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Monetary policy..fixed rate or partly floating?


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Can anyone make head or tail of this?  It's dated today, but they reference 2012, 2013, 2014.

Monetary policy..fixed rate or partly floating?

July 3, 2018

23620182035200_1200px-ADIL_ABD_AL-MAHDI_7/2/2018 7:47:23 PM

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Adel Abdul Mahdi
 

I have repeatedly written about the absurdity of the survival of the trillions of dinars outside the banking cycle, or frozen in banks, which instead of encouraging them to enter the banking cycle and turned them into investments and instruments for the stability of the monetary markets, exaggerated by the repressive measures, keen on the philosophy and loss of dinars.The economy has interests, relations and rights, governed by the laws of its interior rather than its appearance, moving towards points of attraction and escaping the points of danger .. This is why the nations are keen to increase the factors of encouragement and temptation, and resort mainly to the deterrent controls produced by the self-immunity of the movement of these laws, about her. We have repeatedly proposed adopting an encouraging vision in tax accounting and financial facilities, protecting money from arbitrary measures to escape, and eliminating the economy of the currency, the cash economy, which is the most important tool of corruption, which we talk about long. The rationality of rent and the rigidity of economic thought and its limited budget and collection, loans and foreign parts, and the neglect of real economic tools, put us in a vicious cycle of crises and lures and corruption .. Which leads us to more dependency and import and weak production and increase unemployment, I recently received a detailed report written by the end of 2014 one of the financial experts of one of the major banks, I saw useful publication of the most important paragraphs:
“There are three types of exchange rate: fixed (Iraq) .. Fully floating or moving (determined by market factors entirely) .. And partially or creeping (Lebanon) In order to determine the most appropriate system, the main economic indicators of the Iraqi economy should be: 44 billion dollars in the balance of trade, and surplus in the balance of payments about 30 billion dollars at the end of 2012 .. b) total foreign exchange reserves $ 71 billion at the end of 2013 .. c) the value of the monetary mass MO (paper and metal) ) M2 (M2 + demand deposits + mobile savings accounts) is about 73 billion.
Based on the assumption that 30% of the M2 will be available to citizens for daily expenses. This figure, according to the figures above, will be $ 22 billion. It is not used to buy the dollar and therefore does not constitute a demand for it. Some measures can be proposed to absorb liquidity: The disclosure of bank accounts and freezing them for reasons not related to the specific cases specified will contribute to the flight of capital from banks, And keep them in cash, constitute x (C) Issuance of treasury bonds to the public, which are subscribed by banks with a nominal nominal value of one bond, with periods ranging from one to two years, with attractive interest, to absorb up to $ 20 billion of the size of the monetary mass.
The Central Bank shall determine the price of the dollar, for example, 1170 for buying, and 1200 dinars for sale. B) The Central Bank shall release the market of the pieces and leave the banks and customers free to sell and buy. C) The Central Bank shall intervene or sell when the price is touched. The Central Bank reserves control of the market, especially in light of the presence of a cash mass of more than 23 billion dollars. In addition to other measures such as controlling the movement of money through border crossings, and encouraging citizens to deposit their savings in banks, And easing of strict measures, in the neighborhood Money Traceability can be tracked and moved. ”

Edited by Floridian
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Okay, I'm understanding it better, after reading it several times over.

What I don't get is - Why are they just now talking about "fixed rate or partly floating"?

 

You would think, if they were about to RV, that part would be figured out already.

Maybe they are aiming for January 1, 2019.  :shrug:

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Hmmm. . . . Sinkers & Floaters in the Finance Arena.

 

They’re gonna talk about this into 2019 IMHO - it takes these folks a very long time to chew on anything before the actually DO anything - it’s just the way things are with these people. The CBI might be ready: who the hell knows anymore. 

The IMF stated a long time ago 2019 was the suggested year for all things to come together and push the button- maybe this is where we’re headed ?

