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

Today: 18 Jun 2006


Finance & Banking

Iraq Joins Arab Bourse Union

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17 June 2006 (Baghdad: Al Sabah newspaper)

The Executive Director of the Iraq Stock Exchange, Taha Ahmad Abdul Salam, announced that Iraq has joined the Arab Bourse Union.

Kuwaiti News Agency (KONA) quoted Abdul Salam as saying that the Iraq Stock Exchange had received a message from the Arab Bourse Union announcing the approval of Iraq’s membership.

The announcement led to increased share activity and the market reached 400 million shares.



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I am honestly very confused by this IMF requirement to raise prices on oil and gas. Is it only related to prices inside Iraq? What is the motivation for the IMF here? A reval would drastically improve the ability of Iraqis to purchase foreign goods and I believe that refined gasoline is mostly imported at this point? Hmmmm.. maybe the issue is the exporting of oil? Above it said the price of oil will increase from 25 to 100 dinar (per barrel?) and is that the amount of the increase or the overall price? At the current exchange rate and international oil prices, the price of oil expressed in dinar would be huge, something over 100,000 dinar per barrel.

There are lots of other solid reasons supporting a reval but this one still confuses me.

Originally Posted by clueless

I am honestly very confused by this IMF requirement to raise prices on oil and gas. I believe it is only related to prices inside Iraq? What is the motivation for the IMF here? A reval would drastically improve the ability of Iraqis to purchase foreign goods and I believe that refined gasoline is mostly imported at this point? Hmmmm.. maybe the issue is the exporting of oil? Above it said the price of oil will increase from 25 to 100 dinar (per barrel?) and is that the amount of the increase or the overall price? At the current exchange rate and international oil prices, the price of oil expressed in dinar would be huge, something over 100,000 dinar per barrel.

There are lots of other solid reasons supporting a reval but this one still confuses me.

Part of IMF requirements for Iraq to increase subsidies. It's the second time this year. They have to comply with the IMF.

What it does mean is that it's getting harder and harder for your average Joe on the street to survive, work and feed his family. There have to be concessions made soon by way of a reval.

Originally Posted by eric69

Today: 18 Jun 2006


Finance & Banking

Iraq Joins Arab Bourse Union

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17 June 2006 (Baghdad: Al Sabah newspaper)

The Executive Director of the Iraq Stock Exchange, Taha Ahmad Abdul Salam, announced that Iraq has joined the Arab Bourse Union.

Kuwaiti News Agency (KONA) quoted Abdul Salam as saying that the Iraq Stock Exchange had received a message from the Arab Bourse Union announcing the approval of Iraq’s membership.

The announcement led to increased share activity and the market reached 400 million shares.



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Nice one eric, saw this elsewhere, good news. Shows the market is ready, the ISX just have to open the doors. We get this investment law done and dusted and we'll be as good as there.

Originally Posted by Adster

Part of IMF requirements for Iraq to increase subsidies. It's the second time this year. They have to comply with the IMF.

What it does mean is that it's getting harder and harder for your average Joe on the street to survive, work and feed his family. There have to be concessions made soon by way of a reval.

You mean to decrease subsidies right? I remember that was the case in the first price increase and it makes a lot more sense thinking about it in that light. The IMF would not want subsidies still in place after a reval for sure.

And the hardship for the average Iraqi is certainly clear. Makes one wonder why they would not just remove the subsidie at the same time as the reval. And that statement said there would be more price increases to come.

Does seem to be counter to efforts to increase public acceptence and support for the new government. Surely there are reasons for some of the things going on that we will never know.

Today: 18 Jun 2006




Finance & Banking

Stock Exchange Indicator Raises

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17 June 2006 (Baghdad: Al-Iraqiyah TV)

The general feeling of optimism generated by the formation of the new Cabinet, the full allocation of posts, the death of the terrorist head Abu Musab AL Zarqawi, the implementation of new security measures in the capital, and, last but not least, the President Bush’s unexpected visit to Baghdad giving great support to the government and the whole political system, have all led to a 3% increase in the indicator as compared to the last Exchange meeting.




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Originally Posted by clueless

You mean to decrease subsidies right? I remember that was the case in the first price increase and it makes a lot more sense thinking about it in that light. The IMF would not want subsidies still in place after a reval for sure.

And the hardship for the average Iraqi is certainly clear. Makes one wonder why they would not just remove the subsidie at the same time as the reval. And that statement said there would be more price increases to come.

Does seem to be counter to efforts to increase public acceptence and support for the new government. Surely there are reasons for some of the things going on that we will never know.

Correct,

It is a decrease in subsidies which is required. The reason for the slow decrease in subsidies was not to create an immediate revolt. This is a fine balancing act that has to be done not to upset the whole economics in region, all planned with one reason in mind, the reval, so all these little pieces have been falling into place far more quickly than they ever imagined three years ago, in fact, most are amazed as it was forcasted it would be 2010 early on, so this is all good news.

Good luck to all, Mike

Originally Posted by clueless

You mean to decrease subsidies right? I remember that was the case in the first price increase and it makes a lot more sense thinking about it in that light. The IMF would not want subsidies still in place after a reval for sure.

And the hardship for the average Iraqi is certainly clear. Makes one wonder why they would not just remove the subsidie at the same time as the reval. And that statement said there would be more price increases to come.

Does seem to be counter to efforts to increase public acceptence and support for the new government. Surely there are reasons for some of the things going on that we will never know.

They are putting the price up for gas and oil, it's an increase making it harder for the people to live, work, and play.


Iraqi ministry of oil announces hike in fuel prices
Jun 18, 2006, 13:40 GMT

Baghdad - Iraq's Oil Ministry announced Sunday an increase in gas and fuel prices for the second time in six months in line with Iraq's commitment to the International Monetary Fund (IMF).

Iraq has reaced a deal with the IMF whereby the latter will write off Iraq's debts in return for certain conditions, including increased fuel prices.

Moatassem Akram, deputy oil minister told al-Mashreq newspaper on Sunday that the increase in the prices of oil products would take effect from Monday.

The price of gas and gasoline will increase one dinar per litre, while oil will increase from 25 dinars to 100 dinars.

'The plan to increase the prices of oil products is one of the conditions of the IMF. This increase won't be the last but there will be more increases,' Akram said.

The Iraqi government began fuel price increases in January. But the move has aroused the anger of the Iraqi people.

The government said that the profit from the price hikes would be distributed through a network of social benefits to the poor, displaced and handicapped segments of the society.

Iraqi cities are now witnessing a shortage of gas with thousands of vehicles queuing up daily in front of gas stations.

Right, increase price == decrease subsidie. Thanks again for all the great information guys. Sorry to cause churn here.

If the Dinar revalues the average Iraqi's money will be worth more in regards to the goods it buys. As such, the need for subsidies will be greatly reduced if not eliminated. As Adam stated, it's a balancing act; remove subsidies without a reval and the people suffer more and thus react negatively. Reval and reduce subsidies at the same time and, provided the reval is large enough, the subsidies won't be missed.

EW