A sound national currency backed up by central bank reserves. The Office of Reconstruction and Humanitarian Assistance (ORHA) has announced that transactions can be conducted in any of three currencies: the existing Iraqi dinar; the so-called Swiss dinar, featuring pictures of previous rulers; and the dollar. The US Treasury believes an estimated $500 million worth of dollars is in circulation. The Treasury plans to use $1,700 billion in Iraqi funds frozen in bank accounts in the US as reserves;

Establish the legal basis for financial transactions;

Decontrol prices;

Prepare a national budget;

Create a financial system with a central bank;

Secure international financial support; and

Organise a conference for donors to Iraqi reconstruction.

‘The Iraqi people are clearly going to need some relief,’ McPherson told reporters with reference to international debts. ‘How it’s negotiated is a very complicated process.’ Three US Treasury officials arrived in Baghdad in April to vet financial workers for those with unacceptable ties to the previous government, McPherson added.

McPherson has been president of Michigan State University since 1993. He was previously deputy secretary of the Treasury Department. He is co-chairman of the Partnership to Cut Hunger in Africa and was appointed by President Bush to chair the board of the Rome-based International Food & Agriculture Development. In addition, McPherson chairs the advisory board to the Energy Secretary and is a director of Dow Jones & Company, publisher of the Wall Street Journal.

Appointed as deputy financial co-ordinator at the same time was George Wolfe, deputy general counsel in the Treasury Department since July 2001. Wolfe served in the early 1990s as a member of the investment policy advisory committee, the principal private sector body advising the US Trade Representative.