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Calls for activating the role of the financial sector during the economic reform
10/03/2012
Although he worked in all the circumstances
BAGHDAD - Al Sabah
Claims adopting a policy of economic reform promote productive sectors and services is needed to have a monetary and fiscal policies in support of the reform process, and achieve the desired goals during the time periods required by identified according to strategic plans, minutes, especially that the Iraqi economy suffered the devastation and destruction after 2003 is widely, as well as the great neglect experienced by all sectors prior to that date for a period of decades.
Economic researcher Riyad Obeid Saudi said that the structure of the Iraqi economy was hit in the period after 2003 much of the deformation result of exposure to many aspects of sabotage material in the general areas of the country, pointing to poor economic policies of the incubator for this structure, which seeks to promote the strengths of the Iraqi economy and to address weaknesses emerging in it.
He noted that the financial sector, even in these difficult circumstances of sectors efficient components of the various markets, institutions and tools running on the mobilization of domestic savings, and then directed towards sectors and economic activities more efficient and profitable, it works to attract foreign investment to provide additional funding would undoubtedly finance development efficiently. Noting that when the heads of State for re-building the pillars of the economy, it is a must-have to surround the sector priority in the programs of economic reform Taatkhaddha to cancel or reduce the degree of restrictions on the financial system in order to enhance the level of efficiency and the liberalization of market operations of financial constraints, which hinder the Securities at the local and international.
He added: The monetary and fiscal policies have the most important economic policies that play a bigger role in the effect on the financial sector, which relied on the distinctive development occur in the performance of this sector because the procedures in direct contact with the real performance of the institutions,
He explained that the monetary policy in Iraq has moved from direct intervention by the authority of the system prior to full independence under the new system and was the result of interference in the function of the central bank at the time that has infected the extreme vulnerability measures the monetary authority and the deviation of the reality of their actions for achieving the goals of that policy which led to the exposure of the Iraqi economy to crises in general and monetary, in particular, is reflected in the Iraqi dinar exchange rate, which fell drastically, especially in the nineties, reaching to (3000) dinars per dollar, which led to direct the citizen to keep foreign currency instead of the Iraqi dinar and interest in buying durable goods and real estate to maintain the maximum extent possible from the buying power of the Iraqi dinar.
He continued, saying that the central bank enjoyed after 2009, full independence of direct and Giralmbacrh, and in this period started in the monetary policy succeeded in achieving the goals of economic policy through the relative stability in the economy through Matsmah by its means to control the collection of domestic liquidity, also used the bank in 2003 currency auction foreign buying and selling of the dollar to ensure the stability of the Iraqi dinar exchange rate in the range of (1500) dinars to the dollar then began to decline gradually, and without it to less than (1200) dinars to the dollar. Which impacted directly on the reduced cost of import of goods and services imported, which occupies the bulk of goods and services offered in the Iraqi market and thus has the general level of prices lower, clear and remarkable stability in it, either at the level of exports, the effects that were not of value because Iraqi exports limited in size, except oil prices are determined according to a mechanism far from the Iraqi dinar exchange rate. It is natural that reflected the effects of the bank's decision to intervene in determining the exchange rate of the Iraqi dinar through public auction on the volume of liquidity in the home, which inevitably fell through the purchase of large amounts of dollar a day. Which was reflected in the prices of over sizing the demand for goods and services in all classes. This is in addition to the provision of central bank foreign currency to finance imports and the elimination of speculation in which that may be used by traders in this market. What helped in the face of inflation and to stop the aggravation. And it is important to note that these procedures and policies that Atkhaddha Central Bank is responsible for formulating and implementing monetary policy had a significant role in achieving tremendous success on more than one level, but that is not enough alone to achieve economic reform needed to ensure stability and higher rates of growth in all economic sectors to provide a good level of performance in the general economic activity. He said the Bank adopted a policy of raising interest rates in the early years after the political change an attempt to control the money supply to influence inflation, which is escalation scary in those years, however, that this policy led to the contraction of a clear negative effect on the outskirts of the Iraqi market with all its aspects.
He added that monetary policy has been able to achieve success and clearly in terms of improving the exchange rate of the national currency and reduce inflation in prices, which led on the whole to stabilize the economic situation and improve the purchasing power of the Iraqi dinar, which would have positive effects on the level of living of the citizen in the medium term and long term . He said, it is useful to follow the Ministry of Finance fiscal policy in line with monetary policy without neglecting the general objectives of the state budget facing the problems of employment unemployed in the economy and combat poverty and improve the level of fact, service, health and education, which all require further exchange as well as development projects, the provinces that need to be investment spending, and these are all put pressure on the Ministry of Finance to develop a policy is consistent with the direction of monetary policy and maintain the privacy of each. And as you make them at a high level of accuracy and coordination in the employment of Eduathma to achieve greater economic stability and growth in the development process.
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