The financial and economic advisor to the Prime Minister, Mazhar Salih, said today, Monday, that the reasons for the fluctuation of the price of gold in Iraq are not internal, but rather global, indicating that the Iraqi government encourages the import of gold because it is a “safe haven” for wealth.
“At the state or individual level, gold has historically been a safe haven for preserving the purchasing power of wealth, as people keep gold for that purpose, and the cycle of gold assets between rising and falling is usually slow. If we take the cycle of assets, we find gold, almost as an average, as it is of constant value among other wealth,” Saleh told Al Furat News Agency, explaining that “society has historically been accustomed to keeping gold as a tendency to preserve personal wealth.”
He added, “In the modern era, the state keeps part of its foreign reserves supporting the national currency in gold. For example, Iraq keeps about 148 tons of gold, which constitutes 10% of its foreign currency reserves.”
During the past month of February, Iraq’s gold reserves witnessed a significant increase, as data from the International Monetary Fund showed that Iraq had increased its holdings of the precious metal by 3,079 tons, bringing the total to 145,661 tons.
He continued, “The reserves are a diversified investment portfolio of gold and currencies such as the dollar, euro, pound, yuan, yen, and others,” describing this diversity as “based on basic global evidence, and it is not arbitrary.”
He pointed out that “this evidence was made in agreement with the International Monetary Fund, in terms of the percentages of monetary gold that support and are considered a cover for the Iraqi dinar.”
He stressed that the global standard for this is 10%, considering gold “not easy for fast payment operations and others, and it is heavy, but it is part of protecting reserves and confronting fluctuations in currency values.”
He explained that “the gold asset cycle is slow, so keeping it protects reserves from currency fluctuations. Iraq is not a maker of gold prices in global markets, but rather a recipient, because we are not a country that possesses gold wealth, but rather we import gold. Therefore, the entry of gold into Iraq is a good wealth that is better than the entry of consumer goods that are not valuable and drain resources. Gold is a “precious wealth for the future,” noting that “the gold discovered in the world is approximately 75%, and it is limited and not extensive, so central banks are pushing to keep a minimum amount of gold.”
He stressed that “the policy of encouraging the entry of gold into Iraq is an import of wealth, and as assets they represent good stores of wealth, so the state encourages this and the customs taxes on them are moderate,” indicating that “the gold markets in Iraq depend on two things: its price in the world and the extent of the rise or fall of the dollar, and we receive external visas at the value of gold and the dollar,” considering encouraging the flow of gold into Iraq “a good thing. Recently, the price of gold has risen in Iraq, as the price of a mithqal (5 grams) has exceeded 500 thousand Iraqi dinars.”
alforatnews.iq
