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

Originally Posted by Wm.Knowles

This is a very good point. I think if we had an individual who was about to attend graduate school and needs a ******* thesis or doctoral dissertation in economics, banking, finance MBA etc. they could chart the history of the CBI activities. Their topic might be,

"The establishment of Central Bank operations and its eventual effects on inflation, monetary controls and the eventual reevaluation of the Iraqi currency".

I think once they charted the auction results, they would find that over the history, the CBI was placed far more currency into circulation than they have removed. What we are seeing recently is a dramatic effort to remove currency from circulation in a very short period of time. Something is propelling this recent effort and at this time we can only guess. But what we are viewing is a very healthy effort to remove currency to reduce inflation, place USDs into the local banks in anticipation of an increased demand for USDs (as you might anticipate in case of a RV). And maybe, to begin the process of removing the large denominations from circulation (an opinion).
So lets continue with an anticipation the the CBI auction results in the am will continue to reinforce this position.

Since the start of the auctions in Jan 04, the CBI has bought over $23B worth of IQD. At 1470, that's a total of over 33T IQD, almost double the amount of currency in circulation. In fact, I've been wondering what the Iraqis have been using to buy goods, maybe they're back to old century bartering. lol. But that's not the important point, it's obvious that the CBI has been trying to reduce currency in circulation, and then some. The most important thing that has changed for many months now (which almost everyone haven't paid any attention to) is the significant amount of remittances abroad. Think about it. Someone or some entity abroad has to have a huge supply of IQD. Usually, remittances are incoming foreign currencies that need to be changed into IQD. So at the auctions, we should've been seeing more demand for IQD by the participating banks. But no, it's the other way around. The banks are buying USD for transfer abroad. This points me to the fact that IQD are being sent to IRaq in exchange for USD. Someone or some "thing" abroad have a huge stash of IQD. It's all good.

i know we are all just wondering what this will r/v too, and i really don't know either, but there are a lot of good speculations out there with very valid reasoning behind each one. i do appreciate valid post, and thank you for your endless search.
God bless!!!!!

P.S. my prediction will be 1.73 (based only on pulling numbers from the sky)

could someone please explain to me what the spread means and how it works? thank you for you time.

Originally Posted by DayDream

Miss WOOTSTER I have something to say to you.....I LOVE YOU!!! You certainly have a way about you that makes a person think!

Let me start off by saying...I WAS WRONG!! You really got me wracking my brain about this Yazzmen rate. Although I stand behind everything I have stated about how the "black market" works in conjunction to the dinar value, I myself have been perplexed how the marketers were making any money in all this. All the sights I have checked were quoting the rate that I stated with some giving a worse rate than the .52USD I stated. BUT none of them were official sites soooooo I decided to try to find any other quote that would reflect more in our favor. Guess what? I found one! Its the Library of Congress!!! lookey lookey

dinar (ID)
Currency unit consisting of 1,000 fils or 20 dirhams. When officially introduced at the end of the British mandate (1932), the dinar was equal to, and was linked to, the British pound sterling, which at that time was equal to US$4.86. Iraqi dinar (ID) equaled US$4.86 between 1932 and 1949 and after devaluation in 1949, equaled US$2.80 between 1949 and 1971. Iraq officially uncoupled the dinar from the pound sterling as a gesture of independence in 1959, but the dinar remained at parity with the pound until the British unit of currency was again devalued in 1967. One Iraqi dinar remained equal to US$2.80 until December 1971, when major realignments of world currencies began. Upon the devaluation of the United States dollar in 1973, the Iraqi dinar appreciated to US$3.39. It remained at this level until the outbreak of the Iran-Iraq War in 1980. In 1982 Iraq devalued the dinar by 5 percent, to a value equal to US$3.22, and sustained this official exchange rate without additional devaluation despite mounting debt. In early 1988, the official dinar-dollar exchange rate was still ID1 to US$3.22; however, with estimates of the nation's inflation rate ranging from 25 percent to 50 percent per year in 1985 and 1986, the dinar's real transaction value, or black market exchange rate, was far lower-- only about half the 1986 official rate.

Library of Congress / Federal Research Division / Country Studies / Area Handbook Series/ Iraq / Glossary

This comes to .62 IQD/1.61 USD!!!!!

Can't get more official than this (except for out of the horses mouth themselves) and even though the CBI has been silent as far r/v rate....they really weren't silent after all. They gave us a slight hint by mentioning the Yazzman Rate!

The CBI has said they want to return to the Yazzmen Rate...well here is the Yazzmen Rate $1.61!!!!!

WOOT WOOT MISS WOOTSTER!!

Why couldn't you have responded sooner to my posts Susie (I waited and waited ?) You could've saved me a lot of headaches!

Any thoughts?

Cheers!
DayDream

Hey Daydream, I just wanted to say GREAT WORK! I love post like these!

