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An economist diagnoses weaknesses in the banking system: 80% of the cash supply is in citizens’ homes
Economy | Yesterday, 15:00 |
Baghdad today - Baghdad
Today, Sunday (August 18, 2024), the specialist in financial and economic affairs, Alaa Glob Al-Fahd, revealed a
weakness in the Iraqi banking system, while confirming the presence of
80% of the cash mass in citizens’ homes. Al-Fahd told "Baghdad Today",
"The volume of cash that is pumped into the local market estimates the volume of annual government spending, and
this includes salaries, wages, etc., and
it constitutes a large percentage and is considered the purchasing power of the citizen." He added that
“the rise in income levels after 2003, due to the increase in salaries, led to an increase in purchasing power, and this led to an increase in the level of demand, whether for real estate or otherwise,” indicating that
“the rise in real estate prices has no relation to the issue of whether or not the citizen’s cash flow increases.” Because this increase depends on the issue of supply and demand.” Al-Fahd explained that
“any increase or decrease in the volume of liquidity is estimated by the volume of real spending and the volume of savings, given that the
citizen’s income is divided between consumption and saving, and
as the rate of saving increases, it is assumed that it will be exploited economically through investment.” He stated that
“there is a weakness in the ability of the banking system to absorb all the cash liquidity available to citizens, as
this liquidity is mostly inside homes far from banks,” noting that “the
amount of cash liquidity present in homes among citizens is estimated at more than 80% of the cash mass issued, and
this It constitutes a weakness in the banking system by withdrawing that mass and investing it.”
It is noteworthy that the financial expert, Saleh Al-Banker, confirmed on Tuesday (August 6, 2024) that
Iraq is among the top countries in the Middle East in the file of hoarding funds, while
he diagnosed a grave error in the Iraqi banking system.
The banker said in an interview with “Baghdad Today” that
“the accumulations that have been continuing for many years have led citizens to lose confidence in banks and resort to hoarding money in homes,” noting that
“their percentage reaches 70% of financial flows, and
these are large numbers that indicate that
we are among The highest countries in the Middle East for hoarding money.” He added,
"Hoarding money in the financial concept is a grave mistake.
It will confuse the financial process and reduce the government's ability to provide cash to pay salaries," explaining that
"resorting to electronic payment is a step in the right direction,
but the most important thing is withdrawing cash, and there are several ways." The banker pointed out that
“the recent offering of treasury bonds is a correct decision,
but the media propaganda to create a culture of safe investment on the street is very weak, and
this is what creates low rates for dealing with them, even though the interest rates are attractive.” He stressed
"the necessity of seeking to expand the circle of withdrawing liquidity from homes and
creating a movement of money that contributes to increasing the recovery of investment and granting government loans, especially with requests that are five times greater than the amount of funds allocated for loans in any sector, especially housing."
https://baghdadtoday.news/255957-اقتصادي-يشخص-مكامن-الضعف-في-النظام-المصرفي-80-من-الكتلة-النقدية-في-بيوت-المواطنين.html
Economy | Yesterday, 15:00 |
Baghdad today - Baghdad
Today, Sunday (August 18, 2024), the specialist in financial and economic affairs, Alaa Glob Al-Fahd, revealed a
weakness in the Iraqi banking system, while confirming the presence of
80% of the cash mass in citizens’ homes. Al-Fahd told "Baghdad Today",
"The volume of cash that is pumped into the local market estimates the volume of annual government spending, and
this includes salaries, wages, etc., and
it constitutes a large percentage and is considered the purchasing power of the citizen." He added that
“the rise in income levels after 2003, due to the increase in salaries, led to an increase in purchasing power, and this led to an increase in the level of demand, whether for real estate or otherwise,” indicating that
“the rise in real estate prices has no relation to the issue of whether or not the citizen’s cash flow increases.” Because this increase depends on the issue of supply and demand.” Al-Fahd explained that
“any increase or decrease in the volume of liquidity is estimated by the volume of real spending and the volume of savings, given that the
citizen’s income is divided between consumption and saving, and
as the rate of saving increases, it is assumed that it will be exploited economically through investment.” He stated that
“there is a weakness in the ability of the banking system to absorb all the cash liquidity available to citizens, as
this liquidity is mostly inside homes far from banks,” noting that “the
amount of cash liquidity present in homes among citizens is estimated at more than 80% of the cash mass issued, and
this It constitutes a weakness in the banking system by withdrawing that mass and investing it.”
It is noteworthy that the financial expert, Saleh Al-Banker, confirmed on Tuesday (August 6, 2024) that
Iraq is among the top countries in the Middle East in the file of hoarding funds, while
he diagnosed a grave error in the Iraqi banking system.
The banker said in an interview with “Baghdad Today” that
“the accumulations that have been continuing for many years have led citizens to lose confidence in banks and resort to hoarding money in homes,” noting that
“their percentage reaches 70% of financial flows, and
these are large numbers that indicate that
we are among The highest countries in the Middle East for hoarding money.” He added,
"Hoarding money in the financial concept is a grave mistake.
It will confuse the financial process and reduce the government's ability to provide cash to pay salaries," explaining that
"resorting to electronic payment is a step in the right direction,
but the most important thing is withdrawing cash, and there are several ways." The banker pointed out that
“the recent offering of treasury bonds is a correct decision,
but the media propaganda to create a culture of safe investment on the street is very weak, and
this is what creates low rates for dealing with them, even though the interest rates are attractive.” He stressed
"the necessity of seeking to expand the circle of withdrawing liquidity from homes and
creating a movement of money that contributes to increasing the recovery of investment and granting government loans, especially with requests that are five times greater than the amount of funds allocated for loans in any sector, especially housing."
https://baghdadtoday.news/255957-اقتصادي-يشخص-مكامن-الضعف-في-النظام-المصرفي-80-من-الكتلة-النقدية-في-بيوت-المواطنين.html
