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Central Bank of Iraq blames ‘unauthorized statements’ for financial instability
25 May 2013
Central Bank of Iraq has recently claimed that the volatility of the Iraqi currency is refraining both national as well as international investors from the country. The statement comes following a volatile period that has seen the dinar weakening vis-à-vis the U.S. dollar despite Central Bank’s measures to halt the decline.
Local media sources have revealed that the statement from the bank has been faxed to the newspaper media, acknowledging that the investors have faced terrific losses due to the volatility of the currencies.
The bank stated, “Unauthorized statements made in the past short period on the function of the (Central) Bank which have resulted in losses for traders and entrepreneurs.” The bank stated that from economic point of view, there is no justification for such statements. Rumors are making strong stand, revealing that the bank would either halt of reduce the amount of hard cash it auctions on a daily basis were to blame.
Through the daily auctions, bank approximately sells up to $200 million dollar to other banks and the public were seen as a stabilizing factor.
However, in spite of arranging auctions, the price of dinar is falling downward, which is a big concern for the economy of the country. In the past few days it has been trading on the spot at more than 1300 to one U.S. dollar while the official price is about 1100.
But the dinar’s lower value on the streets of Baghdad in comparison to the official prices has been a source of manipulation and corruption.
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25 May 2013
Central Bank of Iraq has recently claimed that the volatility of the Iraqi currency is refraining both national as well as international investors from the country. The statement comes following a volatile period that has seen the dinar weakening vis-à-vis the U.S. dollar despite Central Bank’s measures to halt the decline.
Local media sources have revealed that the statement from the bank has been faxed to the newspaper media, acknowledging that the investors have faced terrific losses due to the volatility of the currencies.
The bank stated, “Unauthorized statements made in the past short period on the function of the (Central) Bank which have resulted in losses for traders and entrepreneurs.” The bank stated that from economic point of view, there is no justification for such statements. Rumors are making strong stand, revealing that the bank would either halt of reduce the amount of hard cash it auctions on a daily basis were to blame.
Through the daily auctions, bank approximately sells up to $200 million dollar to other banks and the public were seen as a stabilizing factor.
However, in spite of arranging auctions, the price of dinar is falling downward, which is a big concern for the economy of the country. In the past few days it has been trading on the spot at more than 1300 to one U.S. dollar while the official price is about 1100.
But the dinar’s lower value on the streets of Baghdad in comparison to the official prices has been a source of manipulation and corruption.
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