Interview with Al-Shabibi - discusses Exchange Rate, Currency, 'deleting zero's' and the economy
Dr. Shabibi: It is not the duty of the central bank lending .. and the foreign exchange reserves amounted to 48 billion dollars

Spent a long time trapped in the economic and development policies in the United Nations organizations, quiet nature, a few remarks media, after gaining in 2003 the pyramid of the Central Bank of Iraq, and the formulation of monetary policy, which were fraught with obstacles and objections of some tough and cruel. To date for our very, Oguetnsna opportunity to meet Dr. Shabibi Governor Central Bank of Iraq and was with him the following interview:

There are a lot of criticism directed to the Central Bank and in particular with regard to the sale of the dollar auction, for example, Minister of Planning and Development Cooperation Ali Baban, this auction is for the smuggling of foreign currency out of Iraq is your response?

- There is no absorption of the concept of free economy, which criticizes our methodology Can he bear the appearance of other exchange rates, if the head to prevent the transmission of money, they will show a different price because there is a need for the dollar rate has shown a third show here, we have a multiplicity of exchange rates in this case the Government can not to plan their programs because the exchange rate is all the goods can not all sectors have to calculate import cost and production cost accurately because it has different rates of exchange, and the issue of allowing for the movement of capital is to balance the market so that there is a demand-side, and you control the process of causing the balance of the market according to price There is no specific and the smuggling of money because the banks and their customers within the auction, provided that sufficient information to either the Central Bank of the claim of the Ministry of Planning, which has pride and this should provide a thorough analysis of the accounts and how much is the rates of smuggling, which we're sitting by the Ministry of Planning is not the former things must be said, but accurately.

There is a demand for the currency and it should meet this request 100%, if I were met 90% of the demand there is a 10% may be provided by other markets Will accept the Ministry of Planning or the government to show different rates of the dinar, how to plan and how the costs could be calculated and the case is not an issue media because it is purely scientific result of the balance between supply and demand and this important factor.

Central Bank says that through its monetary policy was able to rein in inflation in the control of Iraq by the U.S. dollar exchange rate, but economists say that inflation in Iraq is not inflation, but monetary inflation Rcude?

- The main objective is that we created a market where the exchange rate stable, and there may be stagnation in the market, which is also a need to audit, but the issue is that the march of inflation Altdhm and not in the case of static, the march of inflation two years ago the total was 65% and inflation was 40% partial, but dropped to 7% and inflation is not high now, the existing measures in developing countries, many countries have stable inflation 14%, while inflation was on the stasis which is the real productive sectors of industry, services and agriculture sectors, and not the cash to take advantage of the opportunity to exchange rate stability and knowledge of the cost in the exchange rate, We now know that we can cost and the cost of foreign currency exchange rate and the cost of the contribution of the exchange rate at the cost of production as long as stable, we can predict, but when the exchange rate stable, how can the Government to plan, and the case is in fact a result of volatility in the prices of non-coverage each market when foreign currency is sold for 90% or 80% and not 100% there will be fluctuation in the exchange rates will create a kind of uncertainty will therefore be difficult from the planning process and this is what we want.

Some people say that the central bank does not contribute to the productive process, but we believe that the largest contribution to the productive process is to create a stable environment can be predicted that the scheme through a stable environment and if they do not consider this contribution to the national economy, production and planning do not know how that could be contributing.?

Inflation stasis to all ministries including the Ministry of Planning addressed because all the available stability and economic stability, I mean, not political, but the failure of the other comment that we reap in itself because we provided the breeding ground for the work If there is no production, this surely we are not.

What is the extent of the seriousness of dealing in two currencies on the national economy, and now we are dealing in two currencies in Iraq, why is not the Iraqi dinar is the currency only deal?

The official currency is the dinar in Iraq and we do not have any other currency but the people have accepted that if the dinar is Baldolarao to replace any other currency, there is no problem, but if he refuses to deal dinars by the people of the danger of this thing, either with regard to trade, the process mean, the import and export international treatment of the dollar, most traders Istbdlon dinar from the dollar to trade, does the dollar value of the stock after the decline in global markets is no longer undistributed well, and now the Iraqi dinar is good for the value of inventories after the stability is better than the dollar.

Central Bank has recently reduced the interest rate for more than three times, the objective of this reduction?

- The central bank to deal with developments after the fall in levels of inflation the central bank cut the interest rate and monetary policy conditions have become less and we are leaving the banks to determine interest rates on lending and borrowing, and we define the interest rate in the light of inflation, which should be higher than inflation, and lower inflation, reduce our interest rates and we need to change the level of inflation after a month or two months to monitor the level of inflation to reduce interest rates after the monetary policy is generally a short-term planning for the SEPT policy interest rates, for example, price is not the tax, interest rates are cut every day and there are interest rates change every day, so We are changing the interest rate is calculated every time the inflation, but we see inflation before May because of external things, more than an internal?.

raised by some political and economic circles, the idea of borrowing from the Central Bank is the international monetary reserves, the extent appropriate, these calls for the importance of cash reserves?
Eight Ministry of Electricity and complained of a lack of central bank lending to the ministry to solve the problem of electricity, so the ministry has resorted to borrowing from foreign banks?

