Central Bank Law to be Modified to Borrow by Iraqi Government

Iraqi Dinar 123 News:– A legal expert Tariq Harb issued a statement that Iraqi government should prepare modified draft law for Iraqi Central Bank and this amended law to be approved by the Iraqi House of Representatives. The purpose of new modification is to borrow from Central Bank of Iraq and to avoid external or foreign borrowing in order to meet financial issues including payment of salaries. It is important that first five days of January 2016 shows fearful and distressing statements by the government officials regarding the economic and financial crisis and most of them predicted that Iraqi government would be unable to pay salaries for government employees after the month of April 2016.

Point to be noted that Iraqi Central Bank announced on 5th January 2016 that they have 60billion U.S dollars reserves and the law of Central Bank is preventing legally for granting loan to Iraqi government. It is not allowed by the Bank Law No. 56 and Article 26 of 2004 because it is not constitutional to grant loan to Iraqi government. So, new modification in the Article 26 is much necessary to borrow from Iraqi Central Bank and to avoid external borrowing. The Iraqi government is planning to borrow 15 billion U.S dollars which is considered a huge amount. But, it would fulfill most of the financial requirements including payment of salaries to government employees. It would also help Iraqi government to stop foreign borrowing which is more harmful than getting loan from Iraqi Central Bank.

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