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

Here is food for thought.

With all the bank robberies in Iraq, the lack of security in the country and the need of the CBI to transport a great deal of cash to the different banks, I would think the CBI would want everyone to think they are going to be closed down for an extended period of time. Like we have now.
It seems to me this would be the perfect time to distribute the smaller denominations of currency. The execution of Saddam would also be a great distraction at this time. If a revaluation is to come they are going to have to have the smaller bills in place. People simply cannot be carrying around 25000 dinar notes post revaluation; the streets would more hazardous than they are now.

02 January 2007 (Iraq Directory)
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An official at the Iraqi Central Bank expected a deficit in the next-year budget due to pumping dollars into the local market, to preserve the stability of the dinar exchange rate.

Head of the Department of Statistics and Research at the "Central", Madhar Mohamed Salih, declared that the new budget will exchange allocations by the dollar, pointing out that the rise in the value of the dinar had a positive impact through limiting expenditures, to reduce inflationary pressures in the Iraqi economy and reduce costs on prices.

He pointed out that 95% of the budget incomes depends on oil revenues, as a basic resource for the country, pointing out that the coming conditions will be encouraging for lifting the value of the dinar against the dollar, but could not determine the rate of exchange only after starting the work by the general budget.

The dinar continued to rise against the dollar during the auction of the "Central", at a sale price of 1352 dinar last Sunday, compared to 1360 dinar last Thursday. The expert at the "Central", Majid Assuri, expected a remarkable improvement in the rate of the dinar, due to the low dollar exchange rate, over the next couple of months. The last rise in the rate of the Iraqi dinar against the dollar exchange rate was in 1995, but then the exchange rate stabilized between 1400 and 1700 dinar to the dollar.

The "Central" attributed the high rate of the dinar against the dollar, to the stability in the sale of the dollar below its real exchange rate. Assuri explained that the inflation suffered by the economy now is a price inflation, and not a monetary inflation, pointing out that the aim of the "Central" is to limit the effects of the monetary inflation. As for the price inflation, it is due to the lower commodity presentations, and to the greedy who exploit the circumstances through which Iraq is going. He expected a significant improvement in the rate of the dinar, and the drop in prices according to this improvement.

DELETE IF ALREADY POSTED, NENO OR SOMEOBODY PM IF THEY POSTED IT BUT I DON'T THINK I HAVE READ IT TODAY.

A Law for Investment in Iraq
02 January 2007 (Dar Al-Salam)
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The Iraqi Presidency Council issued Investment Law No. 13 of 2006, containing provisions for regulation, rights and encouragement for investors, encompassing Iraqis and non-Iraqis, designed for the phases of establishment and operation. The law aims to attract and encourage investment and the transfer of modern technologies to the country; to encourage both the Iraqi private sector and foreign investment in the country; to protect the property rights of investors and their profits, and the expansion of exports and enhancing the competitive edge at home and abroad.

The law covers all branches of investment, production and service activity, except for the extraction and production of oil and gas, banks, and insurance companies. However, it did turn out that the extraction activities for other minerals, in addition to the mineral refining and oil refining sectors, are covered by the law like other branches of industry, investment and other sectors like agriculture and tourism, health, etc.

The law does require the participation of an Iraqi partner with foreign investors, except for the purposes of licensing or enjoying tax exemptions and privileges and facilities. The law also stipulates the establishment of a National Commission for Investment to take up the task of implementing these provisions. It allows regions and governorates, provided they are not ensconced to the region, to form investment commissions in their own areas that enjoy licensing authority and the granting of exemptions and facilities and the management of investment projects there. In order to facilitate the licensing process, the bill authorizes the issuance of establishment approvals (investment licenses) through the establishment of the so-called 'single window' in the region or province.

The investor enjoys, regardless of nationality, all the advantages and facilities, guarantees and exemptions. In housing projects, the investor has the right to acquire the land needed for the project.

