Iraqi Central Bank lends banks $ 5 billion at the request of Parliament

Economy 05/18/2015

Central Bank of Iraq has decided for the first time in its history, opening its vaults, and start lending sector and civil government banks the amount of $ 5 billion. The decision comes in response to the request of Parliament who expressed fear of a recession these institutions «alarming», confined its activity after an auction of hard currency earnings to the government stop the central bank.

He said the bank's governor on the Keywords, that «the possibility responsible for monetary policy management of the bank, to intervene in cases of financial and monetary crises in order to maintain the stability of the domestic market and the price of the currency exchange, and strengthen the banking structure of the State, which is one of the most important sectors after oil».

He pointed out in a statement to «life», that the Ministry of Finance «reluctant to perform the procedures (15) issued by the Supreme Economic Committee of the Council of Ministers in order to activate the work of private banks, notably the re-letting of the Iraqi Ministries to open accounts in these banks, as a result of the reluctance is clear in a few of them. » So «intervention has become necessary to revive the sector.»

He announced the government sector lending banks «5 trillion dinars ($ 4.8 billion), and include« Agricultural Bank »and» industrial »and» Housing »and» real estate ». The private banks lent billion, its wheels in order to enable them to manage and advancement of their betterment. » He believed that «the exploitation of these loans in the investment projects will greatly benefit them.»

The Chairman of the Committee on Economy and Investment parliamentary Jawad al-Bolani, that many banks «sent a distress call to the parliament, which announced its entry into a spiral of recession and anxiety about the future, after the central bank adopted new policies to curb money laundering and smuggling operations abroad, Vhsrt remittance by the process In addition to an emphasis on import operations ».

He stressed that the Parliamentary Committee «responsible for the investment and management of the economy file», adding that «any delay hinders a particular sector, particularly the banking sector, forcing us to intervene to prevent confusion, as well as search always for a new door to increase national income through investment.» He added that «invest $ 5 billion in the Iraqi market, will benefit all sectors of the economy.»

Iraq has suffered a major financial crisis as a result of decline in the value of oil in the world markets, causing the lifting of the proportion of the budget deficit for this year to $ 22 billion.

Keywords and pointed out that «priority in lending to the private banks will be given to the owners of small and medium-sized enterprises, which form in the economies of many countries, 80 percent of the gross», pointing out that Iraq «helpless yet for knocking on the door for large projects or companies, is therefore an important consolidating the culture of This type of projects. » He said that the interest rate will be «symbolic».

He revealed near the issuance of banknotes from the category of 50 thousand dinars ($ 40), to reduce the volume of cash in circulation. While experts preferred to postpone the issuance of another paper from 100 thousand to class next year, in anticipation of the events of a defect in the stability of the dinar exchange rate. »

And the central bank aims to delete the three zeroes from the Iraqi currency, he saw that the current situation «inappropriate» because «an important step like this need to be a security and political stability and the control of the law on full Iraqi ground».

For instructions applied «Central» to control the money transfer between conservative process, Keywords pointed to «asylum system imposes on the bank put insurance by 5 percent of the amount transferred to the outside, and turn it in turn to the Ministry of Finance and Customs». He announced that this process «made a return to the state treasury exceeded 227 billion dinars, just two months after its application.»

He predicted that «beyond the revenues from import duties and $ 12 billion later this year».

And the fate of the banking companies, Keywords confirmed that its «almost stopped after most of the world has stopped dealing vouchers dollar, it is limited to large banks».

He pointed out that these companies «demanded by turning to Islamic banks, and agreed« Central »on request in order to take advantage of the capital of these companies within the banking sector».

He said that the problem of money out of Iraq through unofficial «deliberately caused by a large number of traders to buy dollars from the market and used, for fear of the inclusion of the tax held accountable for their dealings, and here begins operations out of money.» He stated that «traded in the currency market size currently stands at $ 39 billion».