Did you hear what the Central Bank of Iraq (CBI) announced today?
They will be supporting the down economy by injecting money into it. The CBI has announced that they will give 5 trillion dinars to specialized banks. The specialized Iraq banks will provide loans to commercial projects to ramp up the economy. The loans will also be for other sectors like agriculture, real estate loans and providing housing for displaced persons. The loans would promote jobs in the country and lower the unemployment. The CBI is also loaning the Iraq government 6 trillion dinars to help with the state 2015 budget.
The CBI has decided to purchase Treasury Bonds from the secondary market (investors) in the amount of 5 trillion dinars. The purchasing of the Treasury bonds will keep the CBI reserves close to what it is today.
The Iraq government still has not finalized 2015 federal budget and were still in negotiations. The CBI helped the government in moving closer to finalizing the 2015 budget.
When the CBI is buying Treasury bonds, this action is clearly adding money supply to the country. The CBI has not removed any currency from circulation. You can read my post about the verified by Iraqi dinar redenomination. I provide actual CBI documents from the CBI website that the money supply has increased over the last several years.
If the CBI wanted to decrease the money supply, it would sell the bonds from its accounts and not purchase the bonds from the secondary market. The secondary market is individual investors in Iraq and possibly around the world. In this case, the CBI is increasing the money supply by purchasing the Treasury bonds.
Update on the delete the zero’s project. It is still on schedule for the first quarter of 2016 if the CBI can regain control of its banks. If the Islamic State is in control of the banks in the provinces, then the delete the zero’s project will be postponed.
Iraqi Dinar Revaluation
Iraqi Dinar Redenomination
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