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DetroittoAZ
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Haha, The name of the movie is "Hit & Run".
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By: Omar al-Shaher for Al-Monitor Iraq Pulse. posted on Wed, Jan 2.
Sinan al-Shabibi, the former governor of Iraq’s Central Bank — the highest monetary authority in the country — was not the only banker who made it onto the wanted list in Baghdad. Hussein al-Uzri, the former head of the state-owned Trade Bank, preceded Shabibi.
About This Article
Summary :
In the midst of ongoing political disputes within Iraq, the country’s central bank is facing a number of problems, writes Omar al-Shaher.
Author: Omar al-Shaher
posted on: Wed, Jan 2, 2013
Categories : Originals Iraq
Both bankers are, maybe by complete happenstance, friends with the prominent banker and politician Ahmed Chalabi, who went from being one of Iraqi Prime Minister Nouri al-Maliki’s supporters to one of his opponents. Perhaps it is also a coincidence that he happened to take on substantial roles in the process of redeveloping the Iraqi economy that was launched by Paul Bremer, governor of Iraq after 2003. Shabibi assumed the position of Iraq’s Central Bank Administrator and thus was responsible for exchange rates and exchange reserves, while Uzri became head of the Trade Bank of Iraq, which regulates Iraq’s international trade and funds reconstruction operations.
The prime minister’s rivals in Baghdad have noted that Maliki, for nearly a year now, has been carrying out a plan to grab hold of power in this country in which political divisions escalate proportionally with an increase in fuel production.
Maliki is accused of launching a campaign to monopolize power, following the complete withdrawal of US military troops.
In that sense, Maliki discharged Uzri in the middle of last year, after accusing the latter of being involved in corruption. This is the same charge upon which Shabibi’s arrest warrants were issued a month ago.
The latest accusation facing Maliki concerns his attempt to use his power to influence Iraq’s central bank. This interference is prohibited by lists that were set by Bremer back in 2004.
The central bank is viewed as a model for how the US wants modern Iraq to be, and a symbol of transparency in a country that was plagued with corruption during the era of the late President Saddam Hussein.
In 2004, Bremer drafted a special law for the central bank, which granted the bank a large degree of independence from government policies. The bank was in charge of exchange rates, amidst a general economic scene that had been characterized by oscillations for many years, as a result of economic sanctions imposed on Saddam Hussein’s regime.
Since then, the central bank decided to intervene directly with exchange rates and thus a committee was formed to hold auctions three times per week to sell the foreign currency for a fixed price. Hence, the bank succeeded in stabilizing and preserving the required rate, even though it was losing $1 million weekly from exchange reserves.
It was not long before the central bank went ahead with increasing the value of the Iraqi dinar by 20% relative to the US dollar. It went from a rate of 1500 Iraqi dinar per one dollar at the end of 2003, to a rate of 1200 per one dollar at the end of 2004.
However, the international sanctions imposed on Iran because of its nuclear program, and on Syria following the suppression of protests, have pushed the Iraqi Central Bank into the spotlight.
The unofficial version of the story is that the US asked Shabibi to tighten the procedures for currency selling within the local market, in order to prohibit money transfers to Iran and Syria, which were both under sanctions. When the central bank complied with the suggestion, the Iraqi government was outraged.
In April of last year, the central bank adopted a series of measures to rein in what was said to be smuggling operations aiming at providing Iranian and Syrian banks with foreign currencies from Iraq. These measures included decreasing the sale of US dollars from about $1 million per week to $300,000 at most. This had a direct impact on the exchange rate of the Iraqi dinar, which decreased in value by about 5% against the US dollar.
Prominent politicians in Baghdad noted that these measures — which, on a general level, were aimed at preserving the exchange rate and, on a deeper level, to tighten the grip on Syria and Iran — angered Maliki. This incited him to interfere — as he has done before — by appointing one of his close acquaintances as head of the Trade Bank.
As a result, the cabinet authorized Abdel Baset Turki, the head of the Board of Supreme Audit, to run the central bank temporarily.
Informed sources in Baghdad hinted that Shabibi was replaced as a result of a deal concluded between Maliki and the head of parliament, Osama al-Najafi.
The sources stated that Najafi, who strongly objected to Maliki’s attempt to take over the central bank, agreed on discharging Shabibi after making sure that the prime minister would assign a Sunni, Abdel Baset Turki, as his replacement, even though the latter is a potential ally of Maliki.
The committee formed by the head of parliament to investigate the accusations of alleged financial impropriety against Shabibi disclosed that more than a billion dollars were sold during the bank’s auction without tracing the sources of the money. However, sources close to Maliki confirmed that the prime minister’s anger is related to Shabibi’s failure to hand over legal documents related to the selling procedures of about $220 billion in the auction.
Some of these sources claim that certain bank documents were counterfeited in an unprofessional way, yet — despite that — have eluded auditing. This is a fact that was later revealed by the parliamentary committee.
