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

Originally Posted by TEXASGIRL

Has anyone seen this before? Has it always been that rate?

Yes, It's nothing to get excited over. I remember when people first found that people were posting that it was a reval, but it wasn't.

http://www.jhu.edu/~iaesbe/hankepub_files/Iraq.pdf

Inflation was a problem during the
Hussein regime. Prices rose at a 68 percent
annual rate in 1979, 95 percent in 1980, 139
percent in 1981, and 369 percent in 1988.3
The Economist Intelligence Unit estimates
that inflation was 100 percent per year in
1997, declining by 10 percent per year to
reach 60 percent in 2001 and returning to 70
percent in 2002.4 The official exchange rate
of the Iraqi dinar is still US$3.22 = ID 1, but
the black-market rate has long since diverged
from the official rate, suggesting that
repressed inflation has been significant and
that the above-mentioned inflation estimates
are best understood as lower bounds.

This of course is just someone's opinion.

Originally Posted by TerryTate

Posted by Wm. Knowles:



You are right on the money here. The trend is more important than the amount in circluation. The economy will dictate when the CBI must stop removing currency from circluation as the rate will go up.

With regard to the amount in circluation I have heard the 4.5 trillion in circulation/9 trillion printed all the way up to 20 trillion printed, but it is interesting to note that if the number were 9 trillion printed, then the CBI has removed nearly 10% of the cash that is printed, and almost 20% of the cash in circulation. Even at 20 trillion printed its nearly 5%, which is a substantial amount. Especially in one weeks time. I thought maybe they were trying to finish up the removal as subtly as possible by last weeks rush (panic as you put it), so as not to give speculators time to react, but this weeks article has me scratching my head.

Someone else I believe it was H20 asked, "haven't they been buying dinar for the last 3 years?". The answer is yes, but it was at a much lower rate than last week. If I recall correctly they have sold almost as much dinar or around half as much as they bought at the auctions. Thus, some came in and some went out. But I am pretty sure that they were always bringing in more dinar than they were sending out. That is why the first auction last week were they bought nearly 105 million dinar and sold virtually none caught my eye. Could be wrong as my memory ain't what it used to be, but I like what is happening. Nothing to be sad about.

So, Wm., which William Knowles are you? The Nobel Prize winning chemist, the lawyer, the gun dealer/spy enthusiast, the internet hacker, just using a famous nom de guerre or are you just Bill Knowles? Just curious.

The dinar the CBI buys back goes right back out to pay public employees, they are not REMOVING it from circulation. The MOF takes oil dollars and buys dinarsfrom the CBI to pay the public employees. Its a viscous circle!!!

Originally Posted by mrvgs

Sorry didn't get it all:
IQD rate of 1348 at National Bank of Kuwait
Rates

I recall discussions at IIF a couple of months ago indicating the NBK has always listed it at a lower rate.

Originally Posted by Elfwizard

The dinar the CBI buys back goes right back out to pay public employees, they are not REMOVING it from circulation. The MOF takes oil dollars and buys dinarsfrom the CBI to pay the public employees. Its a viscous circle!!!

is there an estimate on the amount going out to government employess and a link, and then why such a high number of dinars in the last week?

Originally Posted by texaslonghorns

You are right, but not with this much dinar in circulation. They are fixing that it looks like!

You knows its interesting, Iraqi currency value up till the exchange of the currency according to the IMF was in the 3.22 range or greater:

Note all figure are SDR's equaling about 1.48 USD each.

About the IMF What the IMF Does Country Info News Data and Statistics Publications


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Iraq: Exchange Rate
as of September 30, 2006

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Date
Exchange Rate

April 28, 2006
0.000460244

April 29, 2005
0.000451682

September 22, 2004
0.000466938

September 8, 2003
2.53758

April 30, 2002
2.53758

April 30, 2000
2.43852

April 30, 1999
2.38074

April 30, 1998
2.38881

April 30, 1997
2.3558

April 30, 1996
2.21848

April 30, 1995
2.04504

April 30, 1994
2.26323

April 30, 1993
2.26004

April 30, 1992
2.34852

April 30, 1991
2.39924

April 30, 1990
2.46985

April 28, 1989
2.48283

April 29, 1988
2.32407

April 30, 1987
2.46269

April 30, 1986
2.73556

April 30, 1985
3.24557

April 30, 1984
3.07215








Iraq: Financial Position in the Fund



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______________________________________

