Full transcript
0:09My name is
0:11John from Arlington, Virginia.
0:14With respect to the ongoing need for
0:17stability in Iraq and its exchange rate,
0:20would it not follow that there's a
0:22direct need for a potential revaluation
0:25of the currency to induce both domestic
0:27and foreign investment in Iraq? And with
0:30regard to that, how far do you believe
0:32that we are from a potential revaluation
0:34of the Iraqi currency?
0:37Well, even if I know the answer, I
0:39cannot tell
0:42you. But the thing is no. I think the
0:45question is all you cannot have an
0:48economist saying without the answer it
0:51depends you know. So the question here
0:55is actually a revaluation
0:58will which really is going to depend on
1:01on
1:04on to what extent we are we are going to
1:08continue
1:12uh let us
1:16say controlling inflation as you know I
1:19don't know if you go to the to the
1:22central bank law you See in the website
1:26you will see the first objective is
1:28maintaining price
1:30stability. So uh there is a little bit
1:34of
1:35inflation in Iraq. I mean is now it used
1:39to be 2% or 3% now it's about 5%. But we
1:42are watching that very carefully.
1:46uh if this inflation continues we will
1:50have to
1:52revisit it's more revisit more than
1:54revisiting I cannot say we are going to
1:58revisit the question of exchange rate
2:00because I
2:03mean revaluation I mean depends on
2:06inflation of course I mean you know
2:11u the other factors that determine the
2:14movement
2:16currencies are a lot. I mean some kind
2:18of we look at
2:20trade I mean exports and imports and all
2:23your your all your obligations and then
2:27the balance of payment and all these
2:28things. Definitely no doubt you you look
2:32at those but
2:34uh
2:37those are problems relating with the
2:41more with with the with the development
2:44part of the economy. The question of
2:48maintaining a price stability is really
2:51something you you see the inflation and
2:53all these things because nobody else in
2:56the economy is concerned with
2:58inflation. I mean the government when it
3:01put its
3:04budget I mean the government is spender
3:07and the central bank is
3:09saver. So
3:13they it's not very important for them to
3:16mention and to concentrate on on on
3:18inflation. So actually the question here
3:21that we are going to track and follow
3:24the development in inflation first and
3:28of course other factors which I
3:30mentioned second and then we we will
3:33determine our exchange rate movement.
3:41Thank you, Governor. Uh, this may be the
3:43same question, so I can understand if
3:46you can't answer it, but I've heard a
3:48report that have your name, please. Oh,
3:49my name is Bob Kelly. I am an investor
3:51in Iraq, the Summit Hotel in the
3:54International Zone with the OPIC
3:56financing. But we we've heard I've heard
3:59a report that just in the last couple of
4:01days that Iraq is about to cut three
4:04zeros off of the currency and that they
4:07call that redenomination. That may be
4:10the same question that you just
4:11received, but I wondered if you had any
4:13information about that.
4:16Well, I mean, I don't know whether it's
4:18the same question. I think this cutting
4:20three zeros is uh
4:26is it has of
4:29course shouldn't be exaggerated actually
4:31the problem I mean the question is just
4:34redomination and uh I mean people of
4:37course you see a lot of people that uh
4:41writing a lot of articles in the in the
4:43newspapers I mean criticizing the
4:46central bank that is going to the the
4:49the value of the Iraqi dinner is going
4:53to depreciate or something all kind of
4:55talk. I mean this is a question just
4:58actually to facilitate payment,
5:00facilitate actually ease of counting and
5:04all these things and of course I mean
5:06when you see now a lot of figures I mean
5:09you see trillions or or huge figures
5:14actually when if you want I mean if you
5:16want to be precise you put about 12
5:18figures or for 15 figures and all these
5:20things 15 digits or or something. So I
5:24think I think we have a plan on that and
5:28uh you remember uh why the there was no
5:33actually a government decree to have to
5:36add these zeros. They happened actually
5:40because of the course of development of
5:42the economy at the beginning of the 80s.
5:45I mean just inflation was very
5:47high inflation in inflation was rampant
5:51and therefore I mean small small notes
5:55and these things were actually not
5:57started not to be used on these things.
6:02So government started to add the three
6:06zeros and these things and at the
6:09time and of course
6:13uh conditions are different
6:16now inflation under
6:18control exchange rate on is managed by
6:21the central bank. All these
6:24things when you had actually the zeros
6:27you could not manage not of course
6:29because of the fault of the government
6:31or the central bank which I think there
6:33was but I think the question is that
6:35because there were a lot of exogenous
6:39factors I mean we're not saying that we
6:41are champions now I mean there were
6:43actually a lot of external factors which
6:46affected actually the behavior of all
6:50economic stakeholders and Therefore,
6:53actually a lot of people didn't know
6:55actually what to do. They have started
6:57to add three zeros and all these things.
6:59So now actually the situation is
7:01completely different from that time. You
7:05had a high inflation, you have now a low
7:08inflation. You had actually something
7:10which is a stable macroeconomic
7:14situation. I mean at the time actually
7:16the situation was not stable.
7:20So the only way to combat all of these
7:23things at the time is to increase the
7:27denomination and put three zeros. I
7:29think I think
7:31uh to bring back the Iraqi dinar where
7:36actually three zeros are removed and of
7:39course you will have to this will have
7:41gone hand in hand with monitoring of the
7:43exchange rate and all these things and
7:46and and and you will see I think now it
7:49is it is
7:51probably I mean we are we are studying
7:55that not studying we have decided
7:57actually on that but when when to
7:58implement that to remove all these three
8:01zeros is is very soon. But of course,
8:04this requires not only the central bank
8:07activity. This it requires because I
8:09mean it's something you have to make a
8:12lot of
8:17propagu advertisement campaign and all
8:20these things. And you have of course to
8:23go probably some a campaign to to
8:28to educate a lot of people these things.
8:32So I think I think it needs a lot
8:35of help from the government from many
8:38people in the government especially the
8:40security forces and we hope that
8:43security forces become less busy with
8:47with the violence issue so that they can
8:49devote time for us.