The Iraqi Central Bank Consultant stated to Aswat Al Iraq about the new instructions will be effective from Sunday, the mandatory standardization of cash reserve ratio in government and private banks in the same ratio.
Dr. Modhir Mohamed Saleh, told the Independent News Agency (Voices of Iraq), that there was a "new instructions issued by the Central Bank of Iraq apply to all banks, starting from (Sunday), and provides for the Standardization of the compulsory reserve rate (25%) of all bank deposits , Whether governmental or civil deposits. "
He explained that the figure "will be distributed by (5%) will be kept in cash in the coffers of these banks, and the (20%) remaining deposited in their accounts with the Central Bank of Iraq, and are treated in accordance with the mechanisms and regulations currently applied in this regard."
Saleh pointed out that the compulsory reserve "for the governmental banks (75%), which was considered by those banks that affect the performance and limit the expansion in granting credit, which made the Central Bank to unify the compulsory reserve ratio for the private banks of the original (25% ) Only. "
The Consultant of the Central Bank of Iraq added "the new instructions not to be used surpluses of bank deposits resulting from the government exclusively, investment in deposit accounts for facilitation, or remittances CBE, or use for the purpose of public financing debt through participation in Treasury auction remittances, as it prevents cross-loan lending between banks. "
He added " and to allow (banking surpluses) to go to invest about all forms of bank credit."
D. Madhar Saleh said this procedure "designed to make the government deposits with banks geared towards the granting of loans and bank transaction, and not proceed for returning good profits only without having a role in the economic process."
The instruction "allowed banks to invest all surpluses in the banking tools of Central Bank of Iraq and remittances Treasury, and any other tools available, with the exception of surpluses arising from bank deposits, government, a rate not exceeding (35%) of the total surpluses resulting from public deposits only."
Saleh said that these instructions "aimed to motivate banks to market orientation, and to assign monetary policy trends in the provision of credit and bank financing required by the local state, and address the unemployment and economic stagnation, and continuing to face the inflation and price signals adopted by Central Bank to target inflation and achieving a unified framework of stability and economic growth desired. "