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

Originally Posted by CharmedPiper

Unfortunately by the time they oust Maliki and want to put in Allawi there won't be any credibility left for big investors to depend on. Unfortunately Maliki is going to make or break this deal and if Bush doesn't slap some sense into him then I will....Maliki is really testing my good karma and I am on the verge of getting a little ticked off right now. But, he can redeam himself if he revals in the next day or 2....

I don't see the PM changing having an effect on an imminent reval. Like the MoF was replaced last summer am sure something is going on behind the scenes to depose Maliki. It'll be quick and will happen overnight. The world has no confidence in Maliki, hence one of the reasons Bush is going out there. Maliki has too close links to Al Sadr who was part of the process of electing Maliki. They and the world need a kick ass PM and NOW.

The big boys don't care who is in charge as long as it is a respected PM who has improved the security situation. Maliki's plans for doing this are weak and ineffective.

Originally Posted by Raditz

Just read on a swedish news site that England will start to bring home thousands of soldiers from Iraq, they have approx 7100 soldiers in Iraq.

But they stated that nothing will happen until in the beginning of next year. So they still have some weeks to Reval and to sort out the violence!

I read before next summer Raddy. So we have a good few months. Even if the British pull out expect the US to stay there for now. They have more to lose than the Brits whose PM is standing down anyway.

Posted by: saleem on Monday, November 27, 2006 - 09:47 AM
Basra-Oil
75 oil wells in al-Rumeila repaired
Basra, Nov 27, (VOI) – Seventy-five wells in al-Rumeila oilfield in southern Iraqi city of Basra were repaired by technicians of the South Oil Company, an official supervising reconstruction of oil wells said on Monday.
"Engineers of South Oil Company managed to repair 75 oil wells in al-Rumeila, 60 km north of Basra," Nasser Hussein al-Shimri told the independent news agency Voices of Iraq (VOI).
Al-Shimri added that work is underway to repair and operate 100 wells, pointing out that the capacity of each well is estimated at 3000 liters a day.
"The company is poised to repair all its fields and wells," he said.
Hundreds of wells were neglected or sabotaged after the events that ensued the U.S.-led invasion of Iraq in 2003. South Oil Company, the largest in Iraq, is trying to give these wells a kiss of life.
South Oil Company is considered as continuity to the National Oil Company, which was established in 1964, and it passed in many stages, which caused to develop its oil fields production.

AE/

Basra-Oil :: Aswat al Iraq :: Aswat al Iraq

By Ali Mahmoud al-Fakiki
27 November 2006 (Al-Hayat)

The Iraqi dinar is witnessing a gradual improvement in its exchange rate these days. The price of the dinar has risen from $ 0.000676 in early November to $ 0.00069 later during the same month. This means that the number of dinars against one dollar dropped from 1480 dinars to 1440 during that period. It is noteworthy that the exchange rate in the 1970s was $3.20 for one dinar, which exceeds the current price by four thousand and six hundred times.

It seems that the Iraqi government is planning now to fix the exchange rate at 1000 dinars/dollars, which is almost one third. The government plans to make this gradual, in order to avoid a sudden rise. This was the lesson learned in the aftermath of the sudden catastrophic decline that had occurred among traders and businessmen in 1995 and the accompanying financial and commercial turmoil, bankruptcies and trade and banking collapses.

If the current rise of the exchange rate from 1480 dinars to 1000 dinars to one dollar is applied, some people in Iraq will gain while others will lose, as follows:

Losers:
A- Savers in dollar. Iraqi savers lost confidence in the dinar. This urged many of them to keep most of their savings in dollars. These include traders and industrialists. When they will need to convert their savings to dinars, the loss will be huge.
B- Contractors in projects priced in dollars: Those are paid in dollar, but the majority of their expenses and local purchases are usually in dinar. This includes the labor wages and their purchases of materials of local origin. This is the case with building and construction contractors who purchase local supplies and construction materials (bricks, soil, sand, gravel). When they submitted their quotations they had evaluated their contacting service at the prevailing exchange rate before raising the value of the dinar and now they have to pay at the new rate and hence lose. After they handover the projects, they will receive the rest of their money in dollars.
C- Lenders in dollar: They will regain their loans valued at less than the value before the rate of the dinar was raised.
D- Borrowers in dinar: They will pay their debts upon maturity in dinars of a dollar purchasing power more than that at the time of lending. They will have to pay in a dinar that exceeds the lending rate by almost one-third. When the major collapse happened in 1995, thousands of traders announced their bankruptcy while indebted to others, and this was disastrous.
E- Employees who earn in dollar.
F- Estate lessors with rental allowances in dollar while their expenses are in dinars.
G- Estate tenants who pay in dinar while their income is in dollar.

