But there has been tension between the Central Bank and the government for years. In January of last year, Nouri al-Maliki secured a court ruling placing the Central Bank under the control of the cabinet , rather than the parliament, much to the displeasure of al-Shabibi. The latest charges have been brought by Iraq's Commission on Integrity , whose former head resigned last year , alleging political interference in his inquiries.
Suspicions abound that the Central Bank affair is an attempt by al-Maliki to increase his control of the bank. While we wait for more details to emerge, the international business community will be watching developments closely. Iraq is a complicated environment, and Upper Quartile and AAIB are the ideal partners to guide your business through the complexities of Iraqi life. For more information please contact Gavin Jones or Adrian Shaw. Now that Maliki has removed another obstacle do you think this means that he raises the value of the currency any time soon?
This year perhaps? Maliki doesn't "raise" anything anymore than Obama "raises" the Dollar. It's not the job of the head of state to micro-manage the currency by dictating an artificial peg Communist Dictatorships like North Korea aside.
Reading between the lines, this is little more than a power struggle that will hardly help the average Iraqi or boost external confidence in Iraq's "post corruption" regime Dinar holders pull positive news out of the toilet.
Maliki wanted to get his hands on the FX reserves and use them to fund the budget. He tried to do it about a year ago and he backed off. He came up with a different strategy and this is it. If he goes through with this and spends the FX reserves the dinar will sink back to or more. So the new CBI head has spoken and said they will keep the same procedures in place. The same procedures that they said Shabibi put in place that caused the dinar value to fall, for which they removed him.
Iraq shows it is still one of the most corrupt countries in the world. Sadly, corruption is simply a way of life for these people. But don't worry. They will make everyone holding dinar millionaires.
Maliki has tunnel vision with his greed and power trip. The political parties who joined his alliance now despise him, his original opponents still despise him, it's game over and he's desperate. His interim replacement Abdul-Basit Turki, head of the state-spending watchdog the Board of Supreme Audit, was in place before Shabibi could return home. In recent years, Maliki has tightened his control over military, financial and intelligence institutions, forcing one top official, vice-president Tariq al-Hashimi, to flee the country after ill-defined terrorism charges.
To many observers, the allegations against Shabibi seem intentionally nebulous. The year-old is charged along with 15 other bank officials with supposed inconsistencies over foreign exchange auctions and improprieties over capital rules at local banks.
Turki is also seen as a competent technocrat with no obvious political affiliations or connections to Maliki. However, his appointment has been explained to no one and a shortlist of long-term successors has not been tendered. Many want to see an official promoted from within, although the scale of the Shabibi investigation might make that impossible. Citi analyst Farouk Soussa describes the hurried dismissal of Shabibi as a "worrying development" for central bank independence.
The move is likely to have a "significant inflationary impact" and erode confidence in the Iraqi dinar, he says. Inflation in Iraq rose 0.
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