Tuesday, January 8th 04:50 PM IST

Gold is first shelter for countries like Iraq

# Iraq gold reserves  # Gold exchange  # Dawlat al-Kanoun  

Iraq is probably the country that is most in need of a great deal of gold reserves given its succession of political and economic crises.

BAGHDAD(BullionStreet): War torn Iraq considering gold as one of the first shelter in times of crisis, according to a parliament committee led by country's prime minister Nouri al-Maliki.

The Dawlat al-Kanoun parliamentary bloc said gold is the most stable component of official reserves. It will result in the stability and possibly the improvement of dinar exchange rates.

The Iraqi dinar exchange rate is based on the amount of cash reserves, which include not only money but gold as well.

Iraq’s gold holdings quadrupled to 31 tons, the first time something like this has happened in years.

The value of gold as a strategic reserve has grown over the past few years due to the continued instability of the dollar exchange rate.

International banks perceive gold as having long-lasting value that is not affected by rapid economic development.

Gold can be used to compensate for insufficient cash reserves in the wake of political or economic crisis.

In that context, Iraq is probably the country that is most in need of a great deal of gold reserves given its succession of political and economic crises.

Since 2003, Iraq has had an insignificant cash reserve. Some sources state that those who were in charge of the Iraqi economy during the first months following Saddam Hussein's toppling converted a ton of gold, which was the only reserve held by the central bank, into cash.

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