Oil prices closed higher by declines in stocks of fuel in America 11 - 16-2006
Translated version of http://www.sotaliraq.com/

London (Reuters) - Oil prices closed for futures contracts higher on Wednesday for the first time in four days after American government data showed that stocks of fuel in the United States have declined more than expected last week, and for the sixth consecutive week.

The recorded increase in crude stocks exceeded expectations but traders ignored that and concentrated on the decline in stocks of fuel.

It ended the American light crude for decades December December meeting of dealings in New York Stock Exchange NYMEX up 48 cents to 58.76 dollars per barrel after it skyrocketed during the meeting to 59.40 dollars.

On the International Petroleum Exchange in London closed European benchmark crude Brent $ 59.46 on the high 62 cents.

Got oil prices on the support of the report also said that OPEC is likely to cut production again in the organization when the oil ministers meet in December in December and news of the fixed position on Iran to continue its nuclear program.

The Energy Information Administration said on Wednesday that the American stock derivatives, which include intermediate heating oil declined by 3.6 million barrels to 200.3 million barrels last week, while expectations point to a decline in the capacity of 400 thousand barrels only.

Gasoline stocks fell by 3.7 million barrels, while expectations were indicating a decrease of 100 thousand barrels only.

Recorded stockpiles of crude oil in the largest consumer of energy in the world increased by 1.3 million barrels to 336 million barrels continue to rise for the third consecutive week, surpassing expectations of an increase of 300 thousand barrels.

Originally Posted by warrior44

could someone please explain to me what the spread means and how it works? thank you for you time.

If you are asking about spread during exchange, here it goes...

spread = difference between the forex exchange rate and the exchange rate a local bank will give you.

Your local bank down the street will likely give you a reduced exchange rate thus taking their profit at that point. This will be costly to YOU depending on the rate they give you and the amount you exchange.

Ex:

At a Forex rate of 1USD = 1IQD
if local bank offers .99USD = 1IQD


exchange 25k IQD at local bank = 24,750 (bank just took $250 out of your pocket)
exchange 100k IQD at local bank = 99,000 (bank just took $1,000 out of your pocket)
exchange 1M IQD at local bank = 990,000 (bank just took $10,000 out of your pocket)

...and that's just a penny fee off of the exchange rate. Imagine how many pennies they will deduct off the real Forex exchange rate.

Originally Posted by Wm.Knowles

Good night all. The auction in the am will be very interesting for us all. Thank all of you for your kind comments and PMs. Enjoy the evening.

Mr. Knowles, I appreciate your posts and enjoy your insights. I have an additional question for you on whether the dinar is actually being removed from the iraqi economy by the CBI.

As the Ministry of Finance purchases dinar from the CBI in exchange for dollars (dollars it receives from oil exports, as oil is traded in dollars), as its domestic expenditures are largely in dinars, aren't the dinars that the CBI receives in these auctions being put right back into the economy via the MoF?

So the upshot of all of this is as follows: are the dinars really being "removed" from the Iraqi economy? I will agree that the dinar seems to be getting marginally more scarce, as the exchange rate against the dollar is inching downward (favorably).

I eagerly anticipate your response.

Originally Posted by Vipor

If you are asking about spread during exchange, here it goes...

spread = difference between the forex exchange rate and the exchange rate a local bank will give you.

Your local bank down the street will likely give you a reduced exchange rate thus taking their profit at that point. This will be costly to YOU depending on the rate they give you and the amount you exchange.

Ex:

At a Forex rate of 1USD = 1IQD
if local bank offers .99USD = 1IQD





exchange 25k IQD at local bank = 24,750 (bank just took $250 out of your pocket)
exchange 100k IQD at local bank = 99,000 (bank just took $1,000 out of your pocket)
exchange 1M IQD at local bank = 990,000 (bank just took $10,000 out of your pocket)

...and that's just a penny fee off of the exchange rate. Imagine how many pennies they will deduct off the real Forex exchange rate.

Thank you for taking your time to explain this to me.
Rol Club Rocks!!!!!!!

Good Morning From Doha, Qatar...it's 6:20 AM and my day is beginning and again I want to thank the crew for all; here's to the Reval.
__________________
I'm going with 1.44 and that's final.
Thanks

I think that you might be a mite lite there ADM

Is anyone else MAD!!!!!!

I am really mad as the talk of pulling the troops out of Iraq in 4 - 6 Months. We will be leaving a whole Country of people just as they are making head way. I know War sucks but this was necessary and pulling out before you are finished with a victory is making security worse for Both Iraq, US and the World. If we let the terrorist win by leaving in the middle of the battle we all lose not just money but safety. The terrorist already think they have won one over on the US with Rumsfield resining.

THIS IS ABOUT WORLD SECURITY!!!!!!!!!!!

If we pull out now all the troop from US and other Country's that have very sadly died protecting their Country did it for us to quite it dose not seem right.

I am sure things will work out as big MONEY is involved so is Country's and big business. We need all of the natural resources and that is why it will work out. But I am mad that they would even consider pulling out now.

OK I am off the RANT I just wanted to get that off my chest.

Dinar-Excited