The rights, privileges and facilities in the new law include the following:

(1) Enjoying a tax exemption for a period of ten years from the year of operation, with an exemption on import duties for importing the requirements in the establishment phase, and the phases of expansion, development and modernization of equipment and machinery, means of transportation and materials, and the operational phase of the import of raw materials and intermediary and spare parts.
(2) Allowing capital and earnings in and out of the country and the opening accounts in banks inside and outside Iraq.
(3) Circulation in the Iraqi market for securities, bonds, equities, and the setting up investment portfolios.
(4) Rental of the land needed for the project for the period of 50 years; a renewable term. The right to own land also in housing projects.
(5) Facilitating the investor's enjoyment of additional advantages, especially according to the international bilateral agreements between Iraq and its government, or according to multilateral agreements. Including the right of the foreign investor to sell his project in whole or in part.

After nearly half a century of providing tax exemptions and generous assistance to the industry in Iraq, starting from the 1950s, the result was loss-making government projects that could only be resolved by selling them off. Project administrations, enterprises and factories became addicted to State assistance and protection. The projects were powerless to face up to competition, at home and abroad, accompanied by a qualitative and quantitative underdevelopment, and in terms of price, with unsustainable spin-off industries that feed key inputs into these sectors. They failed to catch up with the demands of the market for constant modernization and the fragmentation of demand. This also includes obsolete and marginal factories and declining investment rates from year to year, while the country gradually lost its ability to attract investments, and many bureaucratic complexities, and many of them administrative constraints, which prevent opportunities for progress, repressing the speed of response and wasting time and effort.

To what extent will the new law in this new phase achieve its objectives in attracting investments?

This depends primarily on the availability of advanced infrastructure, which, in turn, includes all the social, political and material factors, and not only the roads and bridges, and electricity and water; but also, the conditions of the parts and components manufacturers and the conditions of secondary, spin-off industries, and the availability of government management skills. Not to mention the tax system and the availability of transparency and the system of macroeconomic management, and the rates of education, training and the country's reserve of the educated, engineers and technicians, and population characteristics.

The availability of an infrastructure of this kind, along with the new investment law, will be a crucial factor in attracting investment.

The extent to which financial and administrative corruption is shrinking or expanding is another factor that attracts or repel investments.

In a Transparency Global (headquartered in Berlin) report, the State of Haiti ranked first among the most corrupt, and Iraq came in third. In his statement before the US Congress on February 8, 2006, former US Secretary of Defense Donald Rumsfeld said: "administrative and financial corruption in Iraq is omnipresent in all aspects of government administration and finance ". Even if this corruption recedes, there will remain a more deeply rooted problem, in the form of concepts, perceptions and attitudes inherited by the bureaucracy and in the government administrative cadres at all levels.

The new law has recommended adopting the so-called 'single window' to receive investment applications to decide on them. These recommendations follow the pattern of development and investment legislation in the developing countries for the purpose of simplifying procedures to save time, effort and money. Will the situation in Iraq become congenial to the establishment of this window? It is noteworthy that the General Directorate for Industrial Development in Baghdad applied this 'window' for more than a year. But what is being done by the aforementioned Directorate is just unifying the entity that receives applications (the formal side). As for the bureaucratic content, it remains the same as it was about 30 years ago or more, without change.

Certainly, Iraq will attract many investments after the issuance of the new law, but will the volume of these investments reach the desired ambition? As is the case in the South-East Asian countries, such as Singapore or Malaysia, for example, this also demands a revolutionization of the same concepts and ways of thinking and dealing with such topics. What is necessary is reliable economic administration that lays the foundations before the structure, and not vice versa, when it comes to handling development and dealing with investments. Only then can the new law achieve its goals and the aspirations of the country.

Originally Posted by michael16

Here is food for thought.

With all the bank robberies in Iraq, the lack of security in the country and the need of the CBI to transport a great deal of cash to the different banks, I would think the CBI would want everyone to think they are going to be closed down for an extended period of time. Like we have now.
It seems to me this would be the perfect time to distribute the smaller denominations of currency. The execution of Saddam would also be a great distraction at this time. If a revaluation is to come they are going to have to have the smaller bills in place. People simply cannot be carrying around 25000 dinar notes post revaluation; the streets would more hazardous than they are now.

