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

Originally Posted by Wm.Knowles

Hello everyone. Again we continue to see a trend that by now we are all familiar with. Removing dinars from the economy with a small increase in the exchange rate. Obviously, they have not reached their target amount of dinar to remove. But as I have said before, this is what you would want/expect prior to a large adjustment in the exchange rate. The CBI is working for us and the Iraqi people in a meaningful and responsible way. I am asked several times a day what level will it RV at, and when. I don't know the answers to either question. It is like other doctors dealing with a very sick person, and they have done the right things and the patient is showing good signs of improvement. But since it usually takes a while to recover from a serious illness (iraq) the recovery period is difficult to predict. Even thugh you are sure they will fully recover. However as I stated in an earlier post, they cannot return to their past policies of selling as much dinar to the market at an exceptionally low price. To "undo" the removal of currency by returning to past practices is unreasonable. Therefore the cost of the dinar will have to be signifcantly higher. This currency has been considered "undervalued" from the beggining. The exchange rate has been considered one of the main reasons for inflation by the IMF. So expect good things to come in the short term. By the way, an improvement of 3 dinars a trading day in the exchange rate when projected for a complete year is an excellent return on dollars invested. Not very exciting, but a very large percentage return on our money.

@12 dinars per week in 120.5 weeks we get to 1 to 1 Weeeeeee!!!!!!!

Originally Posted by JoeDinar

@12 dinars per week in 120.5 weeks we get to 1 to 1 Weeeeeee!!!!!!!

That is over 2 years..... they will be lucky if they can manage 2 more days without a reval...they are out of time.

Originally Posted by cigarman

The difference between now and then is the central bank is buying only and not saling like they used to do. Hope this helps.

Not True, go to cbiraq.org and look at there Auction PDF file. You will see for yourself the auctions have not changed in about 3 years, The amounts sold vary but they always sold Dollars, not Dinars. Rarely do you see an auction where the banks want to buy dinars.

Originally Posted by Elfwizard

Not True, go to cbiraq.org and look at there Auction PDF file. You will see for yourself the auctions have not changed in about 3 years, The amounts sold vary but they always sold Dollars, not Dinars. Rarely do you see an auction where the banks want to buy dinars.

That's funny, I remember seeing that they did sell dinar at auctions prior to this month. I'm at work right now but I will look at it tonight.

Originally Posted by Elfwizard

Not True, go to cbiraq.org and look at there Auction PDF file. You will see for yourself the auctions have not changed in about 3 years, The amounts sold vary but they always sold Dollars, not Dinars. Rarely do you see an auction where the banks want to buy dinars.

Looking at the PDF's you cannot see whether they bought or sold dinars.

Only on the daily screen can you see that.

Makes it tough to track.

But looking at the current daily auction, it looks as if they're SELLING dinar, not buying it back as previously stated and hyped.

Wm. K can you explain in clear terms how to understand the daily auction page?

Thank you.

Originally Posted by cigarman

That's funny, I remember seeing that they did sell dinar at auctions prior to this month. I'm at work right now but I will look at it tonight.

I have been watching this like a hawk now for 3 years. I am not negative on this investment, when I bought I was thinking 5-7 years down the road Ill make some money. Its just some of the people here are NEW and the stuff that is happeneing at the auctions isn't really anything. The Rate has even went up and down like this before. The press releases saying the Dinar value needs to be raised are about 6 months old and counting {they have been hinting to this for about 6 months} SO anyone that is into this thing for a year or less, Just hang on, it wont happen overnight. I know from experience.

Originally Posted by Elfwizard

Thats False info, Have you looked back at the Auction sheets? They always sold dollars for dinars. They have rarely sold Dinars at Auction. Most of the dinar goes back out of the CBI to pay government projects and employees.

SO your theory is simply not true. Go do your research.

So the rest of us are all crazy and wrong including Wm Knowles ,GK , Adster, etc I DON'T THINK SO! ( Have you read and understood any of Wm Knowles posts?)

Originally Posted by Elfwizard

Thats False info, Have you looked back at the Auction sheets? They always sold dollars for dinars. They have rarely sold Dinars at Auction. Most of the dinar goes back out of the CBI to pay government projects and employees.

SO your theory is simply not true. Go do your research.

You are correct Elf. The dinar that the CBI sold from 11/7 to 11/13 was more then they ever sold in a 6 month period, let alone four days. The part that I like is that the rate is moving now. I have also heard that the dinar goes back out to pay the government employees but I never understood why because the CBI is independent from the government, can someone set me straight on that one please?

Info:

The ID in Kurdistan are mostly stable moving around 1430 ID to 1450 ID Per 1 USD

Money Line - Rate of Exchange in Kurdistan

To many people don't understand how the CBI auctions work. These articles and links should help you understand.

The
Ministry of Finance sells dollars from its oil receipts to the CBI, purchasing dinars to pay
for government operations. The CBI then sells some of those dollars in the daily foreign
exchange auctions. Transactions at this auction were typically $10-$15 million a day by
the end of March 2004.

http://www.bos.frb.org/economic/ppdp/2004/ppdp0401.pdf



The CBI currently has the following active and passive instruments that affect market liquidity (base money): • Foreign exchange auctions, in which the CBI buys or sells dollars to the market in light of its policy objectives; • A reserve requirement regulation that requires banks to hold in relation to their customers deposits: differentiated levels of deposits with the CBI, vault cash, and MOF securities. • An Overdraft Facility, for banks with reserve account balances at the CBI that are not sufficient to settle their net end of day payment obligations; • A Discount Window for bills of exchange and similar bank paper with a maturity of less than 90 days and at least two endorsements (currently charging 11% for good quality paper); • Lender of Last Resort Facility, which provides individually negotiated loans against collateral, for banks with chronic liquidity problems; • MOF securities Window, at which banks may buy or sell MOF securities at par (i.e. at issued interest rate).

http://www.cbiraq.org/monetary%20policy_EN.pdf



Iraq-Currency
Dollar demand sharply up in Iraqi central bank daily auction
Baghdad, Sept 3, (VOI) – Demand for dollars jumped more than $10 million at the Iraqi Central Bank daily auction on Sunday to $61.150 million compared to $51 million on Thursday.
The bank said in its daily statement it covered all bids which were $36.490 million in cash and $24.660 million in foreign transfers.
A total of 16 banks participated in the auction but none offered to sell dollars, the statement said.
The dollar exchange rate was 1,477 dinars, unchanged from last session.
DM


Iraq-Currency :: Aswat al Iraq :: Aswat al Iraq