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Hue Mi
12-10-2013, 06:14 AM
High limit interest rates attracting investments (http://www.alsabaah.iq/ArticleShow.aspx?ID=59959)

10/12/13 12: 00 am
Baghdad-Farah pumice

A bank expert that the interest rate in Iraqi banks are limiting investments to the country and thus negatively affect the process of economic development.

Banking expert muwafaq Hassan said for (morning): "the banks income comes from commissions charged by the exporters of services, and other benefits for bank lending" as the main source of these banks and is the source of profits.

Deflate

"The commissions and interest in Iraqi banks don't move much, especially that of Central Bank left for banks, without interfering in the interest rates and fees charged by it in the year 2005-2006 was high, as the Central Bank was encouraging banks to deposit the benefits of daily, weekly and monthly to deflate was granted the benefits of between 16 and 18 percent, and named the night deposit (Over Night).

Promise this deflationary policy, since the withdrawal of liquidity from circulation which affects the level of inflation it gives benefits to encourage banks not lending, deposit, but it could reduce the rate of inflation in 2010 and reduce benefits gradually, noting that they currently earn between 12-15 percent and is also considered high compared to other countries, in return for interest paid on deposits of between 4-6 percent, which marks a rise in financial market.

Interest rate

And the good that when comparing the interest rate paid by a certain bank deposits, the interest rate charged by the lending found there is a big difference, stressing the need to take into account the cost of borrowing (Cost of Funding), higher current account deposits fixed deposits & farewell lower the cost of borrowing, especially the average varies from one bank to another

The bad influence and discouraging investment, loans for development under construction factories, roads and agricultural projects are few and the numbers you give are incorrect according to their banks, as well as other effects of expelling investment security, in addition to routine transactions.

Central Bank had decided to give private banks to determine interest rates on loans to citizens, with banks based in determining benefit eligibility to signal the monetary policy interest determined by the Bank The central basis of higher levels of inflation in Iraq.