Baghdad /NINA/ - The Governor of the Central Bank of Iraq, Dr. Ali Al-Alaq, affirmed that maintaining financial and banking stability, ensuring public financial sustainability, and curbing inflation are among the most difficult challenges facing countries. These cannot be achieved without activating various economic sectors, especially in light of global economic and financial complexities.
During a lecture on development financing in light of the global debt crisis, held on the sidelines of the Fifth Regional Conference of the Al-Baraka Forum for Islamic Economics, in Cairo in partnership with the General Secretariat of the League of Arab States, Al-Alaq explained that "the Iraqi landscape faces complex pressures and accumulated infrastructure and development challenges, necessitating economic diversification and maximizing public revenues." He pointed out that "Iraq's public finances rely on oil exports for over 90% of their revenue, an unconventional source subject to global price fluctuations, leading to revenue volatility and weak financial stability, which necessitates finding structural solutions."
He further explained that "the limited economic diversification and weak productive sectors have made Iraq a predominantly importing country, which places continuous pressure on the dollar and the exchange rate, especially with the rise in purchasing power and the increasing daily demand for foreign currency. This directly impacts monetary policy, which has achieved considerable success in balancing price stability, liquidity management, and economic stimulation."
He pointed out that "public spending pressures, particularly on salaries, subsidies, and basic services, pose an additional challenge," emphasizing "the difficulty of reducing these expenditures due to the potential social repercussions, at a time when the Central Bank is striving to avoid inflation and maintain monetary stability to protect the country's social fabric."
Al-Alaq noted that "Iraq has managed in recent years to finance part of the budget deficit by developing non-oil revenues, while continuing to coordinate with the Prime Minister to maximize these resources and reduce dependence on oil," in an effort to break what he described as the "financial dominance" of oil revenues over the general budget.
The Central Bank Governor affirmed that "exchange rate stability is a pivotal objective, as it provides a safe haven for investors and citizens," indicating that "Iraq has succeeded in increasing its foreign reserves and linking them to a comprehensive package of monetary policies, which has contributed to reducing the inflation rate to approximately 1%, one of the lowest levels recorded."
He added that "Iraq is in the process of reforming its banking sector," revealing that "an update is underway in cooperation between the Central Bank and an international company for a comprehensive reform plan. This plan includes revising bank licenses according to new terms and standards, which will strengthen the banking system and enhance its efficiency."
Regarding Islamic bonds (Sukuk), Al-Alaq explained that "there are currently no Islamic bond instruments in Iraq," noting that "the Central Bank has submitted a comprehensive draft law to the Iraqi Parliament for a vote, which will open new horizons for financing and investment."
On the issue of debt, Al-Alaq stressed "the necessity of establishing a structured and continuous international dialogue between creditors and debtors," calling for "the creation of a regional platform to organize this dialogue and bridge the gap between the two sides. This would ensure negotiations without significant losses and contribute to implementing reforms and strengthening the economic base with the support of participating countries."
He pointed to "international studies showing that losses in debt settlements can range between 20% and 25% as a result of poorly considered financing terms or delays," stressing that "negotiating platforms contribute to reducing these losses and strengthening international cooperation by improving debt terms, bridging the information gap, and exchanging expertise in economic reform processes."/ End
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During a lecture on development financing in light of the global debt crisis, held on the sidelines of the Fifth Regional Conference of the Al-Baraka Forum for Islamic Economics, in Cairo in partnership with the General Secretariat of the League of Arab States, Al-Alaq explained that "the Iraqi landscape faces complex pressures and accumulated infrastructure and development challenges, necessitating economic diversification and maximizing public revenues." He pointed out that "Iraq's public finances rely on oil exports for over 90% of their revenue, an unconventional source subject to global price fluctuations, leading to revenue volatility and weak financial stability, which necessitates finding structural solutions."
He further explained that "the limited economic diversification and weak productive sectors have made Iraq a predominantly importing country, which places continuous pressure on the dollar and the exchange rate, especially with the rise in purchasing power and the increasing daily demand for foreign currency. This directly impacts monetary policy, which has achieved considerable success in balancing price stability, liquidity management, and economic stimulation."
He pointed out that "public spending pressures, particularly on salaries, subsidies, and basic services, pose an additional challenge," emphasizing "the difficulty of reducing these expenditures due to the potential social repercussions, at a time when the Central Bank is striving to avoid inflation and maintain monetary stability to protect the country's social fabric."
Al-Alaq noted that "Iraq has managed in recent years to finance part of the budget deficit by developing non-oil revenues, while continuing to coordinate with the Prime Minister to maximize these resources and reduce dependence on oil," in an effort to break what he described as the "financial dominance" of oil revenues over the general budget.
The Central Bank Governor affirmed that "exchange rate stability is a pivotal objective, as it provides a safe haven for investors and citizens," indicating that "Iraq has succeeded in increasing its foreign reserves and linking them to a comprehensive package of monetary policies, which has contributed to reducing the inflation rate to approximately 1%, one of the lowest levels recorded."
He added that "Iraq is in the process of reforming its banking sector," revealing that "an update is underway in cooperation between the Central Bank and an international company for a comprehensive reform plan. This plan includes revising bank licenses according to new terms and standards, which will strengthen the banking system and enhance its efficiency."
Regarding Islamic bonds (Sukuk), Al-Alaq explained that "there are currently no Islamic bond instruments in Iraq," noting that "the Central Bank has submitted a comprehensive draft law to the Iraqi Parliament for a vote, which will open new horizons for financing and investment."
On the issue of debt, Al-Alaq stressed "the necessity of establishing a structured and continuous international dialogue between creditors and debtors," calling for "the creation of a regional platform to organize this dialogue and bridge the gap between the two sides. This would ensure negotiations without significant losses and contribute to implementing reforms and strengthening the economic base with the support of participating countries."
He pointed to "international studies showing that losses in debt settlements can range between 20% and 25% as a result of poorly considered financing terms or delays," stressing that "negotiating platforms contribute to reducing these losses and strengthening international cooperation by improving debt terms, bridging the information gap, and exchanging expertise in economic reform processes."/ End
ليصلك المزيد من الأخبار اشترك بقناتنا على التليغرام