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All talk from the columnist and no action means nothing.  Same thing here in the good ole USofA.  Talking heads are a dime a dozen and just because they convey their opinion don't mean squat.  Until there is movement in the CBI or GOI columnist can spew all they want and still not mean anything.  I respect the fact that the information is getting out but is anyone really paying attention.  :twocents:

 

SR

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2 hours ago, 10 YEARS LATER said:

Hmmm. . . . Sinkers & Floaters in the Finance Arena.

 

They’re gonna talk about this into 2019 IMHO - it takes these folks a very long time to chew on anything before the actually DO anything - it’s just the way things are with these people. The CBI might be ready: who the hell knows anymore. 

The IMF stated a long time ago 2019 was the suggested year for all things to come together and push the button- maybe this is where we’re headed ?

I defo think 2019

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1 hour ago, SupraRacer said:

All talk from the columnist and no action means nothing.  Same thing here in the good ole USofA.  Talking heads are a dime a dozen and just because they convey their opinion don't mean squat.  Until there is movement in the CBI or GOI columnist can spew all they want and still not mean anything.  I respect the fact that the information is getting out but is anyone really paying attention.  :twocents:

 

SR

 

Mahda is not just a columnist, nor a talking head, and is a familiar name to Iraqi media followers:

 

From Wikipedia

 

Adil Abdul-Mahdi  is an Iraqi Shi'a politicianeconomist, and was one of the Vice Presidents of Iraq from 2005 to 2011. He was formerly served as the Finance Minister in the Interim government and Oil Minister from 2014 to 2016.[3]

 

He is a trained economist who left Iraq in 1969 for exile in France. He worked for French think tanks and edited magazines in French and Arabic. He was educated in France, and is the son of a respected Shiite cleric who was a minister in Iraq's monarchy. He attended high school at Baghdad College, an elite American Jesuit secondary school.

Edited by Carrello
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Carrello….thanks for the assessment.

 

Florida....Mr. Mahdi is simply stating his opinion as to what he sees as 3 possible options for the currency in the future. Nowhere in that did I read 'continue the auctions'.  No doubt the CBI in conjunction with the MOF, IMF, UST already have a rock solid plan and are working towards that. Between now and a substantial rate change, we are going to see hundreds of articles on what 'should or could' be done. Relax. It's out of our hands. The sky is NOT falling.

                                                                                                                                                        :rolleyes:

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33 minutes ago, King Bean said:

Carrello….thanks for the assessment.

 

Florida....Mr. Mahdi is simply stating his opinion as to what he sees as 3 possible options for the currency in the future. Nowhere in that did I read 'continue the auctions'.  No doubt the CBI in conjunction with the MOF, IMF, UST already have a rock solid plan and are working towards that. Between now and a substantial rate change, we are going to see hundreds of articles on what 'should or could' be done. Relax. It's out of our hands. The sky is NOT falling.

                                                                                                                                                        :rolleyes:

Would have to agree here - stating his option,

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1 hour ago, Carrello said:

 

Mahda is not just a columnist, nor a talking head, and is a familiar name to Iraqi media followers:

 

From Wikipedia

 

Adil Abdul-Mahdi  is an Iraqi Shi'a politicianeconomist, and was one of the Vice Presidents of Iraq from 2005 to 2011. He was formerly served as the Finance Minister in the Interim government and Oil Minister from 2014 to 2016.[3]

 

He is a trained economist who left Iraq in 1969 for exile in France. He worked for French think tanks and edited magazines in French and Arabic. He was educated in France, and is the son of a respected Shiite cleric who was a minister in Iraq's monarchy. He attended high school at Baghdad College, an elite American Jesuit secondary school.

 

Thank you ma'am for the insight.  :tiphat:Does he still have any influence with the CBI or GOI??  If so maybe they will be bold enough to push this over the finish line.

 

SR

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Guy's I'm not sure if this is not an older article rebooted.  Abdul Mahdi is  a good economist, but in recent years has been pretty silent on monetary reform.  IMO, if this were a recent article, Mahdi would have given kudos to the CBI and the strides taken in Iraq's monetary policy.  He would have talked bout the inclusion and it's affect on Chunky money.  Notice the sell rate of 1170.  The CBI UNTIL RECENTLY HAS HELD A SELL RATE OF 1184 FOR A COUPLE OF YEARS.   No way to prove but I think it's an old article.

