Order 18: Measures to Ensure the Independence of the Central Bank of Iraq

by L. Paul Bremer, Coalition Provisional Authority

COALITION PROVISIONAL AUTHORITY ORDER NUMBER 18


MEASURES TO ENSURE THE INDEPENDENCE
OF THE CENTRAL BANK OF IRAQ


Pursuant to my authority as Administrator of the Coalition Provisional Authority (CPA),
and under the laws and usages of war, and consistent with relevant U.N. Security Council
resolutions, including Resolution 1483 (2003),

Noting the Central Bank of Iraq Law sets forth requirements for the involvement of the
Ministry of Finance in setting monetary and credit policy,

Noting that the Central Bank of Iraq Law authorizes loans to government Ministries
which undermines the ability of the Central Bank of Iraq (CBI) to control monetary
growth,

Understanding that CBI' s credit and monetary policy must be free from political or other
governmental interference,

Determined to prevent the impoverishment of the Iraqi people and the breakdown of
order by taking measures for the prevention of extreme inflation,

I hereby promulgate the following:

Section 1
Loans to Government Ministries


Articles 21 and 22 of the Central Bank of Iraq Law No. 64 of 1976 are hereby
suspended to the extent that they authorize the CBI to loan funds to Iraqi Government
Ministries.

Section 2
Central Bank Control of Monetary and Credit Policy


The CBI shall have the authority to determine and implement monetary and credit
policy without the approval of the Ministry of Finance. The provisions of Article 14
of the Central Bank Law are suspended to the extent that they require Ministry of
Finance approval of monetary and credit policy. Only members of the CBI Board
who are CBI employees serving with the approval of the Administrator may decide
matters determining or implementing monetary and credit policy.

CPA/ORD/07 July 2003/18