Thread: Iraq/Dinar News. 09/05 to 01/14/07

Money
Published: 10/28/2006 12:00 AM (UAE)

Appreciating the currency peg
By Arif Sharif, Staff Reporter


Speculation was rife last week about a revaluation of the Saudi riyal after it climbed through 3.75 to a dollar, a historically rare occurrence.

Some credibility was attached to the speculation since Kuwait had allowed the dinar to appreciate against the dollar in May.

At the end of it all it didn't really happen. The Saudi central bank governor was quoted as saying the country did not really have the freedom to revalue its currency without consulting other countries in the GCC.

The six GCC countries are committed to moving together on currency reforms and achieving a monetary union by 2010.

More than the revaluation itself, the speculation raised questions about the wisdom of following a fixed exchange rate policy.

All the GCC countries have followed the currency peg for years, and most people in the UAE think that the policy has served the country well.

Oil, the GCC's main export, is priced in dollars and a very substantial part of these countries' imports are also from the US and in dollars.

The fact that dirham is pegged to the dollar reduces uncertainty for business and does away with the need to hedge against currency movements.

On the flip side, the dirham peg leads to a loss in the central bank's freedom in setting its monetary policy targets. Besides, a weakening of the dollar versus other currencies could also lead to substantial imported inflation.

Speculation

There has also been some speculation about whether the common currency, which will come into being in 2010, will be allowed to float. But that has been quashed as well.

The common currency is also expected to be pegged to the dollar, though a loosening could possibly come about in 2015, according to the UAE central bank governor. Surprisingly, the IMF, usually a great champion of floating exchange rates, is ambivalent about whether the GCC countries should do away with the dollar peg. Mohsin Khan, regional director for the Fund, said there were advantages and disadvantages to the dollar peg and it wasn't clear if one outweighed the other.

Consensus the world over is pretty much shifting to the dollar declining, considering the huge US current account deficit.

Several countries over the past few years have reduced the dollar component of their reserves in favour of the euro.

Sticking to the dollar peg in this situation will probably result in importing inflation.

Even the IMF admits that the dollar peg has led to inflation in an environment of rising capital inflows.

In many countries, foreign exchange inflows have boosted credit and money growth substantially, pushing up both consumer and asset prices, it said in its regional economic outlook published in September.

In countries with institutional commitments to pegged exchange rates, the necessary appreciation in real exchange rates will have to come through higher prices.

Gulfnews: Appreciating the currency peg

äÕ ÈíÇä ÑÓãí Íæá ãÈÇÍËÇÊ ÈæÔ æÇáãÇáßí

The text of an official statement on the talks Bush and Maliki
2006-10-28 7:00:55 PM

The name of God the Merciful
The Republic of Iraq

Prime minister
Media Bureau
Saturday, 28 / 10 / 2006

The joint statement of the consultations held between the Prime Minister, Mr. Nouri Al-Maliki, the American President, Mr. George Bush afternoon today, Saturday, 28 / 10 / 2006 via a video

we were pleased to continue our consultations today, We have discussed through a video security series of very important issues concerning the achievement of our common objectives in Iraq, The consultations involved the development of Iraqi security forces and efforts to promote reconciliation among all Iraqis. The International Decade of Iraq and the economic reforms associated with it.
We have emphasized our commitment to security and prosperity of a democratic Iraq and the war against terrorism, which affects all our citizens.
It has been agreed on common goals :
Speed up the pace of training Iraqi security forces, The Iraqi command and control on the Iraqi forces, The transfer of security responsibility to the Iraqi government.
We have established a high-level working group include the National Security Adviser and the Iraqi Defense Minister and Interior Minister and General Casey and Ambassador Zalmay Khalilzad, in order to make recommendations on how to accomplish these goals in the best possible way, The work group will complement these other mechanisms exist for greater clarification of our security and enhancing coordination among us.
We are committed to the partnership established by the countries and our two Governments will work in every possible way to a stable and democratic Iraq, In order to victory in the war on terrorism.

Iraq Taps Chinese Oil Companies to Double Production (Update1)

Oct. 28 (Bloomberg) -- Iraq will invite China National Petroleum Corp. and other overseas companies to invest in oil fields to double daily production to 6 million barrels by 2012, the country's oil minister Hussain al-Shahristani said.

``We need foreign partners to help develop new fields,'' al- Shahristani said at a press conference today in Beijing. ``Iraq will significantly increase its oil production in the next few years and China will significantly raise its imports. That's why the two countries will need to work closely together.''
Iraq will increase its oil production to 3.5 million barrels a day by next year, with the capacity to export 2.4 million barrels a day, al-Shahristani said. The increased oil output will not be curtailed by the Organization of Petroleum Exporting Countries, or OPEC, because Iraq has been producing less than its quota for many years, he said.

``Our friends at OPEC understand Iraq needs to produce more oil quickly,'' he said. ``The general position is to allow Iraq to produce as much oil as quickly as possible.''

China imports about 40 percent of its oil. The world's fastest-growing major economy may consume 7 million barrels of oil a day this year, 6.4 percent more than in 2005, according to an October forecast by the International Energy Agency.

Need for Oil
The Asian nation needs more fuel to run power plants and feed its industries, prompting Chinese oil companies to look abroad for fields. Demand for oil in the world's fourth-largest economy has almost doubled in a decade, contributing to record prices.