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2 hours ago, SupraRacer said:

All talk from the columnist and no action means nothing.  Same thing here in the good ole USofA.  Talking heads are a dime a dozen and just because they convey their opinion don't mean squat.  Until there is movement in the CBI or GOI columnist can spew all they want and still not mean anything.  I respect the fact that the information is getting out but is anyone really paying attention.  :twocents:

 

SR

 

Adil Abdul-Mahdi al-Muntafiki (Arabicعادل عبد المهدي المنتفكي‎) is an Iraqi Shi'a politicianeconomist, and was one of the Vice Presidents of Iraq from 2005 to 2011. He was formerly served as the Finance Minister in the Interim government and Oil Minister from 2014 to 2016.[3]

Abdel-Mahdi is a member of the powerful Shi'a party the Supreme Islamic Iraqi Council, or SIIC. Long based in neighboring Iran, the group opposed a United States administration while holding close ties with the other U.S.-backed groups that opposed Saddam Hussein, including the Kurds and the Iraqi National Congress.

Edited by Butifldrm
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4 hours ago, Floridian said:

Okay, I'm understanding it better, after reading it several times over.

What I don't get is - Why are they just now talking about "fixed rate or partly floating"?

 

You would think, if they were about to RV, that part would be figured out already.

Maybe they are aiming for January 1, 2019.  :shrug:

I think it will come out at a fixed price and hen be allowed to float or managed float from there. JMHO.

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14 minutes ago, SupraRacer said:

 

Thank you ma'am for the insight.  :tiphat:Does he still have any influence with the CBI or GOI??  If so maybe they will be bold enough to push this over the finish line.

 

SR

SR, you are welcome. Mahdi is well respected as a politician and an economist, and is well educated. The CBI has had a list of "Honey Dos" compiled by the IMF and UST for years, reaching milestone and moving to the next. The CBI is in IMF trusteeship and the UST moved into the CBI penthouse a few years back. IMHO when the IMF and the UST tell CBI to pull the lever, we will see what we have been waiting for. The GOI is the last group that has any influence on this. As I said a while back, I believe that the only thing the GOI has to say about this in general is that they approve the budget for currency printing. 

 

I am not one that believes the HCL or 140 are not needed to be completed prior to the RV. Governments always have issues and Iraq's will go on for years. Security and stability are important for the RV but I don't agree that the HCL and 140 add to that for a currency event. Call me wacky!  Have a celebratory and safe Fourth of July.  😎

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15 minutes ago, Butifldrm said:

Guy's I'm not sure if this is not an older article rebooted.  Abdul Mahdi is  a good economist, but in recent years has been pretty silent on monetary reform.  IMO, if this were a recent article, Mahdi would have given kudos to the CBI and the strides taken in Iraq's monetary policy.  He would have talked bout the inclusion and it's affect on Chunky money.  Notice the sell rate of 1170.  The CBI UNTIL RECENTLY HAS HELD A SELL RATE OF 1184 FOR A COUPLE OF YEARS.   No way to prove but I think it's an old article.

 

I tend to agree.  After rereading it, it does seem to be referring to 2014 and nothing after.  One would think that a person in Mahdi's position would have had plenty to say about what all the CBI has done in the past year.

 

5 hours ago, Floridian said:

There are three types of exchange rate: fixed (Iraq) .. Fully floating or moving (determined by market factors entirely) .. And partially or creeping (Lebanon)

 

4 hours ago, Carrello said:

Looks to me to be an educational piece from Mahdi, a well respected guy who has been around for a while. 

 

This does give conception that this is an education to new GOI of sorts as to what they need to look at even though the CBI has the ultimate decision on the rate and how to implement it.

