The Central Bank of Iraq has pushed back against claims that its treasury bill discounting operations are the same as printing money, stressing that the two are completely different.
In a statement, the bank explained that discounting treasury bills is a temporary way of providing liquidity based on existing government debt. The money is later recovered when the bills reach maturity. According to the Central Bank, this is a common financial tool used by central banks around the world and should not be confused with printing new currency.
The bank said that printing money means creating new cash without proper backing and injecting it directly into the economy, a process that can lead to inflation and weaken the value of the currency. It noted that such practices are prohibited under Iraqi law.
The Central Bank reaffirmed that its main responsibility is to protect monetary and financial stability, maintain price stability, and safeguard the country’s financial system. It emphasized that it is not meant to serve as a permanent source of funding for government spending.
The statement added that any use of financial tools during exceptional circumstances is carried out carefully and in line with the needs of the economy. The bank said it takes steps to ensure that short-term financial pressures do not turn into long-term inflation or reduce citizens’ purchasing power.
The Central Bank also urged media organizations to report accurately on issues related to the Iraqi dinar, monetary policy, and currency management. It stressed that all currency-related operations are carried out daily with the goal of maintaining economic and financial stability.
The statement concluded by highlighting the need for long-term economic planning. The bank called for stronger financial reserves, greater economic diversification, broader sources of government revenue, and better public debt management to help Iraq withstand future economic shocks and fluctuations in oil prices. Dinars
