The Iraqi Central Bank, willingness to deleve the zeros of the Iraqi currency, iraqi dinar after the formation of the Iraqi Govt

October 23, 2010

The adviser said the Iraqi Central Bank Governor appearance of Mohammed Salih in an interview with “Alsumaria News”, “The zeros that are added to the Iraqi currency, during the last period, formed a cluster of large cash amounting to more than four trillion paper money, financial value amounted to 27 trillion Iraqi dinars, after that was 25 billion dinars in 1980, “noting that” Iraq is unable to manage this block because it is a small country where the large number of funds that traded on the Iraqi market has led to confusion in transactions for large commercial banks and in the work. ”

The Iraq and gradually the issuance of new banknotes after 1991 when it began currencies scarce on the market Iraq for several reasons, most notably the high demand for the fill buying and selling and smuggling of currency abroad, and to the north of Iraq, which split its time for the Central Administration, making the Iraqi government allows Central Bank of printing new banknotes to meet the local need, and continued the process of lifting of the zeroes of the dinar to beyond 2003 through the issuance of a class of cash amounting to 25 thousand dinars.

Saleh added that “the Bank has fully prepared to delete the zeros of the Iraqi dinar, once forming the Iraqi government,” noting that “the deletion of zeros is a national issue and may need to special legislation, despite the fact that the Central Bank of Iraq is a reform of the currency management from the core work and to delete the zeros is one of the strategic functions of the Central Bank of Iraq. ”

Saleh pointed out that “the Bank was able, during the last period, to reduce the level of inflation to the level of one decimal place, after more than twenty years,” noting that “Iraq could for the first time to reduce inflation to 3%, which reflects the success of Iraq policy,” monetary .

For his part, said economic expert on behalf of Jamil Antoine in an interview for “Alsumaria News”, “Iraq is not formatted for the time being to delete the zeros of the Iraqi dinar,” noting that “the deletion of zeros needed to stabilize the security and political, as well as economic stability.”

Antoine said that “the central bank by seeking the deletion of zeros from the Iraqi dinar is designed to give moral force, not physical strength of the dinar,” noting that “the deletion of zeros needed to create and cultural awareness for the Iraqi people and the Iraqi market.”

The CBI, with headquarters in Baghdad, has four branches in Basra and Sulaymaniyah, Irbil and Mosul, and founded the bank independent Iraqi under the law of the Central Bank of Iraq issued on the sixth of March 2004, and is responsible for the maintenance of price stability and the implementation of monetary policy, including policies, prices exchange and management of foreign reserves and the issuance of currency management, as well as to regulate the banking sector. (Source) CBI

By Bernhard Schell

IDN-InDepth NewsAnalysis

BAGHDAD (IDN) – Almost a quarter of Iraqis live in poverty, spending less than the equivalent of $2.20 per person per day. More than half of Iraqi children do not complete their primary education on time and, despite progress achieved in reducing child mortality, the country has the second highest rate in the region, says a new United Nations report.

The U.S. Bureau of Census estimated in July 2010 that with 29.7 million Iraq was the 40th largest populated country in the world.

But the report also contains some good news from Iraq. It says that progress has been made in a number of areas towards achieving the eight Millennium Development Goals (MDGs) in the war-torn country. It comes within three months of the UN and Iraq embarking on a programme to enhance the country’s governance, social services and economic growth over the next five years.

The areas in which progress has been made are: reducing hunger and child mortality and promoting gender equality. However, there is slower progress reported in other crucial areas: enrolment in primary education, unemployment and access to safe and reliable water and sanitation services.

The Government of Iraq and the UN have, therefore, agreed to boost efforts to address these issues by 2015, the global deadline for achievement of the MDGs, paying special attention to reducing the gaps between the rural and urban areas.

Iraq’s Deputy Minister of Planning, Dr. Sami Metti, says: “After decades of economic stagnation, reduced access to essential services due to wars, sanctions and conflicts, there is no better means than the achievement of the MDGs to make the lives of millions of Iraqi individuals a better one and Iraq a safe and prosperous country.”

“The Millennium Development Goals for Iraq contain a set of key milestones for achieving a better future for the country and its people” said Christine McNab the United Nations Resident and Humanitarian Coordinator for Iraq.