Noozz EditorialSep 25 2006

A reliable source in the Iraqi Ministry of Finance asserted the Central Bank’s ability to implement the capital adequacy requirements as determined by Basel II, reported al-Sharq al-Awsat. On the fringe of a forum at the Ministry of Industry and Minerals about banks’ role in economic reform, the source told al-Sharq al-Awsat the central bank was proactive in handling its duties. The Central Bank is particularly trying to relieve itself of some of the old regime’s practices such as lending government organisations, said the source. One of the proposed solutions undergoing serious study is developing a financial market for government instruments. Such a market would secure all needs for liquidity and provide a viable local alternative to transferring capital out of Iraq, the source explained.Returning to the Central Bank’s role in achieving economic stability, the source said the bank enjoyed complete autonomy and was exerting a lot of effort for that purpose. One of the most significant steps on that path was replacing the four trillion dinars of the old currency with the new which ended in January 15 2004. This endeavour helped regain trust in the dinar and significantly improve the exchange rate.Another important procedure is the recent approval to grant licenses to foreign banks which should help build an active and competitive banking sector in the country.The daily auction for foreign currency has also helped prevent excessive fluctuations in the exchange rate.Another step toward price stability and effective monitoring authorities is the legislation of a new central bank law offering legal independence. Other significant legislation is the new law for commercial banks and liberating the interest rates on all local financial instruments (deposits, loans, securities) which has become effective. Other major endeavours the Central Bank is currently planning for include the restructuring of governmental banks, implementing a strong monitoring system, and creating comprehensive statistical work that covers all the major sectors. In addition to developing a market for governmental financial products, said the source. __________________________________________________ _____________Head of Iraqi Capital Market: Iraqis Need Awareness for Stock Investment Noozz EditorialSep 25 2006 Head of the Iraqi Capital Market, Taha Ahmed Abdul Salam, said Iraqi people contributed to the recently flourished stock prices although most of them entered the market without any significant prior experience. Talking to al-Sharq al-Awsat, Abdul Salam said there were several reasons for the lack of trading on some listed companies. Some of the companies are busy with general assembly meetings and others are suspended from trading. Another reason is that many investors practice a buy-and-hold strategy without much trading. They do so either out of fear of speculation or for lack of knowledge in how to go about speculation.Since establishment of the stock market, investor awareness plans were carried out through periodical newsletters about the market and how it works, explained Abdul Salam. In addition, there is the internet service which contains complete teachings about stocks and the stock market as well as allows any visitor to make any questions.The stock market head added that electronic trading would soon be introduced allowing for an increase in trading magnitude. All provinces would be able to trade through agents who will manage the process.The recent rise in stock prices recorded 5.2 percent which the market maintained, Abdul Salam told the pan Arab paper.

_____________________________________

When you consider now also that when the currency exchange amount was about 4 trillion dinar although I've seen a report declaring 4.2 trillion and now the circulation is or should I say was 9.3 trillion [maybe now 8.3 trillion or less]

Well a real value based on the IMF record would seem to indicate near 1.60 range USD.

So it's possible another Germany is sitting before our eyes only this time the currency has already been dealt with......

Originally Posted by owejac

The lowest rate was 1350 at January 15-2004.

Sorry SGS but I found it on the CBI site. Here are the link.(History Exhange Rates)

http://www.cbiraq.org/C.B.I.%20FOREI...20AUCTIONS.pdf

http://www.rolclub.com/135296-post62.html
note that this post was prior to yours. it helps to read history so you dont have to repeat ideas.

Originally posted by Elf Wizard:

The dinar the CBI buys back goes right back out to pay public employees, they are not REMOVING it from circulation. The MOF takes oil dollars and buys dinarsfrom the CBI to pay the public employees. Its a viscous circle!!!

Hmm, really, wow I guess those Iraqi's are making a lot more than we thought... They only needed to buy $544,270,000 ($544 million) worth of dinar (about 800 billion dinar) to make the weekly payroll this week, eh. No wonder they are going under, they only needed about 5 to 10 percent of the total printed Iraqi Dinar currency to make payroll.... After further consideration I'm just gonna have to disagree with ya Elf.

Originally Posted by DayDream

Okay...I want to correct myself BIG TIME about the Yazzman Rate. You will notice I changed my signature from 1.86 Yazzmen Rate to .54 Yazzmen Rate. As I was reading through the posts I saw this one...

Quote:
"I am reading this as $1 = 0.31 ID so 1 NID = $ 3.22 correct me if am wrong or tell me what I won when I am right."

That got me rethinking about the "black market" rate and I realized I looked at the whole thing wrong, I never was very good at math. When I said that the last known "black market" rate PRIOR to the CBI auctions that I could find was in late 1989, the official exchange rate was 0.31 dinar for US$1. The black market rate was reported as being five to six times (1.86 dinars for US$1) higher than the official rate. So I put the r/v at 1.86 USD when in actuality it is .537 USD. The "black marketers were undercutting the .31 dinar and were selling it alot cheaper, not placing a higher value to it but lowering it.

Now we have the old article resurfacing....

