Baghdad: The Central Bank of Iraq confirmed on Sunday that printing currency is legally prohibited and does not reflect the nature of current operations. It also clarified that there is an essential and important difference between discounting treasury bills and printing currency, both technically and economically.

According to Iraqi News Agency, the bank stated that there is a fundamental difference between 'discounting treasury bills' and 'printing currency'. Discounting bills provides temporary financial liquidity against an existing government debt instrument, which is repaid upon maturity. This mechanism is internationally recognized and practiced by major central banks, adhering strictly to maturity dates.

The bank explained that printing currency involves issuing new money without backing, which is injected directly into the economy. This leads to inflation and erosion of currency value and is not reclaimed, representing a permanent monetary burden. This practice is strictly prohibited under the Central Bank of Iraq Law No. (56) of 2004. The bank emphasized that the simplistic description of current operations as 'printing currency' does not reflect their true technical and financial nature.

The Central Bank of Iraq emphasized its primary role in managing monetary policy, maintaining monetary and price stability, and ensuring the integrity of the financial system. It clarified that financial and monetary tools are used in exceptional circumstances in a controlled manner, ensuring that financial pressures do not evolve into permanent monetary expansion or inflationary pressures affecting citizens' purchasing power.

The bank stressed that monetary management is conducted with precise and rigorous controls within the framework of the law. The effects of any operations are continuously evaluated to ensure they do not negatively impact established monetary policy objectives.

The bank highlighted the importance of adopting long-term fiscal policies aimed at building sufficient financial buffers and safety margins to withstand economic shocks and unsteady oil cycles. This includes diversifying the economy and revenue sources, and managing public debt efficiently to minimize the impact of future crises and maintain overall economic stability.