Economy News

The central bank and banks urgent action to control the foreign currency market

Today, the Board of Directors of the Central Bank took an important decision to control the exchange rate, as the selling price of the dollar to the beneficiary (the bank’s customer) whose imports the bank finances with documentary credits was reduced to 1465 instead of 1470, as the Central Bank will sell the dollar to banks for the purposes of opening documentary credits by an amount of 1455 instead from 1460.

Immediately, the Association of Iraqi Private Banks issued a statement endorsing and supporting the Central Bank’s procedures and called on all banks to work at the new rate and facilitate the access of merchants and businessmen from the bank’s customers to obtain their needs of foreign currency.

It is no secret to the economic elites and citizens that the economic and political conditions and their repercussions negatively affect stability in the monetary system and the financial system, and thus this will lead to economic instability and confusion in the market, in addition to that, a few days ago, a new wave of criticism began from some media outlets affected by the rumors that it is launching and moving. Speculators in the currency exchange market with the aim of creating a state of confusion and instability and attempting to drag the money market into instability and thwarting the central bank’s plans to control the target rates of the exchange rate, which has remained stable since its adjustment to the new prices for finance, banks and the public. Speculators have taken advantage of the decline in dollar sales in a window Selling foreign currency, which the Central Bank clarified in a clear statement that the reason is the application of a new electronic platform to control external transfers similar to the letters of guarantee platform currently implemented, and given the insufficient readiness of local banks with the start of the applicationThe demo of the platform, as part of the foreign remittances was postponed, which resulted in a decrease in the sales volume of the foreign currency sale window, and among other rumors is that the central bank will make a new change to the current price.

Although the Central Bank has repeatedly announced that there is no intention to change the price at present and explained the negative effects of any change in the price on the national economy, commercial exchanges, and local and foreign banking dealings with countries of the world, and that the exchange rate is determined by the Central Bank according to the effects and repercussions of the economic reality in a country like Iraq that suffers from Challenges, repercussions, economic and financial crises, and a structural and systemic imbalance in the management of the economy and money are not borne by the Central Bank alone because its role is clear, specific and independent. It is concentrated in stimulating the economy according to the tools and applications of monetary policy. However, this cannot be achieved without joint coordination with fiscal policy and other economic sectors, activating the real economy and diversifying sources of income. The national economy and leaving the unilateral economy depending on oil as a major resource that constitutes 93% of the general budget revenues and 60% of the gross domestic product.Supporting local production and operating the suspended factories, which number more than 140 government factories, and reducing dependence on imports.

Therefore, those who criticize the central bank must be aware of this and that the central bank’s announced measures to increase the dollar supply through its regular outlets and banks and the new reduction will inevitably lead to the return of the price to its target rates, inevitably and quickly, and that the sudden rise yesterday has clear reasons, as indicated above.