Friday, May 31, 2024
"EDDIE TOLD ME, THE WORLD BANK IS ON IRAQIYA TV NEWS DISCUSSING THE CHANGES OF THE IQD EXCHANGE RATE!!!" BY FRANK26, 31 MAY
KTFA
FRANK26:"EDDIE TOLD ME, THE WORLD BANK IS ON IRAQIYA TV NEWS DISCUSSING THE CHANGES OF THE IQD EXCHANGE RATE!!!"............F26
Professor Frank Gunter launches a new white paper on de dollarisation of Iraqi economy.
29th May 2024
‘Two Cheers for Iraq: The Dinar – Dollar Exchange Rate Challenges’
Professor Frank Gunter publishes a new paper commissioned as part of a series by IBBC’s advisory council on the challenges of de-dollarisation for Iraq. The Advisory Council members and IBBC members have actively contributed to the paper in the past 4 months. It will be presented online on the 18th June in a webinar and in person at the Spring Conference on 2nd July. The Arabic translation will be published soon.
He writes ‘All three of these forces – the anti-corruption effort, the banking liberalization, and the lavish 2023-2025 budget – will create challenges for the management of the dinar exchange rate. One could argue that over the last two decades the Government of Iraq (GoI) had little control over its exchange rate; that exchange rate policy was determined by other sectors of the political economy in Iraq. But even if this is true, the level of the exchange rate and changes in that level are believed by many Iraqis and foreigners as providing valuable insight into the quality of economic management in Iraq. This importance is exemplified by the current efforts to de-dollarize the Iraqi economy while there is excess demand for dollars. This excess demand is shown by a parallel exchange rate of roughly 1500 dinars per dollar compared to the official exchange rate of 1310 dinars per dollar.
An important cause of this exchange rate gap is that the GoI, with the strong encouragement of the U.S. Federal Reserve, is attempting to reduce the use of the U.S. dollar in both Iraq’s internal economy and its external transactions. Since 2003, the U.S. dollar has facilitated economic growth in Iraq by providing a widely accepted medium of exchange for purchases as well as a reliable store of value for savings. In the long run, whether de-dollarization will have a significant adverse impact on the Iraq economy will depend on how rapidly the GoI can increase both the efficiency of alternative mediums of exchange and the perceived security of alternative stores of value.’
The report is available here to download.
"RV UPDATE" BY CLARE, 31 MAY
Clare
Article: "Economist: The budget is not affected by the dollar exchange rates... and explains why" Quote: "...because Iraq will receive the dollar from oil exports, and on the contrary, revenues increase with the increase in dollar prices globally...market obligations are dealt with in the Iraqi dinar, and there is no dealing in the dollar, and the budget is built primarily on the Iraqi dinar and not on the dollar, so the budget is never affected by the dollar exchange rates.”
Article "The Central Bank of Iraq "denies" issuing a currency in the category of (100) thousand dinars" Quote "The Central Bank of Iraq denies issuing a new currency in the denomination of (100) thousand dinars, indicating that the image of the new currency circulated on social networking sites is a “fake” image bearing the image of the late Iraqi architect Zaha Hadid"
Article: "In light of the Middle East conflict, the World Bank expects oil prices to exceed $100" Quote: "The bank said in a report published today that a severe price disruption could lead to oil prices exceeding $100 per barrel, which would increase inflation in 2024 by about one percentage point."
Article: "Notice on the Continuation of the National Emergency With Respect to the Stabilization of Iraq"
Quote: "The obstacles to the orderly reconstruction of Iraq, the restoration and maintenance of peace and security in the country, and the development of political, administrative, and economic institutions in Iraq continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States...I am continuing for 1 year the national emergency with respect to the stabilization of Iraq declared in Executive Order 13303."
