Central: I will not lend money to the government and us, the subject of the deletion of zeros
Friday November 28, 2014 – 19:05
The Central Bank of Iraq, said Friday that the drop in oil prices will not be a reason for the government to borrow from the bank, he was among the subject in order to delete the zeros from the currency.
The central bank said in a satellite radio tow statement that “the decline in oil prices will not be a reason or motive for the government to borrow from the central bank,” attributing the cause to be “the Central Bank Law No. 56 of 2004 with Article (26) does not allow the government to borrow from the central bank reserves Because the ability to exchange in the budget exceeds the ability to achieve the resources as well as the bank’s reserves earmarked for economic stability. ”
He stressed that “the growing tide of resources to achieve its resources is meant to generate new cash and the issuance of inflation borne by future fiscal years without justification.”
The bank added that “countries with economies dependent on oil, such as Iraq, the net foreign currency derived from the sale of oil is a mainstay cash basis it because it relies on oil to finance its spending and dramatically.” He explained that “the Iraqi government, specifically the Ministry of Finance are replacing foreign currency (dor) that you earn from the sale of oil with the Central Bank of Iraq for the local currency (the dinar), to be able to cover internal expenses, so the foreign reserve resources growth (dollar) when the government consists of increasing the prices and quantities of oil sold. ”
He continued that “this will enable and continuously available from barter with the central bank for the local currency (the dinar), and in quantities that you need, but with the drop in oil prices, the oil revenues certainly be affected would be reflected on the low cash reserves at the central bank.” On the other hand, stressed Bank CBI, that “the subject of the deletion of zeros from the currency has been postponed for the time being.”
The Oil Ministry has approved in the (18 October 2014) that the government has not yet determined the price of a barrel of crude to be adopted as a basis for the preparation of the budget next in 2015, indicating that efforts are currently ongoing in coordination with OPEC members, to determine the estimated taking into account the challenges and fluctuations in world prices and spare the economy National any negative impact, while experts called to the need to find alternatives to support the local economy and the adoption of the austerity policy and an end to disputes with the Kurdistan region of re-exports from the northern fields.b