 

SR

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3 minutes ago, Carrello said:

SR, you are welcome. Mahdi is well respected as a politician and an economist, and is well educated. The CBI has had a list of "Honey Dos" compiled by the IMF and UST for years, reaching milestone and moving to the next. The CBI is in IMF trusteeship and the UST moved into the CBI penthouse a few years back. IMHO when the IMF and the UST tell CBI to pull the lever, we will see what we have been waiting for. The GOI is the last group that has any influence on this. As I said a while back, I believe that the only thing the GOI has to say about this in general is that they approve the budget for currency printing. 

 

I am not one that believes the HCL or 140 are not needed to be completed prior to the RV. Governments always have issues and Iraq's will go on for years. Security and stability are important for the RV but I don't agree that the HCL and 140 add to that for a currency event. Call me wacky!  Have a celebratory and safe Fourth of July.  😎

 

Thanks.  And you have a safe and relaxing Fourth of July as well.

 

SR

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Here is another good article. Sorry I can't highlight on this device. Feel free to move this to a better spot!

 

What are the economic objectives of economic diversification?

%D8%A7%D9%84%D8%A7%D9%82%D8%AA%D8%B5%D8%

 

part One

 

Hamed Abdul Hussein Khudair Jubouri

 

Al Furat Center for Development and Strategic Studies

 

The diversification of economic resources and the increasing number of sources of income are increasing in studies, seminars and conferences in monopolistic countries that depend on one supplier, especially in the oil countries, because diversification is of great importance to the characterization and sustainability of the economy. On the one hand, and meet the requirements of the community on the other.

 

The work on achieving economic diversification lies in the achievement of several economic, social and strategic goals, which seek to achieve them and can be summarized in successive articles, and we will limit this article to the economic goals. There are many economic goals that economic diversification seeks to achieve, but some will be mentioned as follows:

 

Sustainable economic growth

 

Economic growth is one of the main objectives that all economies seek to achieve and increase their rates constantly because of the great importance that is reflected in many economic, social, political and other variables, and to have a positive impact on these variables must be real economic growth and not imaginary As is the case in most rental countries, as a result of possessing vast mineral wealth in conjunction with the absence of efficient management and the real will and loss of strategic dimensions that make the image of the future now available to work towards achieving.

 

The objective of economic diversification in the one-source countries is to strengthen economic growth, where economic growth is known to increase the production of goods and services regardless of its components, but in the monolithic countries, especially oil, economic growth depends on the production and increase of oil, economic growth is unstable and not durable and long lasting , Because it depends on one source is exposed to the risks of fluctuations in prices as a global commodity can not be controlled by its producers, and therefore the diversification of economic diversification of sources of economic growth so as to avoid and compensate for what could lead to the collapse of growth if the Ka The source is alone, and diversification makes growth robust and resistant to collapse.

 

B. Financial Sustainability

 

The financing of diversified fiscal requirements by relying on a single financial resource or very limited resources, especially if they are rentable, can not be achieved. Even if this funding is met to meet diverse fiscal requirements, it is only in the short or perhaps medium term, In addition to the negative effects it has on the economy, known as the phenomenon of Dutch disease, which increases the fragility of the economy and low competitiveness in world markets.

 

The single resource or very limited resources, especially rent, are international strategic resources, which are internationally controlled and can not be controlled by the producing State individually, that is, beyond their control and thus can not be controlled in the way that serves their interests They are unstable for a long time, fluctuating between rise and fall, depending on international, economic and climatic changes.

 

As a result of the adoption of the financial vernacular on a very large, this is why the public finances are also experiencing the volatility that affects their revenues, especially on which they depend very heavily, and this affects the programs of the Convention or resort to unusual revenues such as loans or new cash issue or aid And international grants, which means that the state does not enjoy financial sustainability. It is unreasonable to rely on them for a long time, so the search by the state on the revenues of the ability to continuity, to finance its activities immediate and future without recourse to debt and other burdens of the state and subsequent generations, through raising the efficiency of public expenditure and diversify the sources of revenue and support and direct them directly to their beneficiaries [ii].

 

As financial sustainability can not be achieved under a single-resource or very limited economy, financial sustainability has become one of the objectives of economic diversification.