I would to inform all the stockholders of Baghdad Bank that the report of the managing council 2004 was prepared according to the demands of Central Bank of Iraq to balance US dollar price to 0.310 ID instead of its real value (1460) ID per 1 US dollar, so, the report and general budget do not necessarily reflect the actual situation of Baghdad Bank and the volume of economical incoming indexes, so, this report was issued in order to meet the demands of the rules and instructions.

Hmmmm...now theres that .31 again. It seems that it may be true about returning it to its 1989 rate of .31 BUT we have to take into account what the CBI itself posted:

Bank of Baghdad, the Iraqi Marazi 18 / October / 2006 World Marazi 4196th statement on the Iraqi current positive trends in the overall level of prices Press Communiqué 'Issued from the CBI Concerning the current Positive Seabird of the General Price Level following World Marazi Iraqi interestdeep price trends and the current positive indicators displayed by the index of consumer prices in Iraq (Am'cher for inflation), which scored a broad decline in the growth rates, particularly in the month of September of this year, 2006,The (negative 13%) compared with August of the same year.And to the extent that the bank believes the Iraqi Marazi in this decline as a sign of the health of the Iraqi economy, to show its ability to contain the phenomenon of inflationary trends and respond to unwanted levels of living or productivity in the distribution of resources among the various uses,However, he is still aware that the source of Ant price fluctuations resulting from vibrations generated by the supply sector in the level of real rates of production or productivity promised by changing the basis for the development of activities of price and delinquency rates on the price of natural tracks and levels of moderation.Taking the positive developments in the energy sector, fuel and transport and communication sector has Abera, in the low rates of inflation in the month last September as the rates of decline contributed by paragraph fuel and lighting components in the index of consumer prices in Iraq about (negative 42%), while transport contributed paragraph. ( Wa%some of the surface (negative 33 and the World Marazi Iraqi need support the economic policy of positive trends in the level of inflation and the decline through various hubs and trends, particularly in the field of energy, fuel, and the areas of fiscal policy aimed at restructuring public expenditures and a containment pressureMali, as well as the role of the investment policy, including the various investment opportunities and boosted economic growth in the country. At a time when monetary policy to sense that there was high optimism in the stability of the general level of prices and the decline in inflation rates but it is aware of the importance of staying on the trends of strong backing to the hard-line LasTakrar economic,reflected in the current level of rates as well as the bank continues Marazi,interest Rate Policy-Marazi Iraqi Iraqi bank to achieve its objectives current operational addressed to influence the rates of the monetary liquidity and control menaced which embodies the current activity of the auction money orders, bonds and foreign currency auction. The bank will maintain Marazi Iraqi on the other tracks in Ceasix cash efforts to achieve intermediate goals for reducing inflation and contain inflationary expectations, relying on "stabilizing nominal" cash Aatar Yazzmen rate of the Iraqi dinar against the dollar and boosted the purchasing power of the Iraqi dinar to move across the tracks and cash assistance in inflation targeting. As imply afor Ihalanange cash adopted by the World Marazi Iraqi Without doubt on the link between climate and means of monetary policy,whether in the area of interest rates or exchange rates on one hand,The stability of the general level of prices on the other hand promised the Association of tasks President underlying the Marazi Bank in the implementation of its goals to maximize the purchasing power of cash income and the strengthening of the capacities of the country coffers in a way that achieves the objectives of economic growth in the long term.

If they return it to the Yazzmen rate which was 1.86 dinars for US$1 then the New R/V rate will be .537 rounded to .54USD. This seems to concide with the rumor that was posted about the Egyptian "black marketers" buying dinars for .50

Don't be to harsh with the , my head is already sore from bashing my head into the wall over and over. But please consider what I have posted, I believe we will find that the r/v will be in the .54 range.

Cheers!
DayDream

didnt someone mention $3.?? something a few days ago trying to correct your figures? or were they turning the equation around? they said that was the older rate of it.

Originally Posted by Inscrutable

http://www.jhu.edu/~iaesbe/hankepub_files/Iraq.pdf

Inflation was a problem during the
Hussein regime. Prices rose at a 68 percent
annual rate in 1979, 95 percent in 1980, 139
percent in 1981, and 369 percent in 1988.3
The Economist Intelligence Unit estimates
that inflation was 100 percent per year in
1997, declining by 10 percent per year to
reach 60 percent in 2001 and returning to 70
percent in 2002.4 The official exchange rate
of the Iraqi dinar is still US$3.22 = ID 1, but
the black-market rate has long since diverged
from the official rate, suggesting that
repressed inflation has been significant and
that the above-mentioned inflation estimates
are best understood as lower bounds.

This of course is just someone's opinion.

but then again this was BEFORE the new currency was distributed.