Shafaq News/ On Wednesday, MudherMuhammad Saleh, the Iraqi Prime Minister's financial advisor, explained why goldreserves are lower compared to other hard currencies.
In an interview with Shafaq News,Saleh explained, "Some countries still rely solely on gold as part oftheir monetary reserves, while the focus today is on assets that can be quicklyconverted into productive assets with long-term returns."
Countries have shifted away fromusing gold as a primary reserve asset in monetary reserves due to internationaleconomic developments and changes in financial systems. “Key reasons includegold's low returns compared to other assets, such as investing in deposits orgovernment bonds with very high credit ratings, which are low-risk, unlikegold, which does not provide stable returns like government bonds,” heclarified.
“Most countries prefer assets thatgenerate stable, fixed income, such as US or European treasury bonds, whichoffer real annual interest…Additionally, gold is less liquid during crises comparedto financial assets like foreign currencies and bonds,” Saleh continued.
He further confirmed, "SinceWorld War II, changes in the global financial system have led most countries torely on the US dollar as their primary reserve, due to its widespread use ininternational transactions.”
Notably, Iraq holds foreign currencyreserves of approximately $100 billion. It is 29th globally out of 100 nationswith significant gold holdings, following Saudi Arabia and Lebanon in the Arabregion. Iraq’s current reserves, now standing at 152.6 tons, account forapproximately 11.5% of its overall foreign reserves.