Improving foreign trade

 

Economic diversification aims to improve foreign trade in exports and imports. The dependence of the economy on one resource or very limited resources in dealing with the external factor in terms of exports, while relying on the outside world to meet its domestic requirements in a variety of ways, And this leaves them with the imbalance. This leaves many negative effects on the economy as a whole, such as the depletion of limited and unreliable resources reserves, foreign reserves, low competitiveness of national products, increased unemployment, etc.

 

Therefore, avoiding these effects of the disruption of foreign trade on the economy as a result of dependence on a single source of export and import varied, lies in improving the performance of foreign trade through the elimination of unilateral exports and work to diversify them and reduce imports and work to raise the quality of the import of goods and services that contribute In economic development, in addition to importing goods that do not have comparative advantage.

 

Since the achievement of diversification of exports and unilateral imports can not be achieved without the existence of economic diversification and the improvement of foreign trade is one of the objectives of economic diversification because it will address many of the problems that take place under the monopolization of the economy.

 

What to do before economic diversification

 

Going to achieve economic diversification in a single economy can not be achieved in the absence of the conditions for launching the process of economic diversification, which is often expressed as "investment climate" or "investment environment", which means providing all that encourages the investor to invest in the economy Infrastructure, roads, bridges, airports, etc., as well as the importance of providing human capital that contributes effectively to economic diversification.

 

The absence of an investment climate will complicate economic diversification and make it more difficult to implement it on the ground. The investor does not invest in a country that does not provide him with the facilities, privileges and guarantees. If he invests in the absence of an investment climate, Costs and may be bankrupt and forced to refrain from investing in this country and in this case did not lose the investor to the extent that deprives the country of the character of the durability of its economy and the loss of mechanisms of confrontation is trapped in economic dependence.

 

In addition to the importance of providing an investment climate to achieve economic diversification, we must work on two important things:

 

First: activating the private sector in the management of the economy, but after entering the country as a participant in the management of the economy so that he can later be able to manage it on its own, while maintaining the supervision of the state to ensure that it does not go out of the public interest of the country, .

 

Second, attention to the management of national wealth, which is the basis of the unilateral economy, on the basis of ensuring economic justice between generations, being limited to one generation without another and one individual without another is unacceptable to economic logic. Moreover, the absence of economic justice for national wealth Contributes to the occurrence of conflicts, coups and wars, which is unacceptable to social and political logic.

............................

Sources

means the financial situation in which the State is able to continue its existing tunnel and revenue policies in the long run without reducing its future financial programming for all its facilities, bankruptcy, or non-fulfillment of its future financial obligations. Abdul-Jabbar Al-Nouri, "Financial Sustainability and the Iraqi Economy", published at: http://www.iraqakhbar.com/iraq-news/652903[2] Heba Abdel Moneim, The Performance of Arab Economies over the Past Two Decades: Stability Profiles and Policies, Arab Monetary Fund, January 2012, p. 8.

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2 hours ago, King Bean said:

Carrello….thanks for the assessment.

 

Florida....Mr. Mahdi is simply stating his opinion as to what he sees as 3 possible options for the currency in the future. Nowhere in that did I read 'continue the auctions'.  No doubt the CBI in conjunction with the MOF, IMF, UST already have a rock solid plan and are working towards that. Between now and a substantial rate change, we are going to see hundreds of articles on what 'should or could' be done. Relax. It's out of our hands. The sky is NOT falling.

                                                                                                                                                        :rolleyes:

 

KB, I didn't say "continue the auctions".  Rhona said it.  Look a few posts up.  😂

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3 hours ago, dinarbeleiver said:

form the government

accept article 8

stop auctions

implement the oil and gas law

educate the public about the smaller denoms

Bang the RV happens

Agreed - sounds straight forward enough but a Pretty Tall Order DB for folks that take 2 steps forward and 3 backwards-Happy Thoughts, Think Happy Thoughts . . . I remain cautiously optimistic. 

Have a Great 4th DB ! 

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