STATUS OF THE RV
Let us take a step back today and look more seriously at the situation in Iraq.
I quote from one of today’s article:
“is there any sane person who believes that an institution of the size and capabilities of the Iraqi Central Bank goes to patchwork solutions and is not studied within the framework of miserable attempts to raise the value of the Iraqi dinar, and it knows full well, that the fault is not in what is offered from the dollar, but the question: Where does it go and how? That’s the issue!.”
In October 2020, Iraq’s cabinet approved an economic reform agenda known as the “white paper,” which identified over 200 reforms, legislative amendments, subsidy cuts, and e-government measures that are broadly in line with previous World Bank and IMF reform recommendations.
The new prime minister Al-Sudani is following this reform agenda, however for political purposes they do not refer much to the White Paper anymore.
Are they then waiting to complete the White Paper reforms which, if we read the White Paper, we can clearly see these reforms culminate in the currency exchange market (FOREX).
Why pay attention to only this section on page 50?
I know this is a large document with lots to do for Iraq but as I said before Iraq already has the value it needs in its currency.
It is just that the “program rate” now does not reflect a true value.
I know that in 2003 the Iraqi dinar was on the verge of collapse but we are no longer in 2003 and 20 years later much progress in all directions has been made.
So why not pay particular attention to this section and see if any progress has been made in this area.
If you look at items in this section of the White Paper it appears that items 1-5 culminate (happy ending) with item 6 which is opening up the dinar under the umbrella of the securities and exchange commission once again i.e. FOREX.
They get there by working through items 1-5.
So Iraq has achieved various progress in these pieces of items 1-5.
I only hope you can absorb this information today and know that with much confidence the Reinstatement is just around the corner.
We only need to focus on the FACTS and this will give us assurance that the RV and Reinstatement are coming soon but not yet.
I also feel that Iraq may also want to address these 6 items too:
1. PASSING THE CONSTITUTIONAL REQUIREMENT FOR THE OIL AND GAS LAW (referendum)
The first part we already talked about in that the Oil and Gas law and how this is a constitutional requirement.
The political analyst Sabah Al-Ugaili considered, on Sunday, that:
1. Approving the oil and gas law will be Iraq’s safety valve in the next stage, while stressing that
2. Passing the law will work to end all crises that occur regarding the export of Kurdistan’s oil.
Al-Aqili said in an interview with the information agency:
3.”The approval of the law will redraw the road map for the distribution of wealth among all components.
What Iraq needs is overall STABILITY and SECURITY.
So as far as the Oil and Gas law, the Presidency of the House of Representatives announced the start of the second legislative term of the parliament, with the first session to be held next Saturday.
This chapter is expected to settle the situation on the controversial issue related to the governorates’ shares of oil revenues the Oil and Gas law/Hydrogen Carbon Law/Energy Law once and for all.
Let’s just buckle down, relax and pray that Iraq can work it out and pass this damn much needed referendum.
2. IRAQ IN USING ITS OFFICIAL CURRENCY, THE DINAR, TO TRANSFER MONEY TO IRAN AND OTHER COUNTRIES, AS A FREE MARKET CURRENCY
The second issue we also already talked about is how Iraq and Iran want to use the Iraqi dinar for trade between their countries.
Iraq also wants to use the dinar in trade with other middle eastern countries.
This is not just a pipe dream as Iraq is coordinating these agreements as I write this newsletter.
But what will be the response from the US government?
The commercial adviser to the Iranian embassy in Iraq, Abd al-Amir Rabihawi, said that pressure from the US treasury prevents the Iraqi side from using its official currency to transfer money to Iran, forcing it to use the free market currency, which differs by 10% from the official currency and harms Iranian merchants.
How can Iraq possibly RV and Reinstate the dinar if the US does not even support its use in foreign trade with other middle eastern countries never mind the rest of the world.
Yes, the US seems to me to be an obstacle to the RV.
3. DELAY IN OPENING THE BUDGET
The third part to this mystery lies in the budget.
I believe this issue may be the underlying casualty of all these events.
The GOI is being very cautious in opening the budget knowing they cannot yet fully control all the funds.
Why the hurry to get it passed then and then signed into law by the president if you are not going to quickly implement it?
The prime minister himself has told us he is waiting to open the budget.
Then Advisor to the Prime Minister Hisham Al-Rikabi affirmed today, Wednesday, the government’s insistence on carrying out more reforms.
This means he is waiting for some other events to occur.
4. DISMISSAL OF PUBLIC OFFICIALS WHO MANIPULATED PUBLIC MONEY AND THIS IS A CRIME
Could we chalk up yet a fourth event to the reorganizing of his cabinet?
If you read the articles on this topic, you can see that a month ago he claimed he was going to clean out his cabinet from the corrupt.
He was going to wait until the budget situation was resolved.
Now that the budget is law he is moving ahead with this action.
Today I present an article that helps us see more clearly the importance of this move in creating yet more transparency on where and how this budget money is going to be spent.
Now imagine however, if the rate did change and the impact on the budget it would have.
There would be enormous amounts of money to deal with the opportunity for corruption would be rampant.
5. STABILIZE THE DINAR TO THE CBI “OFFICIAL” RATE
There is still yet another issue that is not yet resolved fully and that is the parallel market (black market) for the dinar and the inability to control and stabilize it to the CBI “official” rate.
And I quote from the article- “Al-Karawi said, in an interview with Al-Maalouma, that “the parallel market for selling dollars is still high, and the difference between it and the prices set by the Central Bank is clear, and it is exploited in speculation and perpetuating the price hike in the Iraqi markets.”
But as time went on it became apparent to us investors the dinar was NOT in fact stable as we can see the parallel market rates of 1450, 1490 etc,, compared to the official rate of 1320.
But the good news is that confirmed, on Sunday by the CBI, the existence of a road map of 4 axes to curb the parallel market for selling the dollar.
6. PARLIAMENTARIAN: THE SUCCESS OF ECONOMIC PLANS DEPENDS ON ENDING US DICTATES
On Monday, the representative of the Sadiqun Parliamentary Bloc, Rafik al-Salhi, pledged the government’s success in economic reforms by getting rid of American dictates, accusing the American side of working to sabotage the Iraqi economy by all means.
However, we did see a very recent article that told us they have achieved SECURITY and are now a STABLE country as never before since 2003.
No comments:
Post a Comment