Gainers:
A- Savers in dinar, for being able to buy more dollars.
B- Employees and workers who are paid in dinar, since they will receive the same pay but with a more purchasing power and a better exchange rate.
C- Producers: since they will sell their products for the more powerful dinar.
D- Borrowers in dollar and whose savings are in dinar: since they will pay their debts and their interests in the cheaper dollar.
E- Retirees: they will have more purchases with the same salary.
F- Those covered by the program of the social safety network (the retirees themselves).
G- Estate lessors in dinar.
H- Estate tenants in dollar while their incomes are in dinar.

This means that raising the dinar exchange rate will benefit some and harm others.

It is noteworthy that the terrible continuous escalation in prices during the 1980s and 1990s of the last century in Iraq was not due to an increase in the value of money itself, but due to the fact that this increase was not met by a real balance or a strong national economy and national income or a supporting domestic product. When the State issued currency, it behaved like a merchant who issues instruments with no balance to meet their nominal value. Moreover, there were the constraints of trade and external transfer. Otherwise, the amount of money in circulation in a country like Japan is more than the amount of Iraqi currency in circulation (as an absolute figure).

During the post-war period, the balance was met, but the rise in prices was due to high costs and shortage of supply. For example, the average of the prices of Iraqi vegetables and fruit has increased this year by 100% as compared to the prices of 2005, but due to the shortfall in production. The agricultural expert Jaber Abu al-Eis (Ministry of Agriculture) says that the execution rate in the agricultural plan for 2006 amounted to 17%. The prices of local poultry products this year are twice as much as 2005. The reason was the banning of the poultry industry, among the procedures of combating avian flu and the prevention of the importation of these products from many countries. Moreover, it was due to the rise in the costs of energy, fuel and transportation costs to the double or even more. Also there are the imposed royalties paid by the importers, producers and transporters to gangs and bandits, including kidnapping payments and ransoms. There is also bribery, corruption and alliances between businessmen and government officials, in addition to the high wages, the rise in prices and interests of loans caused by the Central Bank. All these factors led to an increase in the cost of production and inflation rates. Such factors have to do with costs and supplies while they have nothing to do with demand. Thus, the saying, "Much money looking for a few commodities" does not apply here.

The current inflation is due to high cost and shortage of supply. Nowadays, the government ensured assets that cover the nominal value of money and a domestic product that supports it. But there remain two options. The first option is to increase the quantity (number of units) by a third, raise salaries and wages and expand and improve the miserable network of social safety to include additional numbers of extremely poor people living at half a dollar per day amounting to four million. The second option is that the government raises the dinar exchange rate by one third as it is planning now.

In the first case, the needy employees and workers who are not covered by social welfare will benefit, and there will be no loss or damage to other people. In the second case, employees, workers, retirees and others will benefit, but, at the same time, others will lose as mentioned earlier.

According to reliable sources, the second option comes in implementation of the directives of the International Monetary Fund. But, as we stated in a previous article, the former American Secretary of State, Henry Kissinger, described the IMF as "a doctor who has only one pill for every conceivable illness".

* Mr. Ali Mahmoud al-Fakiki an Iraqi expert in economics


The Implications of the Improvement of the Iraqi Dinar Exchange Rate | Iraq Updates

Originally Posted by shotgunsusie

Announcement No.(813)

D.G. of Foreign Exchange Control

The 813 daily currency auction was held in the Central Bank of Iraq day Monday 2006 / 11/ 27 so the results were as follows :

Details Notes
Number of banks 9 -----
Auction price selling dinar / US $ 1439 -----
Auction price buying dinar / US $ ------ -----
Amount sold at auction price (US $) 20.580.000 -----
Amount purchased at Auction price (US $) ------
Total offers for buying (US $) 20.580.000 -----
Total offers for selling (US $) ------ -----

Cash amounts sold to the bank and its customers were USD(3.280.000) at a rate of(1439+1+10=1450)IQD\USD .
The amount sold to make transfers abroad was USD (17.300.000) at a rate of (1439-2)+ one dinar as a bank fee and exempt the transferred amount from conversion fee.


not much to operate on. thats about a mil a day they have been running on.

