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

Originally Posted by pipshurricane

BAGHDAD, Aug 2 (Reuters) - Iraq's central bank offers a beacon of stability in a country on the brink of civil war, but the governor is still forced to use safe houses for meetings with guests too scared to visit his headquarters downtown.

Sinan al-Shabibi makes light of the bank's location a few blocks from Haifa Street, one of the most dangerous places in Baghdad. But many prefer to avoid the narrow road that leads to the bank, fearing it is too easy for potential kidnappers to block.

"It is very difficult. In many cases we see a lot of people outside. We designate a house or something like that and see them," he told Reuters in a recent interview in his third floor office, overlooking an internal courtyard.

The central bank is on Rasheed Street, long Baghdad's financial centre, and next to its old headquarters, badly damaged during the 2003 U.S.-led invasion to topple Saddam Hussein and from which his son Qusay allegedly stole $1 billion on the eve of war.

Approached through a bustling market, the bank remains in the heart of the city, in contrast to most government operations which have moved to the heavily fortified Green Zone on the other side of the Tigris river.

"It is very difficult to work somewhere else. All the banks are here and all the staff. We can always have alternative offices, but it is better to be with the staff of the bank," said Shabibi, who spent 11 years at the United Nations and was Iraqi Minister of Planning from 1977 to 1980.

The guardian of Iraq's new currency, the central bank was re- created by U.S. occupiers in the image of a modern institution with its independence enshrined in law.

NEW APPROACH

It now conducts daily foreign currency auctions, in which the Iraqi dinar has maintained striking stability at around 1,475 dinar to the dollar despite an Iraqi inflation rate of 52.5 percent year-on-year in June.

Shabibi says there is no intervention to keep the dinar strong. Nor is there a black market currency price, indicating the official exchange rate reflects real dinar purchasing power.

The very model of a modern monetary policy maker, Shabibi said: "The most important objective of the central bank is the preservation of price stability. That is why we are concerned and monitoring the (inflation) situation."

Interest rates were raised to 12 from 10 percent in July and Shabibi said in the interview further action might be needed.

All this marks a sea change from the mismanagement the central bank endured under Saddam, whose government used its overdraft at the bank to print money while saddling it with debts that were never paid.

Shabibi said a recent audit of the bank by accountants Ernst and Young, which has not been published yet, gave it a clean bill of health from corruption, but exposed the costs of years of abuse.

"It opened our eyes to what kind of losses we had in operations and to losses from outside our operations, which were put on our balance sheet, and that is not fair," he said.

The same treatment was meted out to state-owned lenders Rasheed Bank and Rafidian Bank, which the central bank must now restructure in cooperation with the ministry of finance.

Shabibi said changes to create the healthy banking system needed for economic progress in Iraq would happen soon.

But he declined to be more specific, displaying a gift for sidestepping questions that he claimed to have learned from the former chairman of the Federal Reserve.

"We had some technical assistance from Alan Greenspan in being vague," he said.

http://www.alertnet.org/thenews/newsdesk/L02107786.htm

Now THAT'S a nice sentence....

[

Shabibi said changes to create the healthy banking system needed for economic progress in Iraq would happen soon.

But he declined to be more specific, displaying a gift for sidestepping questions that he claimed to have learned from the former chairman of the Federal Reserve.

"We had some technical assistance from Alan Greenspan in being vague," he said.

http://www.alertnet.org/thenews/newsdesk/L02107786.htm[/QUOTE]

That's funny! One doesn't think of Iraqi bureaucrats as being funny, but that really is.

Shabibi said changes to create the healthy banking system needed for economic progress in Iraq would happen soon......

Like the sound of this folks whatever happens out there I believe we'll know very soon...

Interesting,

With the extra security being put in place, and mention of banks being at risk, and with recent robberies, you have to wonder if it is connected in any way. Maybe they shipments were of smaller denominations, and this is why not much news was reported other than needing two pick up trucks to haul it away. Had to be small denoms or it would not make sense, maybe all 250 notes. (g) Been trying to find out if this is the first thefts from banks, but it is tough with so little reported on thefts.

