Reasons behind Continuous Decline in the Reserves at CBI

A member of Iraqi Parliamentary Economic and Investment Commission Mamouri issued a statement regarding a significant decline in the reserves of Iraqi Central Bank up to 40 billion U.S dollars. Mamouri added in his statement that monetary policy of Iraqi Central Bank caused a massive amount of waste in the financial reserves at the Iraqi Central Bank. He added that current financial reserves at the Central Bank of Iraq are suggested at 40 billion U.S dollars and these reserves were recorded at 78 billion U.S dollars in 2013. He said that monetary policy of Iraqi Central Bank for selling foreign currency produced an extra amount of waste in the CBI’s financial reserves at the time when the price of U.S dollars reached at 1300 Iraqi dinars per U.S dollar in the Iraqi local currency markets.

Reasons behind Continuous Decline in the Reserves at CBIHe pointed out that Iraqi Central Bank was continuously selling Iraqi dinars at official price of 1200 Iraqi dinars per U.S dollar and didn’t change its official exchange rate. He further indicated that there could be an increase in the foreign currency reserves at the Central Bank by receiving percentage of profits for selling foreign currency, but we are looking at the opposite side of the picture. He stressed that CBI should implement a new policy to sell foreign currency according to the current situation through the open window. The foreign currency should be sold directly to Iraqi citizens at the fundamental market price to get the benefits for Iraqi federal budget. He pointed out that it is expected that CBI Governor and directors of state banks will explain in the coming days regarding the decline in CBI reserves and an increase in the exchange rate of U.S dollar.

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