Don961: Centralization and economic confrontation
Friday, April 17, 2020 Samir Al-Nassery
Since the beginning of the last quarter of 2019, Iraq has been going through many complicated political and economic conditions and challenges, to which the repercussions of the spread of the Corona virus have been added in most of the world countries, including ours. .
What matters to us here is the state of the Iraqi economy in the current circumstance and how it will be able to overcome its economic and financial crisis expected during the coming months, since the central banks in the countries of the world aim mainly to achieve economic stability and overcome the challenges of instability in the monetary system and the financial system through its programs and strategies and facing crises and challenges Economic shocks in particular, and working in accordance with monetary policy tools and means in achieving the required support for national economies.
This is what is happening now, as most of the central banks in the countries of the world have drawn up proactive plans to confront the effects of corona in the global economy and have allocated allocations and treatments in the applications of monetary policy and unite the world economies in support of the orientation of central banks and the G-20’s decision in its last meeting to pump $ 5 trillion in Global market to revitalize the economy. And what is happening now is the efforts of the oil producing countries to address the low prices and try to return to its prices near 50 dollars a barrel after agreeing to reduce production by 10 million barrels per day.
All the international measures taken by the countries of the world were previously used by the Central Bank of Iraq during the economic and security shocks after 2015 and had experience of success in supporting the national economy and achieving economic resilience.
According to a press statement of the Central Bank by taking immediate decisions to enhance the liquidity of banks by one trillion dinars by reducing the percentage of legal reserves for banks at the Central Bank, postponing penalties and fines, activating their investments with the bank and other important decisions to stimulate the economic cycle and granting a fundamental role for the banking sector in supporting the government effort to bypass the current circumstance, its initiative is added to it To make a donation to support the Ministry of Health in the face of the epidemic and to postpone the monthly installments of borrowers from the SME Funding Initiative.
From my vision as an observer and a follower of the current economic situation and the country is about to form a new government whose primary goal will be to overcome our economic and epidemic crises, I can say that the central bank with its issued decisions has started the corresponding attack in support of the national economy and is bent on a new success experience, because I see that Iraq’s problems lie In the economic solution and this solution is in the hands of the Central Bank of Iraq.
Therefore, the Central must be granted freedom to implement its economic plans and procedures.
OlLar: Great minds think alike , I wholeheartedly agree !
MilitiaMan: That makes three of us!
They clearly state the solution is in the hands of the Central Bank!!
They must be granted freedom to implement its economic plans and procedures.. One of the plans was to cease the Dollar Auctions and slow the private banks and money exchangers pick up the ball and run with it. The Central bank will be selling Dinar at an international level and they now have facilities in place from the IMF and the UST imo!!
So, it sure looks like the keys to the CBI maybe handed off to some to be determined in the near future after Alak raises the “secret” exchange rate before he heads over to the AMF top position. He won’t be handing off the keys at a program rate imo!! No way.. That is not the solution!
Putting this out kinda late on a Friday too makes me feel fairly confident they have every intention now to use the facilities to support their reserves and Foreign reserves while they are at it!!
That is what the FIMA action and the CML ushered in and will allow for!! No more auctions by the CBI and they have access to the facilities to do exactly that.. Legitimate trade in a legitimate currency that can even use the SDR Basket if need be like the rest of the bigger players in the world.
It sure looks like Nassery knows what is coming to the citizens. We may see more from. The CBI over the weekend.. When Nassery talks people listen!!! Imo – MM
GodLover: Another good read that stresses the necessity for the new PM & cabinet to get approval/seated & send 2020 budget to parliament so the CBI will be able to implement the economic reforms imo
MilitiaMan: There has been recent articles showing the Caretaker Government has been at work in regard to ER and MR. They were talking about the secret exchange rate and the ongoing with Finance Ministers, the IMF, etc!!
They have authority to allow Alak with power of Attorney to keep the process underway. If the acquiesce the new PM in so be it, however, the CBI has the ball and will be the one show casing the exchange rate not the potential new guy as PM.
There is no guarantees he will make it anyway.. so with the auctions having been apparently sorted Thursday to be caught up to the 16th, Alak may very well something to say soon..
As the CBI is in the business to make money and no sales is not bringing in money nor is it supporting their reserves. The CBI will not want to waste much more time and the longer it takes the lesser they make. Imo -MM