Iraq May Experience Critical Financial Situation by Stopping Auction Sale at CBI: Ali Mohsin

The Governor of the Central Bank of Iraq stressed that closing window for selling foreign currency especially the U.S dollars. It would lead to the collapse of Iraqi dinar and create severe financial & economic situation in the country. He said in a statement regarding the annual conference of the Union of the Arab Banks held in Beirut. He said that Iraqi Central Bank is well committed to its work, though decreased the sale of foreign currency in its auction sale of foreign currency will create more critical financial & economic situation in Iraq. He added that decrease in the sale of foreign currency would increase the U.S dollar price in Iraqi domestic market and it would expectedly be reached more than 3 thousand Iraqi dinars per U.S dollar. The Governor Ali Mohsin pointed out that the cancellation of foreign currency auction sale needs trillions of Iraqi dinars to be printed per year in order to cover the local requirement of Iraqi dinars.

Iraq May Experience Critical Financial Situation by Stopping Auction Sale at CBI: Ali MohsinIt would also lead to inflation in the country. He also denied about any kind of planning for coin auction at the Iraqi Central Bank, but the sale of foreign currency has its own importance. He stressed that the Central Bank of Iraq should not be considered a third-party between the Iraqi Finance Ministry and Iraqi citizens. He also pointed out that the perfect solution in the country needs to reduce the demand of the U.S dollar by restructuring the Iraqi economic structure, instead of stopping the sale of foreign currency at the Iraqi Central Bank. Some reports have indicated that Iraqi citizens are losing their confidence on Iraqi banking sector because there are only 11 percent Iraqi citizens having bank accounts in Iraqi banks. The reports further mentioned that at least 37 trillion Iraqi dinars are stuck in their homes and 45 Iraqi private banks are using modern electronic system in order to attract more customers to their banks.

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