I would venture to assume that the banks have had the smaller notes for a while now. It doesn't make sense to me that they would issue them out at the last minute.

Since the smaller notes would be a huge give-away, just as a leak about the reval date and amount, there would be no way of knowing until the day of. JMO

Originally Posted by owejac

Originally Posted by rvalreadydang
The Iraqi dinar rose 12.5% after penalty




First I would like to wish you all at RC a happy and prosper new year.

The above article are telling me that what I am about to share with you just might bi worth reading.

I have a friend at work hwo are Iraqi he comes from the south of Iraq near the Kuwait border. He's name is Mahier.

He told me last night that on 1/1-07 he made a call to hi's relatives in Iraq, and they did tell him that the exhange rate on the street many plases in Iraq are now at IQD 1220 to the U$D. They also told him that it is now hard to get dinar's many places in Iraq(Are the dinar drying up inside Iraq too?), and that many Iraqis are buying dinar's now.

This is also in accordance with exhangerate at Trade Bank Iraq TBI. Trade Bank of Iraq - Your Trade and Investment Partner in Iraq that are now displaying exhangerates as followes: (Updated: 1/1/2007 8:18:00 AM)
US Dollar ( USD )Buy 1,261.50 Sell 1,382.80

(Notice the big difference in Buy and Sell rates)
And Ameinfo Business News



Tuesday, January 2, 2007 1 Iraqi Dinar = 0.0007926 US Dollar
1 US Dollar (USD) = 1261.60 Iraqi Dinar (IQD) Learn about the new Iraqi Dinar
Median price = 0.0007232 / 0.0007926 (bid/ask)
Minimum price = 0.0007232 / 0.0007926
Maximum price = 0.0007232 / 0.0007926

Todays rates from TBI and Oanda (Ameinfo) make me pretty sure that Mahier did tell me the truth last night.

Could be nice to have it verified. Maybe from the kurds OSW?

I did post becouse I see it as good news and that the rates from Mahier (Iraqi steet) and TBI + Oanda (Ameinfo) are so close.

IMO we are realy close to our dreams com true.

I am not sure where you got that quote from but this is what I get.

Tuesday, January 2, 2007

1 US Dollar = 1,382.80 Iraqi Dinar

1 Iraqi Dinar (IQD) = 0.0007232 US Dollar (USD)

Interbank rate +/- 0%

This means:
You buy 1 US Dollar : 1,382.80 Iraqi Dinar
You sell 1 US Dollar : 1,261.60 Iraqi Dinar
You buy 1 Iraqi Dinar : 0.0007232 US Dollar
You sell 1 Iraqi Dinar : 0.0007926 US Dollar

Learn about the new Iraqi Dinar
Median price = 1,261.60 / 1,382.80 (bid/ask)
Minimum price = 1,261.60 / 1,382.80
Maximum price = 1,261.60 / 1,382.80

LEADING STORY

DNO says Iraq oifield tested 8,500 bpd

Norwegian oil company DNO <DNO.OL> said that its Tawke number 4 well in northern Iraq produced 8,500 barrels per day during a test, the most of any well drilled so far on the field.

Noozz.com - Leader in Emerging Market Premium Business Information

WASHINGTON, Jan. 2 (UPI) -- Foreign investors eye Iraq oil

Potential outside investment in Iraq's oil sector is increasing despite a lack of governing oil law.

Two rival Indian companies are working together to obtain a field in Iraq's south. Meanwhile a Norwegian company already involved in the Kurdistan oil sector in Iraq's north increased its share of an oil field.

And just last week Iraqi and Russian officials were discussing renewed investment by Russian companies.

Iraq could be a lucrative spot for oil development. It has 115 billion barrels of proven crude reserves -- the third largest in the world -- with an unknown amount of undiscovered oil.

But production averaged less than 2 million barrels a day in 2006, down from 2.6 million before the war started.

