The Central Bank denies the scarcity of cash liquidity and describes its currency and gold reserves as “historic”, 2 OCT

 The Central Bank denies the scarcity of cash liquidity and describes its currency and gold reserves as “historic”

10/2/2023

A source in the Central Bank of Iraq denied that there was a “scarcity” of cash liquidity in the country’s markets.

The source confirmed to Al-Furat News Agency: “There is no scarcity of cash, and cash is available despite the current policy, which is a contractionary policy, but cash is available.”

He pointed out that "the foreign reserves and gold at the Central Bank are at historical levels, and the electronic platform is open to anyone who wants to officially enter into buying the dollar at the official price."

Specialists in economic and financial affairs reported that despite the large size of the monetary supply, which amounts to (83) trillion dinars, there is a noticeable scarcity of cash liquidity from the Iraqi dinar in the commercial markets, explaining that this comes for several reasons, the first of which is mismanagement. 

The financial file in the country.

Professor of Economic Affairs, Jaafar Alloush, said in a press statement that “the problem of liquidity scarcity - if it exists - is linked to a number of factors, including the economy’s lack of monetary flexibility in managing public money, while official monetary indicators do not indicate the existence of a liquidity scarcity.” ". 

He explained, "The problem is that the largest portion of the issued currency is with the public, which accounts for 91.3% of the issued currency, amounting to more than 90.070 trillion Iraqi dinars of that currency outside the banking system, and despite the fact that this (huge) monetary mass is used for transaction purposes from... before the public and to carry out its daily economic activity, but it is outside the control of the monetary authorities.”

Raghad Dahham   LINK