US Treasury praises government and central bank measures at Washington meetings, 24 APRIL

US Treasury praises government and central bank measures at Washington meetings

Economy News – Baghdad

Samir Al-Nusairi

During the visit of the Prime Minister to Washington and his meeting in the presence of the Governor of the Central Bank with the delegation of the US Treasury and the negotiations that took place on the financial and banking reform strategy implemented by the government and the Central Bank, the American side emphasized the praise of the reform measures and steps that resulted in regulating the financing of foreign trade and compliance with international standards in 2023 and the past months of 2024 and the bridging of part of the gap between the official rate and the equivalent exchange rate of the dinar against the US dollar.

 This refutes the criticisms, allegations and media amplifications of some satellite channels by abusing the Central Bank and the banking sector and referring to some violations in the issue of controlling the cash dollar, which was addressed at the time of the beginning of the application of the electronic platform. 

The important thing, which must be confirmed now, is that 100% of the external transfers made in accordance with the new relationship between our banks and the international banks correspondent in accordance with the instructions and mechanisms of the electronic platform are sound and transparent transfers in accordance with international standards and that the window of the sale of foreign currency is an economic indicator that achieves one of the objectives of monetary policy.

“The charges are directed at the Central Bank and banks to waste foreign currency without evidence of suspicions of corruption, money laundering or smuggling of currency, and the proposal that says that the sale of currency is a waste of public money, this is a description that has nothing to do with the economic process.”

It should be noted that “the process of the currency sale window began by the Central Bank on 4/10/2004 in implementation of Article 28 of the Central Bank Law No. 56 of 2004, which allows the Central Bank to sell and buy foreign currency.

 This process has continued to meet the needs of the Ministry of Finance of local currency for the purposes of the operational budget by purchasing the dinar from the public for the purpose of controlling liquidity levels, which is known as the process of monetary sterilization on the one hand, rotate the dinar and resale to the Ministry of Finance for the purposes of paying salaries and wages and securing government expenses, as well as meeting and covering imports, and maintaining a stable exchange rate targeted by the Central Bank.”

And that “the foreign currency sale window is considered one of the largest open market operations in controlling the local liquidity levels and putting the cash surplus in its sound paths, which is a good economic indicator and achieves one of the objectives of monetary policy. 

This is in line with the multidimensional functions exercised by the Central Bank of Iraq, it is concerned with financial stability, managing the payment system, managing foreign reserves, licensing and monitoring banks and financial institutions, and establishing preventive controls, in addition to other tasks related to the issuance of monetary and publishing data, indicators and economic forecasts.

And that “the main tasks carried out by the central bank are to manage monetary policy aimed at controlling inflation, stimulating the economy, balancing the balance of payments and achieving monetary stability.”

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