Violence is hurting both ongoing production in the oil sector as well as development. There is also no federal oil law governing how contracts will be meted out or revenues disbursed.

India's Financial Express reports the state-run Oil and Natural Gas Corp. and private major Reliance Industries Ltd. have begun negotiations to develop the Tuba oil field. Each would have a 30 percent share, with Algeria's Sonatrach obtaining 40 percent.

The trio pitched for the field in 2000 but was unsuccessful.

Norway's DNO said it has increased its share of oil fields in the north to 55 percent. It struck the deal to increase its share from 40 percent by agreeing to shoulder the costs of development.

Iraq's Foreign Minister Hoshyar Zibari and Russian Ambassador Vladmir Gamov discussed last week the possibility of Russian companies returning to Iraq to develop its oil sector.

Russia had struck deals with Saddam Hussein, but those deals were ignored after he was removed from power.

Last month Japan agreed to loan Iraq $420 billion to upgrade oil facilities in the south of the country,

Iraq premier Maliki says wants no second term

02 Jan 2007 19:52:28 GMT
Source: Reuters

WASHINGTON, Jan 2 (Reuters) - Iraqi Prime Minister Nuri al-Maliki said he has no interest in a second term and wished he could be done before the end of his current term, in which rampant sectarian violence has defied hopes for unity.

Asked whether he would accept a second term, Maliki said in an interview published on Tuesday by the Wall Street Journal: "Impossible."

"I wish it could be done with even before the end of this term. I would like to serve my people from outside the circle of senior officials, maybe through the parliament, or through working directly with the people," Maliki said.

"I didn't want to take this position. I only agreed because I thought it would serve the national interest, and I will not accept it again," he said. His term is intended to be four years, but it could be cut short by a power shift in parliament.

Maliki also criticized U.S.-led multinational forces and the Iraqi army as being too slow to react to insurgents.

The interview, part of a larger article about him, was held on Dec. 24, as U.S. President George W. Bush has been considering increasing the U.S. troop presence in Iraq or other changes in his war strategy.

The interview was also given nearly a week before the tumultuous hanging on Saturday of ousted Iraqi President Saddam Hussein, which further increased sectarian tensions.

Saddam was taunted at the gallows by supporters of a radical Shi'ite cleric and a surreptitious video was leaked. The hanging fueled charges by minority Sunni Muslims that the execution, of a fellow Sunni was an act of retribution by majority Shi'ites.

Maliki, a Shi'ite, was sworn in in May as the head of a coalition of Shi'ites, Sunnis and Kurds, with hopes of averting a sectarian war three years after Saddam's ouster in a U.S.-led invasion. The violence has continued, but Maliki said it had not become a civil war.

"What is happening in Iraq is a war of gangs and a terrorist war. That is why it needs to be confronted with strong force and with fast reaction," Maliki said.

Iraqi commanders need more authority over the counterinsurgency, he said. "The way the Iraqi army and the multinational forces operate now is very slow in taking a decision to react. This gives the terrorists a chance to hit and run."

Cheers!
DayDream

Iraq Government Focusing on Rebuilding Oil Industry
By Jim Randle
Washington, D.C.
02 January 2007

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VOA News - Iraq Government Focusing on Rebuilding Oil Industry

Iraq's Kurds, Sunnis, and Shi'ites are bickering over how to distribute the nation's potentially vast oil revenue. In the meantime, energy officials are trying to rebuild the battered industry while saboteurs are busy attacking pipelines and other facilities.


An Iraqi oil refinery
Insurgents often attack Iraq's pipelines and other key oil facilities, leaving them in flames.

The damage is frustrating efforts to rebuild Iraq's crucial oil industry, which is the most important sector of the nation's economy.

Iraq currently produces around two and a half million barrels of oil a day, far below its potential. Iraq's Oil Minister, Hussain al-Shahristani, wants to change that. "Our current plan is to increase production of crude oil over the coming five years to between four and four-and-a-half million barrels per day."