The Bank does not lend, it is not the duty of the central bank lending for development projects or because the productivity of the central bank lending to banks and short-term in the state banks may have no problem saving, but also the short-term lending and should be back these loans quickly, read the agent's oldest Ra'ad Goalkeeper and the Central Bank has provided a favorable environment for the Ministry to improve its resources and the problem of the ministry on its way to the solution, the central bank has arranged to borrow the government (Ministry of Finance) of the banks and the banks, the transfer of the proceeds from lending to foreign currency, the government borrowed from commercial banks (Bank of Iraq) and the proceeds from borrowing by the central bank will convert the foreign currency lending to go to the two LG Smenz and has facilitated the process of obtaining the Central Bank of the Ministry of Electricity to the resources they need, but borrowing from the central bank directly because it is forbidden by law is prohibited and economically because it means the government will adopt the central bank and reserve, which must be used to stabilize the exchange rate.

What is the size of reserves of the Central Bank?

Reserve of about 43 billion and is changed daily, as a result of the auction process, which is now selling only, and that the Government has the resources of oil in foreign currency they need to turn these resources to the Iraqi dinar to pay salaries and we are producers of the coin, we sell them to the Iraqi currency and the reserve located in the central bank does not cover the deficit in the budget of the government because it is not a resource for government, and our reserves can act only to achieve a balance in the private sector when it bought the dollar on the auction through the presence of a stabilizing currency and inflation rates and I hope that the Muslim Brotherhood in the government understand the usefulness of this thing.

But with this there complain that you Targulwn a lot of projects, for example, complained of the governor of Anbar province, you said you refuse to enter a guarantor between the governorate and the foreign investors, and general manager of Bank of Iraq said that you Arq*** a housing project by the bank?

Now the central bank's new duties are different from the previous era, In the past, the central bank is the guarantor, and now the Central Bank is no longer a guarantor of housing projects there is a difference between housing projects, which include officials from the State or which are for the general public and the productivity of these projects are not related to us and this is It is the duty of the Land Bank, and our duty is to put the interest rate and stable exchange and try to keep prices low and increase.

rising calls from the banking sector to support the appropriate regulations issued by the Central Bank of Iraq to organize its work, the validity of this?

- This requires a long discussion with the private banks and these regulations need to be amended, without a doubt, private banks, but they have great opportunities, because their very high during the fight against inflation after the deposit of 20% in the Central Bank and after that have a lot of profit they have to contribute to the process A***anip These regulations are not an obstacle, and that they must display some courage to work without a no-risk, and we hope that the contributions of these banks in all sectors, the private banking sector in the process of evolution, but the interaction between fiscal and monetary policy and to give them the financial opportunities in the opening credits and must be These short-term targets because the government for more than sixty years is one of the projects A***anip and the private sector was far from this project, but would only develop through the provision of assistance to him, but even in the Constitution emphasizes the development of the work of the private sector.

What is the role of the central bank to resolve Iraq's debt, how much of the remainder of this debt?

- The central bank and the Ministry of Finance, which are negotiated by both debt and finance were the foundation of religion as it was our role as adviser and the debt issue is very important because the survival of a strain on the balance of payments and currency and create a need for foreign currency, is in the interest of the Central Bank has reduced the debt fight 80% of the debt and the Gulf states have remained the exception of the UAE, which has reduced its debt and the remaining 50 billion is now after the 140 billion dollars.

However, with this effort has been made to reduce the debt on Iraq, there are calls for borrowing to meet the Government's budget deficit?

Formed in Iraq is not a debt due to borrowing, but borrowing was not considered because of the war did not calculate the payment of interest did not accumulate, and when we want to borrow, borrow All the world .. We have to negotiate and create the necessary conditions for the payment of such borrowing and to examine the balance of payments and how that can happen in the balance of the surplus and how we can Novrmn for the payment of debt.

But now borrowing to consumer spending?

- I agree with you that the borrowing must be for investment only, the reputation of the borrowing to investment spending, but such borrowing should have several conditions, including that close to our calculated by borrowing to generate and negotiate the loan and the repayment process of debt negotiations and advanced in the world and even after the end of the borrowing that we can negotiate for the rescheduling of this debt, in the case of the availability of all of these conditions do not harm borrowing.

What is the status of the negotiations, the Central Bank and the Ministry of Finance with the International Monetary Fund? Is there any periodic reviews? The nature of these negotiations?

- We got to the very advanced stages has been debated recently in the technical issues required by the Ministry of Finance and the Central Bank, and negotiations are in the ninth month in a stage of decision-making.

Do you expect the Iraqi dinar exchange rate of increase in the stability of its value after the?

- This question I can not answer it, because I am not a researcher in this area so I can Ajipk to this question, and the answer might affect the market.

What about the deletion of zeros from the currency, where this project?

- Is a project in mind it is a very important need for resources and a large table and that is what is lacking now, we do not have adequate staffing, which handles these cases as a result of the presence of many of the issues that we deal with them, including research and the relationship with the International Monetary Fund and the relationship with the government, which is important very.

Do you have faith in the issuance of large segments of the currency?

- This project is also in the mind, but there are a lot of priorities and we are waiting how things evolve?

But first delete the zeroes or the issuance of the currencies of large groups?

When deleting a logical zeroes may not need to issue a currency with the largest zeros, we have the research and studies in this area but what we need are the resources and capabilities necessary to complete this.