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

Originally Posted by Dinar Duchess

Would someone confirm for me what a trillion dinars looks like in zeros please,

I am sure there are alot of them.......

Originally Posted by frathousemicrowave

Answer



Like I stated earlier, I also heard this but I don't know if it's true with the CBI being separate from the government.

Well you don"t think that the GOI has a trillion Dinar payroll do you?

Originally Posted by TEXASGIRL

THEY, CBI, ARE BUYING DINARS FROM THE BANKS AND NOT SELLING THEM. THEY ARE KEEPING THEM. THE DINARS ARE BEING REMOVED FROM CIRCULATION TO INCREASE THE VALUE OF THE DINAR.
Sorry, didn't mean to yell. There have hundreds of posts explaining this over the last few weeks.

I guess you didn't read the last 3 pages. THEY HAVE BEEN DOING THIS FOR 3 YEARS!!


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

Originally Posted by Mike5200

Well you don"t think that the GOI has a trillion Dinar payroll do you?

ITs not just the payroll! THey use the dinars to pay for ROADS, BRIDGES! and all government projects.

Again from WM Knowles 11/13

Elfwizard I hope you are reading these!



--------------------------------------------------------------------------------

Another point. Sorry if I bore you. One might asked, "Are not banks just tranferring excess cash to the central bank? Thats not how it works. A central bank is a banks bank. Meaning that the local banks have accounts at the central bank just like our national banks have accounts at the Federal Reserve Bank. So to remove excess cash (its done every day in the US) they would simply transfer the cash to the central bank and it would be deposited to their account. This procedure is removed from any daily auction exchange rate. What you have been seeing is an exchange, again exchanging dinar for USDs. Placing a large amount of USDs in the local banks for a reason. You have to ask yourself why?

Originally Posted by Elfwizard

I guess you didn't read the last 3 pages. THEY HAVE BEEN DOING THIS FOR 3 YEARS!!


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

Actually, Elf, I read every page and every post.
In case you missed it, there have been a lot of changes going on in the last 3 years and most notably, in the last few months.

Wm Knowles again from 11/13

CBI auction.

Again we see an auction where the CBI has conducted an auction that has moved a large amount of currency from circulation (110M). With the exception of yesterday, the last six auctions has been some of the largest in their history. If my math is correct, over 450M USD of dinar has been removed and replaced with USD in the local banks. A huge move in itself. The question was "does this reduce inflation". The answer is yes. We know that inflation is too much money chasing to few goods. This movement of dinars out of the system is an extremely healthy move and when combined with the overall debt reduction is a classic action that will result in a higher value for the dinar and credit worthiness of Iraq as a whole. How many more days can they continue to remove Dinar out of the economy? We don't know. But it isn't a move that can continue indefinitly. At some point they will have removed the excess by using their currency reserves and oil money. This recent trend is exactly what you would expect them (CBI) to do prior to an increase in value of their currency. So I am very encouraged by these actions and feel they are in compliance with the SBA from the IMF. So many times we have seen small countries continue to print money until it is worthless. By removing dinar from the economy they are taking the opposite and responsible direction that will decrease inflation and decrease the CBIs exposure for larger amounts of dinar in the economy should the currency be revalued. Again, how long can this go on? I don't know. We'll have to see. But this is a very large and favorable movement in the direction of an economy that will result in a longer term increased value of the dinar and will benefit all investors and the Iraqi people by increasing their purchasing power. Your comments are appreciated.

Originally Posted by Mike5200

Wm Knowles post from 11/13
--------------------------------------------------------------------------------

The key to the problem will be the auction in the am. Keep in mind that the CBIs behavior has been very strange for the last couple of weeks. They have placed 350Million USD into the local banks in the last five auctions and removed around 700Billion dinar from the sysyem. Just the behavior you would expect in anticipation of an increase in demand for the dollar. i.e.RV. Today was a sweep the floor, i.e. to remove the rest of the available dinar from the local banks. In the am, i expect either no auction or a very small exchange like today. (maybe other news). What other reason would they place that much USD in the local banks? I for one do not place much confidence in the political statements. After all I originated from Arkansas and I have heard political statements from the best, i.e. B.Clinton. The central Banks behavior is the key and their behavior in the last few weeks and especially the last five auctions suggest they are placing themselves in a position to handle a large demand for USD in their local banks, remove large amounts of currency from circulation (reducing inflation and the available currency they will have to buy at a higher level, and begginning to remove the larger denominations from circulation. Your comments are appreciated.

Question: Why would the CBI be putting USD into the locals banks if their goal is to build local confidence in the IQD?

I thought I read that many locals have been using USD instead of IQD because they trust it more; and that the CBI's ultimate goal was to build confidence with the IQD so the Iraqi's would start using IQD, which would further build demand and increase the rate.

Originally Posted by TEXASGIRL

Actually, Elf, I read every page and every post.
In case you missed it, there have been a lot of changes going on in the last 3 years and most notably, in the last few months.

Whatever you say, Im just telling my story. I have been on this ride since 2003 about 4 months after the new dinar came out. Most of the CBI's actions are not new. The only thing that got me kinda excited was the press release from the CBI stating they will try to combat inflation by raising the dinar. I think they will do it slowly just as they are doing until it evens out. Its going to be another 2 years I think, But I will wait patiently, LIke i said I counted on 5-7 years to begin with. I will try to only post the side of the story everyone wants to hear from now on.

Originally Posted by Mike5200

Well you don"t think that the GOI has a trillion Dinar payroll do you?

Did you read my post? It says I don't know how they do it with the CBI being independent. So I don't know, do you think they have a trillion dinar payroll???