“Supporting Iraq to achieve the MDGs is among the United Nations’ top priorities as this will ensure a better life for millions of Iraqis including those who will make Iraq’s future: the youth and the children” she added.

In September 2000, leaders from 189 Member States in the Millennium Declaration agreed on a vision for the future: a world with less poverty, hunger and disease, greater survival prospects for mothers and their infants, better educated children, equal opportunities for women, and a healthier environment; a world where developed and developing countries would work in close partnership for the well-being of all.

This formed the basis of the MDGs which the member states committed to achieve by 2015.

The report, released in Baghdad on August 5, is part of an outreach campaign launched by the UN and the Government of Iraq to promote and raise awareness of the importance of the MDGs as part of the development efforts agreed upon in the 2011-2014 UN Development Assistance Framework (UNDAF) signed in May 2010.

The signing of the agreement marks “the start of a strengthened partnership for achieving a better future for Iraq and its people”, McNab stressed, voicing hope that it will “make significant contributions to improving the lives of all people in Iraq”.

The plan targets five key areas: ensuring inclusive economic growth; environmental management; promoting good governance and protecting human rights; boosting access to basic services for all; and stepping up investment in women, youth and children.

“We will continue to reach out to the most vulnerable groups,” including the disenfranchised, the internally displaced, and refugees”, the UN Resident Coordinator emphasized.

The issues covered in the new roadmap were selected to support Iraq’s five-year National Development Plan, which envisages over $200 billion in investment in services, economic stimulus and environmental protection from 2010 to 2014.

This is the first-ever UNDAF for Iraq, but others have been implemented in countries such as Timor-Leste and the Sudan.

“Over the coming five years we will work closely with the Government of Iraq and key partners — including civil society, academia and the private sector — to promote the MDGs and raise awareness on the importance of achieving them in line with Iraq’s national priorities,” McNab stated.

The report’s key points are:

– Nearly a quarter of Iraqis live in poverty spending less than 2,500 Iraqi dinars (2.2 US$) per person per day.

– Youth unemployment is 30% double the national average.

– Women’s share of wage employment outside agriculture fell from 11% to 7% by 2008.

– More than half of Iraqi children do not complete their primary education on time.

– The proportion of children dying before reaching the age of five has fallen from 62 to 41 per 1,000 live births.

– Despite the progress achieved in reducing child mortality, Iraq remains the second highest country when compared with countries in the region.

– Just a quarter of households in Iraq is covered by the public sewage system dropping to 2% in rural areas.

– More than 80% of Iraq’s water remains untreated which leads to increased pollution of Iraq’s wastewater.

– Only 6% of Iraqis use the internet daily while more than 75% use mobile telephony.

The report contains a series of maps and graphs with analysis on the progress Iraq has made towards achieving the MDGs. All these maps are available for the public use.

EDUCATION

The UN is also stressing that more public spending is required in Iraq to ensure quality education for all, a right enshrined in the nation’s constitution.

“Iraq faces considerable challenges to improve access to education and guarantee that girls and boys have equal opportunities,” said McNab as the world body-backed Global Action Week for Education got under way on April 20, 2010.

She appealed for stepped-up resources for the Government to ensure that it provides education, from early childhood care and mainstream schooling to literacy and life skills for youth and adults.

Iraq has increased the budget allocated for education from 7.2 per cent in 2008 to nearly 10 per cent last year, but much more needs to be done to meet the 2015 target of 100 per cent enrolment in primary schools in rural areas, one of the eight MDGs and one of the six internationally-agreed targets of ‘Education for All’, a UN-backed movement launched in 1990.

Global Action Week aims to raise awareness of the importance of Education for All, whose importance was reaffirmed by more than 160 nations in the Senegalese capital, Dakar, in 2000.

This year’s week called on governments and donors to act together and mobilize their resources, as well as to honour the $50 billion pledge to boost education made at the Group of Eight summit in Gleneagles, Scotland, in 2005.

“Of all of the issues confronting Iraq’s children, the decline in children’s right to access quality learning has perhaps the most alarming implications for Iraq’s future, the next generation’s doctors, teachers and leaders,” said Sikander Khan, the Representative of the UN Children’s Fund (UNICEF) to the country.

