STATUS OF THE RV
In summary the process begins in Iraq with the project to delete the zeros.
Once they complete this project they must wait and watch for inflation (1 -2 weeks), then if all goes well, they will trigger the reinstatement to FOREX.
A member of the Parliamentary Finance Committee, Muhammad Nuri, on Saturday accused the CBI of the failure to control the exchange rate of the dollar against the Iraqi dinar.
The daily auction amounts are still over 200 (220-250) and should be around only 150 only to support the economy, so we have been told.
Okay so first I ask – why are they including these extra expenses like tuition, travel money, etc into this currency auction amount when they DO NOT go through the electronic system?
Next it is so obvious these dollars are not in fact being used for the intended purposes such as tuition, travel money, etc. and it getting in the hands of the illegal black market money exchangers who make up the so-called parallel market.
Yes, the receivers of these dollars get them at 1320, then mark them up and sell them to the parallel market.
They then mark them up again and this is why the parallel market rate stays so high (1500-1700).
This is why they have a difficult time managing it.
These are the guys forcing the rate of the dollar (inside Iraq) to stay high and dinar to stay lower.
I quote from one of today’s articles – “ The gateway to smuggling currency is still continuing by the parties and their banks, with the increase in the sale of the dollar by the Central Bank of Iraq.”
But there are other issues too as to the leaking of dollars into the black market (parallel market) and there is a very good article today that explains the situation well.
The CBI must control the stability of the dinar exchange rate against the dollar on the black market.
This is key to the next rate change they have to make to get the rate down to where they need it to around 1000.
Remember in 2012 DR Shabibi had it at 1166 when he had the green light to reinstate.
So they are telling us with the budget implementation and other clean up measures (or reforms) on the dollar will end the dollar in Iraq and will result in and I quote from the article – “a gradual recovery of the dinar and that the rise in the exchange rate of the dollar is temporary, and will inevitably decrease back to the target rate of the central bank in Iraq.”
I think they mean back-on-track to obtaining their “target rate”?
So there is a target rate of the dinar they are still aiming for and the 1320 is not the end to the saga.
These are the key factors that I see the CBI aiming for:
Currency Auctions for sale of dollars to match needed imports S/B about 150 million per day, REDUCE DOWN FROM 220-250 MILLION PER DAY;
One more rate change, probably to around just over or under 1000 depending on how good their reforms work.
The closer or over 1000 the better.
Regaining their full sovereignty with the US banks since Iraqi is legally and fully out of UN Chapter VII.
The pressure continues and will not end until they get their way;
The release of all US combat troops from Iraq.
Combat troops masquerading as advisors or trainers are still combat troops.
Announce the full accession of Iraq into the WTO
The 2023-2025 Budget Saga Update
I know the funding to complete the changeover of the currency from the 3 zero notes to the lower denominations (project to delete the zeros) is in the budget year for 2023.
We know this is the precursor to the reinstatement.
Maybe this is why they are stalling so much.
They want to know that if they do the project to delete the zeros, they will have a high level of assurance that the US and the IMF will give them the “green light” and mean it this time and support it.
OIL & GAS LAW SAGA UPDATE
Baghdad and Erbil negotiations on the oil and gas law continue, amid a parliamentary and GOI movement to pass through the law in the current legislative term, while the Parliamentary Legal Committee resolves the controversy over the law and the date of its arrival in parliament.
Economist, Nabil Al-Marsoumi, identified five points that are impeding its approval:
1. Giving the region licensing authority in the field of exploration and development of discovered undeveloped fields;
2. The major disagreement over the interpretation of Article (112/First) of the constitution;
3. The negotiating role of the Federal Oil and Gas Council and its tasks;
4. The loss of a unified central policy that drives competition;
5. The disagreement between the National Oil Company and between the regions and governorates
At least they are now taking the constitutionally needed Oil and Gas referendum seriously and diligently working on it and want to get it done.
Yes, there is a strong desire to finally to get it done.
It is because they were told to get it done to protect their oil revenues, which is still over 90 % of their wealth.
There are next steps to financial security for their country they must take prior to getting all other alternative energy sources coming online and being utilized.
