Shabibi: About the CBI’s decision to sell gold to dealers

Posted: February 9, 2014 in Iraqi Dinar/Politics

Under the statement issued by the Central Bank of Iraq and for the purpose of diversification means savings to the public and to provide large quantities of gold from the origins of prudent central bank will CREATION ingots of pure gold and we would like to comment on this subject, including the following:

that the central bank handles gold cash (which is gold held by central banks ) and not the gold trade (which is handled by the market). The main objective of central banks from owning gold is to strengthen and diversify cash reserves and add an element of confidence to this reserve. Has resorted to the old administration in August 2012. It is not the duty of the Central Bank that provides gold trade to the public, but it is possible that the basic coins.

commemorative (about Iraq’s history or the history of the central bank) and sold and are pulling some cash Iraqi through it and some officials who are still in the bank remember the communication of the many that we have had with Some companies discreet Mint commemorative coins. In this area only narrow the central bank to sell gold and pulls part of Iraqi money which may fall within the monetary policy.

But this process is not characterized by regular Bastmrraritha can not imagine having any role in the reduction of inflation, a primary goal of monetary policy.

The foreign currency auction draws a lot of Iraqi dinars from the public and can not, for reasons both theoretical and practical, that the monetary gold in place of the dollar auction. The use of cash as a policy of monetary gold is a process characterized by limited Bmahdodiha The offer does not include the trading and swap confined between central banks. But if the goal is to use gold as a way to save there is no need for the central bank in this regard, because the topic comes gold trade. Because of this, the monetary gold is not used, but rarely as a policy cash but, of course, is a cover important currency and therefore contributes to the stability of the monetary policy, which depends on the ratio of monetary gold to total reserves.

either if the purpose is business policy or to encourage saving it does not fall within the scope of the work of the central bank and are dealing here with the gold as a commodity rather than a normal monetary gold. This gold is traded in the commercial market and is therefore either be consumed or spared no need for the central bank to come in this area. And must not be given the impression that the central bank is equipped for gold trade. Gold trade deals with ordinary commodity traders or the Ministry of Commerce and part of the monetary gold reserve currency, which is owned and managed by the central bank.

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