currently in the exchange rate of foreign currency in the Iraqi market is the result of inherent chain of events, most notably what is going on in the countries of the region and overlap of trade between Iraq and neighboring countries, and single out what are his two neighbors has two of the boycott of an economic and monetary, financial, and note that the consequences of this events cast a shadow over Iraq's relations with regional and in the most sensitive areas of any global financial sector and financial sector as well as the Iraqi-funded foreign trade.

Also, commercial freedom in Iraq and the open-door policy and a link to this free foreign exchange and the relative stability of Iraq in the economic field compared to what is happening in neighboring countries, are all factors driving, to reconsider the financing of foreign trade map. On this basis, was a window of the Iraqi Central actress the increased sale of foreign currency and buy dollars to the state of unprecedented, as it was bought dollar level exceeds the needs of the national market to finance foreign trade in dollars and sales rose in the window of daily dollar at the auction in the Iraqi Central from $ 160 million to the number large exceeds the $ 350 million, and some days more than the figures $ 450 million. This phenomenon began about the Department of Economic Analysis in the central Iraqi follow-up field developments and analyze their results.

■ What are the main findings of the CBI from the results?
- Can point out that the CBI had reached important points to help us explore the necessary solutions. This phenomenon is most important that aside from the rush, and the mean increase in demand for the dollar in daily auction, due to internal factors, it was observed that the expansion of sales window (auction) is linked directly proportional assignments federal budget, which declares in his budget, and in a manner consistent with the request of the local market foreign currency. The intrinsic factor is related to the other to pull the U.S. out of Iraq and concerns of the post-withdrawal, and this was reflected in the political pressure that we see, what stimulated the demand for foreign currency, for reasons and motives are different.

■ What about the external causes, as you refer more than one occasion, in your statements?
- Yes ... Another reason the transformation of trade that has hit the movement of intra-regional trade, which is where the Iraqi trader a dealer a central and a third party to finance trade with Syria and Iran, both through the Persian Gulf, or with other regions, what kind of pressure and a request is unusual to finance this trade, reflected on the window of an auction sale of the dollar in CBI. Based on the foregoing, and since the open-market operations through the sale of the dollar in the Iraqi market, which is an important aspect of monetary policy to control the levels of liquidity, and to cover excess demand for goods and services, to maintain the stability of the dinar exchange rate, has meant two things: first, the financing Trade Iraqi private sector to buy goods and services and the benefits of foreign, and what you see today of goods filled by the Iraqi market is funded through that window. The second is that there is freedom in foreign exchange so that the current account balance of payments the Iraqi point of import and export of goods and commercial services (visible and invisible), the complete freedom without restrictions, except for taking into account the law of money laundering and money, crime and terrorism, taking into account the application of regulations and oversight of relevant. In addition to this, that this freedom in the transfer allocated for commercial and economic activity outside of Iraq by the parties (natural and moral) exclusively, and does not allocate any foreign entity, stressing that the Iraqi dinar source of trading covered with reserves of foreign currency increased by covering more than 100 percent, what make the Iraqi dinar is like hard currency. Accordingly, the foreign currency reserves in the Iraqi Central reached the highest level in the history of Iraq, including more than $ 60 billion, which means that the dinar dinars strong and able to overcome any external influences on the volatility of oil prices due to strong reserves.

■ What is the position of the international financial community on what is happening in the Iraqi market volatility is almost constant in foreign currency exchange rate?
- The international financial community factors reduces the «risk countries» when the signal on Iraq for the purposes of external financing and borrowing from abroad when necessary, by looking at the reserves allocated to ensure strong economic stability. Regardless of this and that, and since the window in question had been allocated to the sales of private economic activity, it was necessary to re-define customers as part of a routine is between now and then to scrutinize the acts of money laundering. The customer window are the banks approved and customers of banks are Iraqi citizens exclusively, as it coincided recent events with the application instructions regulatory require customers of banks to apply for purchase of foreign currency through a certified check payable to the company money transfer is ratified by the bank customer called for foreign currency, as the move forms the basis for tariff customers of banks through the base information and the requirements of opening a current account, the customer places the student of foreign currency at a high level of transparency and responsibility commensurate with the applications of the fight against money laundering.

■ Are there any cases of violation of the instructions of the Iraqi Central detected at this stage?
- Yes ... We noted that most of the cases, including customers who were not prepared for such advanced banking procedures in place at the banks that are keen on good performance and transparent in its activities. It is very unfortunate to find a compromise commercially Iraqi deal in millions of dollars and does not have a bank account, what is surprising in terms of deterioration of the assets of the basics of trade and approached the kind of trade that was practiced with the nomads and herders. You may find some people have a current account, but he hesitated to push through it, for fear of the fear of something deposited in his memory devoted over decades ago, but that does not justify the entry of arms of the gray market or black market official central, we mean the market of foreign currency in the «Iraqi Central» . In another comparison, we find that on the instructions in the application of 1/2/2012 Sales fell from an average of $ 200 million to $ 6 million, but returned after it has adapted to the market with the new measures. I expect to increase sales gradually according to the new instructions and a base to say that is being applied, as I notice a slight increase in the dollar exchange rate with local vendors, but no more than a bubble forming to exploit the situation by some, accompanied by a wave of rumors and media campaign economic was intended to confuse the situation Economic and attempts to introduce counterfeit currency from the dollar and others, but the CBI had not been recorded in the deposits of its customers any flow of currency counterfeit, taking into account the importance of tighter control and scrutiny, a task involved in ensuring the implementation of services the whole country, in the forefront of customs and national security, considering that the crime of counterfeiting currency and its promotion is one of the economic crimes, and the executive authorities respond to strongly protect national economic security.
The dollar recently rose to the level of increased concerns with the local market and observers of the economy, who warned of the repercussions on the prices of goods and services and high rates of inflation.

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