Sinan Al-Shabibi interview: A battle against inflation and instability

Sudip Roy

September 24, 2007

Sinan Al-Shabibi, governor of the Central Bank of Iraq, speaks to Sudip Roy about the bank’s efforts to control inflation, curb exchange rate instability and cope with the difficult security situation.

"People cannot go to a bank and deposit a lot of cash. If there was security, then the banks would see more flows and they would be able to lend more easily to all sectors of the economy"
Sinan Al-Shabibi, central bank governor of Iraq

Even though economic growth is at about 6.3%, Iraq needs a much higher rate. How can you kick-start the economy given the level of violence? It is of course difficult. There is a lot of instability and insecurity. But I would say that the government is trying its best to attain and maintain a good rate of growth.

How is monetary policy determined? Do you have a committee? Do you consult members of the government?

The central bank is completely independent from the government. We have a board and we have various committees at the bank, which are at a lower level than the board. The board, though, ratifies any change in the direction of interest rates or exchange rates, which are discussed and decided by the consultative banking committee.

Who sits on that committee?

All of the bank’s director generals and the two deputy governors.