Governor of Central Bank: the current exchange rate appropriately and we have the ability to defend him
March 1, 2010 · Posted in NEWS

Central Bank Governor Sinan Al-Shabibi on Monday that the current exchange rate of $ 1170 dinars per dollar is appropriate, and able to defend what we possess foreign cash reserves, noting that adopts a policy of floating the central orbit to determine the exchange rate.

The Shabibi told (Voices of Iraq) that the Central Bank of Iraq “Itnebeny policy of floating the exchange rate is called the orbit, and through which the exchange rate is determined manner, and take decisions on the change in proportion to the issues of fighting against inflation, which is considered most importantly,” noting that the central ” does not want to take action disrupts the stability of the current market, such as reducing the price it produces a great demand for cash and other decisions. ”

The current exchange rate basis, which amounts to 1170 dinars per dollar Shabibi said he was “a good, stable and can defend Bahtiattiyatna big swallow 43 billion dollars now,” noting that the defense comes from the rate seen by the fact that the central “balanced now and we should not adopt the price does not appreciate the defense about it, but there may be economic variables related to the size of the precautions that may be less, for example Venmay to change it. ”

Dependent central bank in its monetary policy on the quantity theory of money and that which tries to control the rate of inflation in Iraq by withdrawing liquidity, raising interest rates, bringing the price to more than 20% during the year 20,072,008, but he decided to lower the interest rate gradually until it reached to 7% today, also adopted the Central Bank to sell dollars in the auction, which runs for five sessions per week in an effort to impose stability at the Iraqi currency against foreign currencies, which calls for things many economists to change.

In the question of the Agency (Voices of Iraq) about the possibility of changing the current monetary policy Shabibi explained that “monetary policy is not where many of the planning in many cases, they try to be a policy to correct the situation created by the economy, if there is a kind of dislocation and instability of prices,” where enter the Central time to “correct the situation dealing short-term policy because it does not deal with long-or medium-policy.”

Shabibi noted that “the central bank to cut interest rates is not considered a change of monetary policy because it has the criteria followed by observation of the evolution of inflation,” citing the example of “interfering in the event of an imbalance in the work of the government and the private sector which is increasing rates of inflation, the central Videchl by variable destruction which is not owned by anyone else is liquidity, and because he owns this variable, it fights inflation by way Verwaha and reduce it and that affects the way the economy. “