This year’s Education for All-Global Monitoring Report 2010 by the UN Educational, Scientific and Cultural Organization (UNESCO), entitled Reaching the Marginalized, found that the global financial crisis threatens to deprive millions of children in the world’s poorest countries of an education, especially in sub-Saharan Africa, with a knock-on effect on future economic growth, poverty reduction and progress in health and other areas.

“While rich countries nurture their economic recovery, many poor countries face the imminent prospect of education reversals,” UNESCO Director-General Irina Bokova said when the publication was launched in January, noting the failure of donors to deliver on pledges.

“We cannot afford to create a lost generation of children who have been deprived of their chance for an education that might lift them out of poverty.”

The report urges rich countries and the so-called G20 group of developed and developing countries to scale up aid needed to avoid damaging budget adjustments in the poorest countries, stressing that a financing gap of $16 billion a year must be bridged to reach the Education for All goals.

Rich countries international and financial institutions are exaggerating how much aid they provide to help poor countries cope with the financial crisis, using “smoke and mirrors” in their reporting, it says. (IDN-InDepthNews/12.08.2010)

As Iraq intends to use the domestic counterpart of IMF resources for budget support, the Central Bank of Iraq (CBI)—which is the fiscal agent—will request the IMF to disburse the resources directly into a government account at the CBI. To provide adequate safeguards to the Fund, the following steps have been taken or will be implemented in the near future:

- A Memorandum of Understanding has been agreed between the CBI and the government clarifying responsibilities with regard to servicing the debt to the Fund;
- An external auditor has been appointed to undertake the audit of the CBI 2008 financial statements in accordance with International Standards on Auditing, and the audit is expected to be completed by March 31, 2010. The external auditor has already completed a verification of the CBI’s international reserves as of June 30, 2009. The completion of the external audit will allow the IMF to prepare a safeguards assessment update by the time of the first review of the program. In the future, the CBI will work with the Ministry of Finance to adopt a timely selection and rotation policy for future audits; an auditor for the 2009 CBI financial statements will be appointed before end-February 2010.
- The external auditor will also undertake special audits of (i) CBI Net International Reserves, and a full count of gold and foreign reserves held at the Central Bank, as of June 30, 2009, (ii) CBI data reported to the Fund, including, but not limited to, Net International Reserves, Net Domestic Assets, credit to government and a full count of gold and foreign reserves held at the Central Bank, as of December 31, 2009, December 31, 2010, December 31, 2011 and the other test dates during the SBA, and (iii) procedures surrounding government accounts at the CBI.

Progress has been made in moving toward accepting the obligations of Article VIII, Sections 2(a), 3, and 4, of the IMF’s Articles of Agreement. Iraq has worked with IMF staff to complete the review of exchange laws and regulations and are considering measures to remove the identified exchange restrictions on current international transactions. Iraq remains committed to avoid imposing any restrictions on the making of payments and transfers for current international transactions or introducing any multiple currency practices.

Iraq will continue efforts to resolve outstanding external claims under terms that are consistent with the 2004 Paris Club agreement. Bilateral agreements with twelve non- Paris Club official creditors have already been signed and are being implemented. Iraq will continue best efforts to reach bilateral debt agreements with the remaining non-Paris Club creditors. The United Arab Emirates has announced the full cancellation of Iraq’s debt, and implementation of a bilateral agreement with Greece is awaiting the Greek parliament’s approval. Debt reconciliation was completed with Morocco, Egypt, and China, and Iraq hopes to sign the relevant debt agreements, particularly with China with which an agreement has been initialed recently, in the near future. Regarding private creditors, most of the commercial debt has been restructured, and is serviced as agreed. Iraq also expects that the proceeds of the liquidation of the London branch of Rafidain Bank will be distributed to private claim holders by the end of the year.

Efforts will continue to improve Iraq’s statistical database. Monetary and balance of payments data are now being published in the IMF’s International Financial Statistics regularly, and annual national accounts data have been compiled up to 2007. Iraq will focus on improving the quality of these annual data developing quarterly national accounts data.

While the Socio-Economic Household Survey has been completed, the updating of the CPI weights has been delayed for a number of reasons. A new national coordinator for the General Data Dissemination System (GDDS) has been appointed. As of December 15, Iraq is participating in the GDDS and comprehensive information on Iraq’s statistical production and dissemination practices now appears on the IMF’s Dissemination Standards Bulletin Board.