Article: "The Central Bank begins the second phase of its banking reform strategy"
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"BARZANI SHOULDER TO SHOULDER WITH SUDANI... VAMONOS!!!" BY FRANK26, 31 MAY
KTFA
FRANK26: "BARZANI SHOULDER TO SHOULDER WITH SUDANI... VAMONOS!!!".....F26
Kurdistan Natural Resources confirms: We are ready to visit Baghdad again to resume exporting the region’s oil
5/29/2023
The Ministry of Natural Resources in the Kurdistan Regional Government confirmed, this evening, Wednesday, its readiness to visit the capital, Baghdad, again to solve the problem of resuming the export of the region’s oil, in cooperation with the Federal Ministry of Oil.
The ministry said in a statement received by Shafaq News Agency, “We supported from the beginning resolving the issue as quickly as possible and exporting oil (Kurdistan Region oil) through international ports. For this purpose, we visited Baghdad several times, and in January of this year we met with the head of the committee.” Finance and the Federal Government Committee consisting of the Ministries of Oil, Planning and Finance, and a report was signed in this regard.”----
She added, "The committee last met on the 19th and 20th of this month in the presence of representatives of the Ministry of Natural Resources. We are now awaiting the results of the committee meeting, and are ready to visit Baghdad next week to resolve this issue."
Yesterday, Tuesday, the Federal Ministry of Oil, the Ministry of Natural Resources and companies operating in the Kurdistan Region called for an “emergency” meeting in the capital, Baghdad, for the purpose of accelerating the restoration of production in the region’s fields.
Federal Oil said in a statement received by Shafaq News Agency, that it is keen to restore production in the fields located in the Kurdistan Region and resume exports through the northern system in a way that provides the national interest.
The Ministry called on the Ministry of Natural Resources in the region and the international companies operating the fields located in the region to hold a meeting in Baghdad as soon as possible for the purpose of discussing and discussing the issue and reaching an agreement to accelerate the restart of production and resume the export of oil produced through the Turkish port of Ceyhan and according to the quantities specified in the budget law.
LINK
"RV UPDATE" BY PIMPY, 31 MAY
Pimpy
Article: "Economist: The budget is not affected but dollar exchange rates. And explain the reason" The person is saying the budget is never affected by the dollar exchange rate because the budget is based on Iraqi dinars.
Article: Central Bank of Iraq quote "There are no current plans to print new currency."
What that tells me is people don't have to worry about a lop or redenomination because in order for you to have a redenomination or a lop you have to create new currencies. It also tells me they're not creating the lower denominations which means they're going to stick with the currency they currently have. Some people see this as the glass half full. Some people look at it as the glass is half empty.
I agree it's going to happen. I don't have doubt about that. I'm just keeping an eye on whether or not they want to delete the zeros. If they go to a free floating market hopefully there won't be...deleting the zeros and we'll see the exchange rate go up pretty quick before they have time to respond...
Iraq was already a member of the World Trade Organization. They are going through the ascension process for a second time. That's because all the rules, regulations, understandings and business practices...changed once the fall of Saddam Hussein. Now we have to make sure all their practices, rules and regulations regarding trade line up once again with the World Trade Organization. Iraq has been a member of the World Trade Organization since 2004. This is their second time throughout the ascension process...
There's this misconception that the World Bank, IMF and the BIS get to tell countries what to do. They don't...They facilitate. They make recommendations but they don't control a country's bank..---- .
Another budget is getting ready to come and go and there is no talk of the rate change. Isn't that what they told you? It would be in the new budget because there was no way for them to do large projects, there was no way for them to move forward without an exchange rate change...Why so secret now? Is this one of those things they're trying to keep from the people?
They didn't keep it from the people last time [they increased the value] and there's no mention of it this time...Keep your fingers crossed, it hasn't passed yet so maybe they'll change it between now and the time they pass it...You guys know what I think.
Floating the currency means the value is determined by the market, so if people for whatever reason want to start investing in the Iraqi dinar and the start buying up the Iraqi dinar that means the demand for it is there, think supply and demand.
Since they have a liquidity issue, there's not going to have a lot of Iraqi dinar out there and if that's the case then they don't have the supply to feed the demand...But we'll be more than happy to sell our Iraqi dinar back to them if they get the exchange rate up around a quarter or more. I know I would.
https://dinarevaluation.blogspot.com/2024/05/rv-update-by-pimpy-24-may.html
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