The Governor of the Central Bank, Ali Al-Alaq, confirmed the stability of the financial situation in Iraq, and revealed new mechanisms to facilitate foreign trade, including a new mechanism for small traders’ transfers. He also pointed to the importance of the upcoming meeting in New York to resolve the problem of sanctioned banks, stressing the existence of a government move to strengthen the banking sector.
Financial situation in Iraq
Al-Alaq confirmed in an interview with the Iraqi News Agency (INA) that "the financial situation in Iraq is still proceeding according to what is planned in the state's general budget, despite external and local challenges." He explained that "there is high coordination between the Central Bank, the Prime Minister and the Ministry of Finance to ensure the stability and sustainability of the financial aspect."
He added: "We are working closely with the Ministry of Finance to implement the financial plan drawn up in the general budget, which ensures that the objectives, programs and needs are covered." He also pointed out that "the rotation of allocations for governorates and ministries is happening for the first time, which contributes to providing the necessary balances for their role."
Foreign trade
Al-Alaq stated that “the Central Bank is making a major shift in organizing foreign trade to achieve transparency in foreign transfer operations, starting from the transfer and reaching the final beneficiary.” He explained that “this process includes international auditing institutions to ensure that the information is in line with local and international standards.”
Al-Alaq pointed out that "the audit process used to be conducted later, but now the process does not proceed unless all conditions and documents are met." He stressed that "large and medium-sized importing companies have adopted this new system, which contributes to securing their imports with high fluidity."
Other international currencies
Al-Alaq said: “The Central Bank has opened channels for Chinese, Turkish, Indian and Emirati currencies, which represent a significant weight in foreign trade.” He added that “the suspension of these operations for a period was aimed at providing sufficient oversight of these operations, and that a new audit mechanism has been put in place by an international company.”
He explained that "commercial foreign transfer operations are now subject to review by the competent international company, to ensure the safety of the operations."
The difference between the market and the official price
Al-Alaq confirmed that "the Central Bank sells more than $250 million daily at the official price to cover foreign trade, which explains the absence of inflation or price increases." He explained that "the parallel market consists of illegal trade or trade escaping from the fundamental procedures."
Al-Alaq pointed out that "the view of the dollar price should focus on the Central Bank's sales at the official price to settle various needs."
low inflation
"The central bank's main goal is to maintain the general price level and limit inflation," Al-Alaq said. "Monetary policy has succeeded in controlling this aspect, as the level of inflation in Iraq is much lower compared to other countries," he added.
Cooperation with the US Treasury
Al-Alaq praised the cooperation with international organizations such as the International Monetary Fund, the Federal Reserve and the US Treasury, explaining that "there is great praise for the transformations, management and organization of the external transfer process in the Central Bank of Iraq."
Al-Alaq pointed out that "the Central Bank is working to create a direct relationship between the Iraqi bank and the correspondent without going through the Federal Bank, with the aim of facilitating transfer operations."
Upcoming meeting in New York
Al-Alaq announced that "meetings will be held with the Federal Reserve and the US Treasury Department at the end of August to review all aspects related to external transfer operations and discuss sanctions on some banks."
Lifting restrictions on banks
Al-Alaq stressed that "lifting restrictions on some banks is of interest to the Central Bank," noting that "the banking reform plan includes auditing previous operations and contracting with an international consulting firm to develop a future strategy for the banking sector."
Housing Initiative
Al-Alaq revealed "a government move to increase capital to support the housing sector through the Real Estate Bank and the Housing Fund." He added that "the Central Bank plays an exceptional role in bridging the housing financing deficit."
Al-Alaq explained that "the government will increase the capital of the Real Estate Bank and the Housing Fund to support the housing sector," stressing that "the Real Estate Bank will work to meet all requests to purchase housing units." link
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