The central bank reveals its dollar reserves and commented on the 2020 deficit


Release date:: 2019/17 8:59

(Baghdad: Euphrates News) The Governor of the Central Bank of Iraq {agency} Ali Alak that the Central Bank reserves of foreign currency comfortable and good but exceeds international standards.

Al-Allaq said in a press statement that “the law prohibits the use of this reserve to lend to the government in order to fill the budget deficit, but it is used to stabilize the exchange rate and the strength of the local currency.”

He pointed out that “the amount of the budget deficit for 2020 is not yet established as indicated by the Ministry of Finance, and that what is being circulated is just hypothetical figures and not yet settled, indicating that the upper limit of the deficit must be consistent with the new financial management law.” .

He stressed that “our reserves of foreign currency are comfortable and good and within international standards; but exceed the normative ratios, but according to the law is not to cover the deficit, but is a cover for the local currency, and the strength of the exchange rate and the strength of the Iraqi dinar depends on this cover, so the process of linking the reserve and cover the deficit The Central Bank law does not allow the reserve to be used to lend directly or indirectly to the government, but rather to preserve the value of the dinar against the dollar. ”

And the relationship, that “the stability of the exchange rate is a central objective of the Central Bank and seeks to achieve by all means, and it depends mainly on the economic performance of Iraq, the stronger the economy was to maintain the exchange rate stronger, and our economy is subject to fluctuations The basis for the country, which is also the basis for foreign currency. ”

Between the relationship, that “the stability of the exchange rate is a central objective of the Central Bank and seeks to achieve by all means, and it depends mainly on the economic performance of Iraq, the stronger the economy was to maintain the exchange rate stronger and get the economy, which is dependent on prices Precisely managing reserves to achieve stability is important, as there can be a balance between the supply and demand of a foreign currency, and when supply disrupts The exchange rate, and the reserves we have so far, are able to cover the demand for the dollar and thus keep the price under control. ”

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