Hussain al-Shahristani
Al-Shahristani says he hopes to quickly make deals with major foreign oil companies, and use their advanced technology to help Iraq reach its huge potential.

But former Iraqi Oil Minister Issam Al-Chalabi says the dangerous security situation has kept all but some small foreign companies out of the country.

"There is no way that any company, any proper company, an international oil company or national oil company or anybody with some sense in his mind would be willing to go into Iraq invest money and develop those services."

Al-Chalabi says major oil companies, like ExxonMobil or Shell, are also discouraged by uncertainties over Iraq's proposed laws governing their industry. The political situation is complicated by the uneven distribution of Iraq's oil.

The bulk of the petroleum is in the southern part of the country, mostly populated by Shi'ites. Some Shi'ite leaders are pressing for autonomy for their region. Another portion of the oil is in northern Iraq where many Kurds live. The area already enjoys considerable autonomy from the central government. The center of the country is thought to contain much less oil and is home to the Sunni Arabs who ruled the nation under Saddam Hussein.

Each of the Iraqi factions is bargaining hard for laws that favor their access to this crucial resource. Iraq's new constitution says the nation's oil belongs to all Iraqis, but the rival factions interpret the document in different ways. Kurds have already signed agreements with small foreign oil companies searching for new oil.


Massoud Barzani (file photo)
But Iraq's Oil Minister al-Shahristani says such contracts should be signed or approved by the central government. That prompted the Prime Minister of the Kurdistan Region of northern Iraq, Nechirvan Barzani, to threaten to break away from the country. And prompted visiting U.S. Secretary of State Condoleezza Rice to try to smooth things over with Kurdistan President Massoud Barzani.

"As for the revenues of oil, stipulated in the constitution, we are for a fair distribution of the oil revenues all over Iraq," said the president.

The Kurdish leader did not repeat his colleague's strong rhetoric in public.

Meantime, the Kurdistan regional legislature has been working on a new "Petroleum Law" while the central government has been working on a new "Hydrocarbon Law."

It is not clear if these different pieces of legislation will resolve the dispute between the central government and the Kurdistan regional government, or ease friction over oil between Sunni and Shi'ites in the south.

But an influential study of Iraq by leading U.S. experts [the Iraq Study Group] called an oil law guaranteeing equitable revenue distribution of revenues crucial to national reconciliation. And experts say clarifying the legal status of foreign oil companies will make it easier for Iraq to attract the foreign expertise and technology needed to rebuild the oil industry.

Iraq has opened some new facilities, such as a refinery in Najaf, with ceremony and heavy security. "God willing, this refinery could process 30,000 barrels a day," said an oil engineer at the refinery.

If political disputes are solved and security improved, many experts say Iraq could eventually produce about six million barrels of crude oil per day.

Former oil minister Al-Chalabi says current high oil prices mean a healthy oil industry could bring in $100-billion a year in revenue, enough to easily rebuild the oil sector -- and fund reconstruction of much of the rest of the troubled nation.

December 24, 2006
Do they know something in Iraq that we don't?
Greg Richards

Here is a chart on the Iraqi dinar taken from the safedinar.com website. The time scale is January 24, 2004 - December 24, 2006. What the chart says is that the Iraqi dinar has increased in value on the market by 9% from August 24, 2006 to December 24, 2006 and is now at an all-time high (this is the "new" Iraqi dinar introduced in October 2003). This appears to be a pretty impressive increase in value for the Iraqi dinar, particularly given the despair we read in the press. Whether or not it is conclusive, it is likely an important tile in the mosaic that makes up the picture of Iraq.


Data is also available at the website for the Bank of Iraq. The data given by the Bank of Iraq is the inverse of the data in this graph. This graph shows the amount of US dollars per million Iraqi dinars. The Bank of Iraq lists the number of Iraqi dinars to the US dollar. On December 24, 2006, this figure was 1,352. If you divide 1,000,000 by 1,352, you get $740, as shown here.
Posted at 10:42 PM
American Thinker: What is the balance sheet on Iraq?