How does that tie into what Gloribee's source said about them not being able to sell large amounts of dinar from the bank and only selling enough to make change or daily operating expenses? (or something like that)

worf

Translated version of http://www.aladala.net/home/index.php

Baghdad / justice sources in the Presidency of the Republic that a meeting was held Saturday between President Jalal Talabani and Masud Barzani, head of the territory Cordstan which had reached the capital Friday to participate in the meetings of the Political Council.

The sources said that "Talabani and Barzani discussed the latest political and security developments on the Iraqi arena. The two sides stressed the need to deepen and attempts to join forces in order to stop the end of sectarian tension. " On the other hand, Talabani established a luncheon in honor of Barzani attended by the American ambassador, Zalmay number of Kurdish personalities including Dr. Rose Nouri Shaways, Dr. Fouad Massoum, Dr. Barham Ahmed Salih, Dr. Latif Rashid.

I dont believe they will go 1:1 or anywhere close for a longtime. Once they go 1000/1 it might make things a little easier so they can fix security issues. THEN MAYBE, "MAYBE" a 1:1 or close? Just my opinion, what do you guys think?

Originally Posted by CharmedPiper

Translated version of http://www.aladala.net/home/index.php

Baghdad / justice sources in the Presidency of the Republic that a meeting was held Saturday between President Jalal Talabani and Masud Barzani, head of the territory Cordstan which had reached the capital Friday to participate in the meetings of the Political Council.

The sources said that "Talabani and Barzani discussed the latest political and security developments on the Iraqi arena. The two sides stressed the need to deepen and attempts to join forces in order to stop the end of sectarian tension. " On the other hand, Talabani established a luncheon in honor of Barzani attended by the American ambassador, Zalmay number of Kurdish personalities including Dr. Rose Nouri Shaways, Dr. Fouad Massoum, Dr. Barham Ahmed Salih, Dr. Latif Rashid.

O.K., maybe I missed it, but who is the guy you underlined?

Iraq better make some attempt at progress before this meeting because it is a meeting of Arab neighboring countries and I am sure they are not happy with Iraq right now.

Translated version of http://www.aladala.net/home/index.php

An urgent meeting of the Ministerial Committee on Iraq

Cairo / follow-up justice Kuwait's ambassador to Egypt and Permanent representative to the Arab League Ahmed Khaled Al-Kulaib yesterday on the agreement to hold an urgent meeting of the Arab ministerial committee on Iraq at the Arab League headquarters in the fifth month of December next. Kulaib explained that the agreement had been approved during the extraordinary meeting of the Arab League Council at the level of permanent delegates, which was held yesterday, to discuss the latest situation on the Iraqi arena. The Secretary-General of the Arab League Amr Moussa said yesterday that he had sent an invitation to the members of the Committee on Iraq on the level of Arab Foreign Ministers to hold a meeting to discuss the developments on the Iraqi arena in light of the crisis that could devastate the whole of Iraq.

He said in a statement quoted yesterday by the Middle East News Agency, the need to address the sectarian violence and miss the opportunity to those who target Iraq's unity, security and stability and urged political and religious leaders in Iraq to work on calming the situation.

Originally Posted by PaulieThaGreat

I dont believe they will go 1:1 or anywhere close for a longtime. Once they go 1000/1 it might make things a little easier so they can fix security issues. THEN MAYBE, "MAYBE" a 1:1 or close? Just my opinion, what do you guys think?

1000/1 makes no real difference. They need to curb inflation and give their people buying power. 1000/1 does not cut it. Remember the current rate is a programme artificial rate, and at a 1000/1 it would still be close to an artificial rate. Come on, we know what the REAL rate was 3 to 4 years ago.