The Iraqi parliament is poised to pass a law to regulate the country's oil and gas industry. All contracts signed during and after the collapse of Saddam Hussein's regime will have to be renegotiated under the terms of the new legislation, al- Shahristani said today.

At stake are an estimated $700 million of agreements signed in 2000 that gave China National Petroleum the right to develop the Al-Ahdab and Al-Qorna oil fields in southern Iraq.

``A committee has been convened to discuss this and they will commence work next month'' to renegotiate the terms of the contract to meet the requirements of the new law, al-Shahristani said today. ``The law allows participation but not control. The oil of Iraq belongs to the Iraqi people.''
Renegotiate Contracts
Agreements that China National Petroleum and China Petrochemical Corp., the nation's biggest oil companies, had to develop Iraqi oil fields were halted by the U.S. invasion in 2003 and the conflict that followed.
Iraq's government is increasing efforts to stop attacks on oil installations and ease companies' concerns over security, Thamir Ghadhban, an adviser to the Prime Minister, said Sept. 13.
Chinese companies plan to drill for oil in Iraq, which holds the world's third-largest proven oil reserves, China Oil News, China National Petroleum's online newsletter, reported Oct. 18, citing Dathar Al Khashab, general manager of Iraq's Midland Refineries Co.
China was approached after U.S. companies refused to work in Iraq, Al Khashab was cited as saying. Chinese companies have dismissed security threats, he said, without giving details.
China's government supports a return by the nation's oil companies to Iraq. Al-Shahristani said he met Chinese oil executives including the directors of China National Petroleum, China National Offshore Oil Corp. and China Petroleum and Chemical Corp. to discuss investments in Iraq.
Chinese Technology
``Chinese oil companies have the capital, capacity, technology and interest to invest in Iraq,'' he said today. ``They are willing to modify their facilities to work on Basra crude if Iraq can guarantee consistent supplies. We can very easily double our output and guarantee the supply.''
``We welcome cooperation between Chinese oil companies and other countries in the energy field,'' Zhang Yuqing, deputy director of the energy bureau at the National Development and Reform Commission, said on Oct. 18. ``If the Iraqi side seeks investment from Chinese enterprises, especially in oil field exploration and production, the Chinese government won't interfere in any of the activities of the oil companies.''

Bloomberg.com: Asia

Still no info on the Smaller Demos? Any news?

Originally Posted by shotgunsusie

lol, i posted this when it first came out look back in the history thread. you must have looked past it, we even had a discussion about the 148.

piper youre overdosin on good news!!!

I knew I had seen this before and was going through some old post of yours. Thanks for saving me the trouble and also thanks to CP. We can't see good news often enough!

Best exchange rate I've seen at XE.com in a while!

Live mid-market rates as of 2006.10.29 02:00:28
1 IQD = 0.000683364 USD 1 USD = 1,463.35 IQD

and oanda.com

Sunday, October 29, 2006

1 Iraqi Dinar = 0.0007140 US Dollar

1 US Dollar (USD) = 1,400.52 Iraqi Dinar (IQD)

Interbank rate +/- 0%

This means:
You buy 1 Iraqi Dinar : 0.0007140 US Dollar
You sell 1 Iraqi Dinar : 0.0006552 US Dollar
You buy 1 US Dollar : 1,400.52 Iraqi Dinar
You sell 1 US Dollar : 1,526.31 Iraqi Dinar


Cheers!
DayDream

This is a cut from a briefing I was reading..it probably has already been posted in one of the threads earlier in the week, but still a good read.

For Immediate Release
October 23, 2006

The Iraqis also have very publicly been setting up benchmarks for their own political and economic progress. For instance, by the end of the year, there will be a hydrocarbon law. As you know, the share of petroleum receipts is an enormously important issue, not only economically, but politically within Iraq. They have already agreed to an investment law -- I've just mentioned that a couple of minutes ago -- because that does pave the way to foreign investment. And it also helps enact the Iraqi compact or the Iraq compact which the President and Prime Minister Maliki talked about during our visit to Baghdad this summer. That is one that is, in conjunction with the World Bank and the IMF and the United Nations, is going to make it possible for international investors to come into Iraq again and to make money.

Press Briefing by Tony Snow

ok this is a trip

Iraqi prime minister: 'I'm not America's man' - CNN.com

Originally Posted by DayDream

Best exchange rate I've seen at XE.com in a while!

Live mid-market rates as of 2006.10.29 02:00:28
1 IQD = 0.000683364 USD 1 USD = 1,463.35 IQD

and oanda.com

Sunday, October 29, 2006

1 Iraqi Dinar = 0.0007140 US Dollar

1 US Dollar (USD) = 1,400.52 Iraqi Dinar (IQD)

Interbank rate +/- 0%

This means:
You buy 1 Iraqi Dinar : 0.0007140 US Dollar
You sell 1 Iraqi Dinar : 0.0006552 US Dollar
You buy 1 US Dollar : 1,400.52 Iraqi Dinar
You sell 1 US Dollar : 1,526.31 Iraqi Dinar


Cheers!
DayDream

Interesting,

Yes, the dollar took a hit and dropped due to economic downturn, so don't read too much into it at this point.

Good luck to all, Mike

enough of the ignorant political comments. every recount shows bush won.
almost all the problems were in democratically controlled precincts. Did
you conveniently forget the mafia and the kennedy fix of 1960 ? If it wasn't
for G W Bush (and the brave soldiers ) Iraqi wouldn't have a chance to join
the civilized world and WE wouldn't have a chance to make A FORTUNE.
back to dinar info