It is still unclear whether or not international parties will intervene to investigate the central bank case. While a member of the parliamentary financial committee announced last week that a delegation from the United Nations had arrived in Iraq to investigate this case, the UN Mission in Baghdad and the ministry of foreign affairs have both denied the claim.
Many Iraqis view the case of the central bank as a part of the political conflict in Iraq, and feel that the investigations will not lead to anything.
The many problems deterring economic growth in Iraq — such as the case of the central bank and the fuel and gas law, among others — will not be solved if consensual political agreements are not reached.
Yet, the attempts to change the rules of the political game — set by the US after its military withdrawal — require, according to many Iraqis, a reconsideration on the part of Washington.
Read more: http://www.al-monitor.com/pulse/originals/2013/01/hardships-iraq-central-bank.html#ixzz2H0NzzD3R
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WHILE South Africans get used to the new banknote series, with the Big Five moved to the back of the notes, Zambia is preparing to remove three zeros from its money.
The Bank of Zambia has announced that the kwacha will be rebased by dividing it by 1,000, dropping three zeros off the currency, on January 1.
Zimbabwe’s regular and drastic currency rebasing a few years ago might have created the impression that dropping zeros is a desperate and cosmetic exercise, but analysts say it is often necessary to rebase a currency, ideally when an economy is stable and growing.
“Currency rebasing is usually implemented when there is a need to address costs associated with an accumulated loss in value of the currency that undermines its basic function as a store of value, medium of exchange and measure of value,” said Janine Botha, economist at NKC Independent Economists.
The Bank of Zambia said high kwacha denominations were the result of high inflation for a long time. Zambia had very high inflation in the 1990s and early 2000s. Its inflation peaked at 188% in 1993.
Now Zambia has a K50,000 note, but this is worth less than $10. The Bank of Zambia said this resulted in inconvenience and risks in carrying large sums of money for transactions. It has also led to increasing difficulties in maintaining bookkeeping and statistical records, ensuring compatibility with data-processing software and higher costs in the payment system.
“Too many zeros on a currency simply becomes an administrative nightmare,” said Jannie Rossouw, economics professor at Unisa’s department of economics. “People have to walk around with bags full of money. Zimbabwe issued a Z$100-trillion note at one stage, and at some point there simply is not enough space left on a note to print all the zeros.”
Michael Keenan, currency analyst at Absa Capital, said that after the earlier hyperinflation in Zambia, which caused the currency to drop in value, Zambia’s economic backdrop had improved substantially.
“They have current account surpluses, inflation is about 6%, everything is kind of back to normal, but they still have this currency with all these decimals. It makes sense for them to drop off these zeros, because it will be a lot more convenient and safer.”
Ms Botha said a currency was usually rebased when economic conditions were considered favourable, with low and stable inflation, favourable macroeconomic conditions and good economic prospects.
She said that, in addition to making transactions easier due to the use of smaller units of money, the rebasing of a currency often tended to create greater confidence in the currency as too many digits or zeros could lead people to lose confidence in the currency.
“It also has the potential to enhance policy credibility, assuming that government remains committed to maintaining macroeconomic stability. This would be so as to avoid the return of many zeros on the currency.”
Mr Rossouw said some countries rebased currencies in the mistaken belief that it would curb inflation. “You need other steps as well. You cannot simply rebase your currency and do nothing else and think that will bring inflation under control.”
Mr Keenan said there was even a risk of inflationary pressure when a currency was rebased. “There will be some rounding, and while the effect will be small per item it could bring about a bit of inflation if you add them up. It happened in Ghana when they rebased their currency. The other potential disadvantage is you have the risk that people assume your currency weakens.”
Ms Botha said that, at the broadest level, rebasing a currency did not alter the value or purchasing power of the currency.
According to the Bank of Zambia, exchange rates will also be rebased, with the rule of 1,000 old kwacha equalling one new kwacha.
Mr Keenan said the South African Reserve Bank held some kwacha in its foreign reserve basket, but the foreign reserves were always measured in US dollars.
“If they drop the zeros off the kwacha, the dollar value of that portion of the reserves will remain the same. It will not increase or decrease the Bank’s holding of kwachas.”
How the old K1000 becomes the new K1
Zambia currently has banknotes for K20, K50, K100, K500, K1,000, K5,000, K10,000, K20,000 and K50,000. It has coins for K10, K5, K1, 50 ngwee and 25 ngwee.
After January 1 there will be a new note series for K100, K50, K20, K10, K5 and K2 and coins for K1, 50 ngwee, 10 ngwee and five ngwee.
An item that cost 1,000 old kwacha on December 31, will cost one new kwacha on January 1. From January 1 to June 30 next year all prices will be denominated in the old K-symbol currency and temporarily in the new KR currency. During this time, goods and services can be paid for in both currencies.
From July 1 next year, the old currency will not be accepted, but it will be exchangeable for a year thereafter for the new currency at the Bank of Zambia, commercial banks and designated agents. The new currency will get the symbol K.
