STATUS OF THE RV
I wanted to come on today and discuss a conversation I had with my CBI contact on Saturday. Since I could not arrange a call on Wednesday, as planned, the conversation was extra-long and enlightening. I want to share this conversation with you today. Also I want to share a couple main points today in the progress of the economic reforms in Iraq and their impact. I will anticipate a few questions many of you might be thinking while I go through the news.
So, what did my CBI contact tell me?
To sum up what my CBI contact told me was for investors from the west to relax and not follow every little (or big) event as a target to get the reinstatement of the Iraqi dinar. They watch and read what these conference calls say on the effort of informing people and it simply is not all true. Also we talked about June and so we are well into June already and still no Project to Delete the Zeros. I did not dare ask when it would happen after the lecture I just received …lol..lol..lol.. 😊 Shame, shame on me. My friend and contact does not like it when I ask questions that I should already know the answers to.
In this regard, I was told that the effort to roll out the new ATMs should be an indication of the progress with the project and not to worry as the committee is working closely with the banks to track the ATMs, their locations and to have sufficient supplies of the lower denominations available to load the machines when they distribute them to the banks when ready.
But the majority of the government run banks DO NOT yet even have the newer notes as the CBI just does not hand out FREE money to people, especially worthless notes (at this time). In order for the banks to receive the notes they will have to exchange the 3 zero notes for them. This exchange will happen when and only when the CBI is ready to begin the process of the swap out. This has NOT yet begun. This effort has to be a well calibrated and coordinated event.
I was also reminded once again that June marks a pivotal point as the CBI is moving now into a third phase of their strategic plan. It is a calibrated plan not some random happening of events where the CBI is in a panic mode or reactionary mode all the time. I was told that the dollar prices are coming down as predicted after the EID holiday. Soon they will be inline with the reform plan which is within limits to the “official CBI rate”. This new phase of the plan will run from June to 2026.
Again, I was told that NO insider, backdoor, international trading or otherwise was being conducted on the Iraqi dinar. If you hear rumors of otherwise it is all lies. Investors can come to the ISX and purchased Iraqi dinar at the “official CBI rate”. There is not yet the availability to trade on FOREX or any of the other foreign exchanges. There is still a benchmark on FOREX displaying the ISX rate and a link back to the ISX. Again, this rate may vary by slight fluctuations from the official CBI rate because of some minor responsiveness by some investors and their demand for it. The ISX dinar does float already but is still solely pegged to the dollar. Investors really can’t do much with the dinar at this time as in the west there are still US Treasury sanctions effective on the currency.
I then asked how the rate of the dinar would be determined in the future and if there is another system to be used to determine the rate of the dinar based on all of its newer resources and economic changes. I was then told that “you know and I know that the rate of the dinar is now being artificially suppressed” and that it is the “global order” that is holding the CBI back. I was told that Iraq is in a much better situation now prior to the 1990 embargo and so why not have an international rate again with at least a rate equivalent to the late 1980’s prior to the invasion. Also, it was pointed out that all the UN sanctions are now lifted from Iraq and so why has the US Treasury not also yet lifted their sanctions too on the dinar? So, you see, she said, it is all a political game being played. She said she would leave this game up to the board of directors at the Central Bank as she is just part of a team doing her job. I then thanked her for her opinion in this matter.
She said that her committee was directed to be ready in June and did plan in June to begin the project to delete the zeros but the Central Bank as not yet received the assurances needed in writing from the US Treasury that they would support us fully all the way through the process. To me this meant to conduct the project to delete the zeros, swap out the notes and then onward to the reinstatement of the dinar. I was assured I was correct in my thinking. I already knew this as this was all in the Dr Shabibi plan anyway. This was just a confirmation that they are still closely following this part of the plan anyway. My feeling after this conversation was not negative but it was not so positive either since the US is still holding back and not fully supporting the financial reforms and the events that were supposed to happen at the end of the second phase of the reform process.
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