Good luck to all, Mike

Over the last two months I have seen posts where two other banks have been robbed. I posted a question about this several pages back. Looks like the insurgents need and want the money from the soon R/V they know is comming.

Never heard any follow up on this. Hope you can find the posts Mike, I am still to new to figure all this posting stuff out.

Wish I knew how all this mess is going to play out for our Dinars pegging. When the new troops get there I hope they knock the heck out of the death squads

that is one of the major thing that need to happen I suppose. Get rid ogf the terroist and the biggest problem is solved.
the fear factor taken away.

Muthanna-Gas
Muthanna gets less cooking gas, prices jump
By Nafi’ Naji
Muthanna, Aug 2, (VOI) – Prices of cooking gas have rocketed up in Iraqi province of Muthanna as its quota of gas was trimmed down, the manager of the Oil Products Distribution Company in the province said on Wednesday.
“The recent rise in cooking gas prices is due to decreasing the province’s quota of gas as the pipeline company in Basra said the province would receive two tankers daily instead of seven,� Kamel Mohssen told the independent news agency Voices of Iraq (VOI).
He said that some traders illegally hiked the prices to more than 10,000 dinars per cylinder compared to prices set by the company at 1,500 dinars in Samawa and 1,750 dinars in the rest of Muthanna.

Economists : removal of 3 zeroes from the currency will lead to collapse

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A friend sent this to me...

http://64.233.179.104/translate_c?hl...08-02/9901.htm

Baghdad-right Ismail
Economists challenge effectively removing three zeroes from the currency Adin take this step, the process attempts to cause the collapse of the Iraqi economy suffering mainly poor security conditions and rampant administrative and financial corruption in institutions and joints State, expected high prices and low purchasing power in the application of the procedure proposed opening the door to investment and create a productive and control over resources and the disposal of projects illusory. The Ministry of Finance has submitted a proposal to the Central Bank of Iraq calls for the deletion of three zeroes from the currency, said Dr. Ismail Taha Professor in the Faculty of Administration and Economics at the University found that the deletion of three zeroes of the Iraqi currency has no meaning now only reduce the number of banknotes in circulation will lose father January part of the purchasing power and there would be no place for small groups of currency pointing out that the time to take action is when advancing the national economy and stabilize the political and security situation. He added Dr. Salim Mohammed Abboud of the market research and consumer at the University of Baghdad that is a step to remove zeroes from the currency will be reduced purchasing power in the economy is declining primarily Instead of creating productive base and the control of the country's resources and the disposal of projects illusory that have a high proportion of expenditure in addition to the Alero Ateb and equipment for the security system

Originally Posted by cigarman

Economists : removal of 3 zeroes from the currency will lead to collapse

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

A friend sent this to me...

http://64.233.179.104/translate_c?hl...08-02/9901.htm

Baghdad-right Ismail
Economists challenge effectively removing three zeroes from the currency Adin take this step, the process attempts to cause the collapse of the Iraqi economy suffering mainly poor security conditions and rampant administrative and financial corruption in institutions and joints State, expected high prices and low purchasing power in the application of the procedure proposed opening the door to investment and create a productive and control over resources and the disposal of projects illusory. The Ministry of Finance has submitted a proposal to the Central Bank of Iraq calls for the deletion of three zeroes from the currency, said Dr. Ismail Taha Professor in the Faculty of Administration and Economics at the University found that the deletion of three zeroes of the Iraqi currency has no meaning now only reduce the number of banknotes in circulation will lose father January part of the purchasing power and there would be no place for small groups of currency pointing out that the time to take action is when advancing the national economy and stabilize the political and security situation. He added Dr. Salim Mohammed Abboud of the market research and consumer at the University of Baghdad that is a step to remove zeroes from the currency will be reduced purchasing power in the economy is declining primarily Instead of creating productive base and the control of the country's resources and the disposal of projects illusory that have a high proportion of expenditure in addition to the Alero Ateb and equipment for the security system

So basically the economist(s) are saying "Ix-Nay on the Op-Lay" (Nix on the Lop). Just what we all have been saying; lopping hurts the Iraqis...

You are exactly right my friend.