STATUS OF THE RV
Yet more proof that Iraqi’s economy does not need to grow any more at this time in order to get to the value of the dinar to what we need for a fair and honest rate reflected.
I quote from one of today’s articles – “The Prime Minister’s philosophy confirms that economic reform cannot be achieved without reforming the banking system, and therefore the priority begins with reforming the financial system.”
Remember I have been telling you about this in the “White Paper” (a set of comprehensive reforms in 3 areas, stock market, banking and finance).
The article is referring to the pillars of financial reform for Iraq and starts with the banking and financial reforms.
It says the currency reform is a priority as it is all part of the effort of the financial reforms.
Iraq will never be able to raise enough the money alone to rebuild Iraq and its economy unless they first complete the needed banking and financial reforms needed to attract investors.
This discussion of the sanctions on Iraq and their impacts, bring us to yet another very interesting article in today’s news.
I quote from the heading of the article – “ADVISER TO THE PRIME MINISTER: ECONOMIC POLICY IN IRAQ IS MOVING TOWARDS IMPLEMENTING THE PRINCIPLE OF MONETARY SOVEREIGNTY” .
It tells us flat right out in the open that Iraq is about to take complete control over their currency again.
What are the ramifications of their new, soon to be “monetary sovereignty”?
Monetary sovereignty is the power of the state to exercise exclusive legal control over its currency, broadly defined, by exercise of the following powers:
• Legal tender – the exclusive authority to designate the legal tender forms of payment.
• Issuance and retirement – the exclusive authority to control the issuance and retirement of the legal tender.
The financial advisor to the prime minister Saleh, goes on to say in the article and I quote again- “confirmed today, Tuesday, that the economic policy in Iraq is moving towards implementing the principle of monetary sovereignty.
This has reinstatement and RV written all over this statement.
Then Saleh goes on to say more and I quote – “A country other than the dinar with in-country pricing; because monetary duality has harmed the economy. ”
He then went on point out and I quote – “at the same time that there is a tendency to diversify currencies for travel purposes and not be limited to the dollar.”
Folks he is talking about the program rate and how it has harmed the Iraqi dinar or any countries currency when they use this same tactic to sole peg any currency just to the dollar.
He goes on to say it has to be changed from a sole peg to a diversity of currencies.
Again they basket of currencies that is coming as their new dinar peg.
I also showed you other articles in the past weeks on this diversity of currencies and so we know the re-peg of the dinar is coming shortly.
The rate has to reflect the TRUE rate of the value of the assets Iraq now holds.
Not the value of an intentional, sanctioned, suppressed currency.
Why would they even bother to do all this work for the banking, financial and currency reforms if they were just going to leave the rate at 1/6 of a penny?
So ,what we talked about first was the announcement of the accession to the WTO.
I was told it was scheduled for last week but is delayed for some time in December and maybe even in January.
It will not be announced until the reinstatement occurs.
Next, I was told the project to delete the zeros is on track for the month of December but they would not give me a more definite date.
They told me the committee is now working on the re-education program to the citizens teaching them how the dinar will be changed in the near future.
I was told they could not push out the education of the newer lower denominations and swap out until it is happening and the currency swap is in full motion.
This is new to me since I always thought they would do this months prior.
But this is going to be close to the actual events.
I was told there would be a certain designated time period to bring in the dollars and swap them out for “electronic dinars” at the banks.
After this period the dollar would still be accepted but the rate would be much worst for the dollar as the dinar would climb.
Speaking of electronic banking, I asked about this in more detail.
I said that I read so many articles over the last 17 year about the Point of Sale (POS) for merchants and electronic banking.
But why has Iraq not yet converted?
I was told that the equipment is expensive and someone has to wire and hook it all up.
I was reminded that Iraq is backwards to the developed countries and never had these devices before.
I was told that the CBI funded many devices initially and paid work teams even to wire and install them.
But these funds ran out and not everyone was connected.
Some merchants still also like to have hard currency and coins in their hands and are reluctant to take advantage of the latest technology thus the CBI has to sell them on the idea.
But it is all working and only takes time.
This process will not stop or holdup the currency reform that is coming as there are already many more merchants who are connected than not.
The contact also told me that the rate is going to change very soon but not backwards only forwards, meaning to go up in value and not down.
I was also told that as an investor we will like the final rate.
Again, it was emphasized to me that there would first be an in-country rate (close to USD 1 to IQD 1) during the swap-out in Iraq of the three zero notes and then later a new rate once the dinar is liberated back to the foreign currency exchanges and re-pegged.
At this point the in-country rate goes away.
There will NEVER be two rates.
When the in-country rate comes out there is little we, as investors, can do to exchange and our turn-out will come later, if we so choose to give up our dinars.
My contact then shared something with me that was curious but not amazing to me.
It said that no matter what you hear on your news in your country do not expect any FOREX until at the earliest in early 2024.