Can the CBI control the parallel rate?
I know, I know maybe we are all sick and tired already of hearing about this damned parallel rate. But this issue is still not resolved and at the forefront of issues holding back the progress of currency reform. So today in the articles we see more evidence and details for what is at the heart of where the problem stems in not balancing the black market parallel rate with the CBI official rate.
I will discuss this with you again today from yet another angle and I hope everyone get its it now. You can also go out to my 02/01 Newsletter in my archives and read about how oil sales payments as mandated in petro-dollars and what happens when countries decide to get off it.
You can see how manipulative this is and unlawful, this is for the US to demand it of Iraq, especially now since they are a sovereign nation and all their war reparations debt is paid off. Of course, the US always had an excuse to mandate the payments in Petro-dollars, but the excuses are running out and in the past were part of a solution to a situation that they created in the first place (i.e. 2003 war and a 10 year embargo). Get it? Unlike Saudi Arabia who agreed voluntarily to receive revenues in Petro-dollars, in Iraq this is not the case. The Petro-dollar was force upon Iraq and is now ruining Iraq and it is time, as we all can clearly see now, that they must end this cycle. It is causing more harm than good for Iraq. Iraq desperately needs to get off the Petro-dollar.
If Iraq did get off the Petro-dollar it would allow them to accumulate foreign currencies buying their oil. This way Iraq would have these other currencies to pay for imported goods and services.
Where are their foreign reserves besides U.S. Dollars?
Where do they come from now if 90% of the revenue generated from oil is all in US Dollars? Do you see it now, the dilemma?
So either they have to grow their economy to a huge extent and generate all kinds of exports (other than oil) paid to Iraq in foreign currencies (this will take decades to do) or they can switch from the sole Petro-dollars for oil and collect other foreign currencies for their oil revenue. Thus to obtain the needed foreign reserves to use to pay for imports. But the overriding question is – Do you think the US is going to let them get off the Petro-dollar any time soon? I have to tell you at least for now the GOI and Parliament are openly talking about it and the pressure is on.
There is yet another very interesting article also in today’s news that tells us something.
The former director of the Financial Supervision Bureau and expert in economic and financial affairs, Salah Nouri, “confirmed that the difference between the official and parallel prices of the dollar is normal” and “Given the unstable international situation, including the possibility of a drop in oil selling prices, and the US Federal Reserve’s emphasis on monitoring foreign transfers and the threat of sanctions, all of this encourages an increase in the dollar exchange rate.”
It appears we have two conflicting opinions on stabilizing the parallel rate. One says it is normal but it does not say it is not a problem for Iraq. Yes, just normal for the global situation now in the middle east. So, one might conclude hat if the situation in the middle east changes the CBI might be able to better control the parallel rate according to the measures already in place.
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