From July 1 2014 to December 31 2015, exchanges will be at the Bank of Zambia only and thereafter old currency will have no value.
by René Vollgraaff, November 25 2012, 16:15
Losing the zeros
South Africans are not strangers to the concept of a currency losing zeros, particularly as neighbour Zimbabwe has gone through several such exercises in the past decade.
However, the process in which Zimbabwe chopped a total of 25 zeros off its currency between 2006 and 2009 is not an example of how rebasing should be approached.
As inflation started to increase in Zimbabwe in the early 2000s, the central bank simply printed more money and larger denominations, fuelling inflation even further. In October 2008, one US dollar cost about 2.6-billion Zimbabwe dollars.
Zimbabwe stopped using its own currency in 2009 and now uses the US dollar and the rand.
Some of the more successful examples of currency rebasing have been in Ghana, which dropped four zeros off the cedi in 2007, and Mozambique, which lost three zeros from its metical in 2006.
Turkey knocked six zeros off its lira in 2005. Iraq planned to delete three zeros from its dinar next year, but its news agency has reported that this will not be done soon “due to the lack of security and economic stability in Iraq”.
* This article was first published in Sunday Times: Business Times
http://www.bdlive.co.za/world/africa/2012/11/25/zambia-zeroes-in-on-new-banknotes
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By Matt Smith
DUBAI | Thu Dec 20, 2012 9:15am EST
DUBAI Dec 20 (Reuters) - HSBC Holdings has ceased to be a bookrunner on Asiacell's planned share sale, raising new questions about the Iraqi telecom operator's ability float 25 percent of the company to mainly local investors.
The London-listed bank's exit follows that of Morgan Stanley Inc in September, and a statement from Asiacell on Thursday showed Baghdad-based broker Rabee Securities as "sole distributor and selling agent" for its initial public offering (IPO) of shares.
Asiacell, a unit of Qatar Telecommunications (Qtel), declined to comment further, and HSBC also declined to comment.
Asiacell and its two rivals in the market, Zain Iraq and Korek, have to raise funds through IPOs as a condition of their $1.25 billion operating licenses.
All three companies missed an earlier deadline of August 2011. Asiacell is to be first to float on the Iraqi bourse.
"The absence of global and regional banks providing custody and brokerage services/access products make it difficult to pitch the IPO to international investors, so it will be mainly targeted at local investors," said Marc Hammoud, Deutsche Bank telecoms analyst.
Such a reliance on domestic demand could mean Asiacell fails to offload the full 25 percent of its shares for sale, with the Iraqi bourse seen to be ill-equipped to absorb Asiacell's listing.
QTEL ROLE
Asiacell, which claims to have a 43 percent revenue market share and 9.9 million subscribers, said the company's founding shareholders would offer the shares for sale in the IPO, but has yet to reveal the pricing or whether it will be done on a pro rata basis.
Those will be crucial factors for Qtel, which in June agreed to pay $1.47 billion to up its stake in Asiacell to 54 percent from 30 percent, with the deal including a further increase to 60 percent pending Iraqi government and regulatory approval.
"The IPO might be an opportunity for local shareholders to cash out, but it doesn't make sense for Qtel to dilute its holding," said Deutsche's Hammoud.
Qtel's June deal valued Asiacell at about $5 billion.
"That's a good benchmark valuation for the IPO - Qtel wouldn't buy at that valuation and then sell shares in the IPO at a lower price," said Hammoud.
Asiacell expects to start trading on the Iraq Stock Exchange (ISX) on Feb. 3, its statement said, confirming earlier comments from a company spokesman.
The telecom listings will be the first major IPO on the ISX since the U.S.-led invasion that toppled Saddam Hussein in 2003.
The bourse's market capitalisation is about $4 billion and it trades around $3.3 million daily, while in 2011 Nomura estimated Zain Iraq's enterprise value (equity plus debt) at $4.9 billion.
"Local investors are flush with cash in Iraq," said Hammoud, though he questioned whether that situation is enough to support the Asiacell share sale.
"I wonder whether local investors will put their money in an equity issue that would value Asiacell as much as the entire market," he said. "It will be a big change for the local stock market, and big changes generally imply bigger risks ... or opportunities."
http://www.reuters.com/article/2012/12/20/asiacell-ipo-hsbc-idUSL5E8NK6KR20121220
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ALL DAY EVERYDAY, TWICE ON SUNDAYS!
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Almost time to go night night Mitt!
http://www.youtube.com/watch?v=yL4nbeW7mVs&list=UU1yBKRuGpC1tSM73A0ZjYjQ&index=5&feature=plcp
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I didn't imply you were missing sleep.
I'm saying you are misinformed.
Misinformed people don't have any trouble sleeping.
It's time to start helping yourself.
Others a tiring from carrying you.
I can asure you that you carry nobody, Mitt loves people like you that help keep the rich pockets nice and thick. You listen well, You whould make a wonderful house pet! And yes I sleep well, figure it out!
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I have had several jobs over the past 45 years and the government created none of them.
Maybe the cause of our high unemployment rate, the government is trying to take over the private sector.
If you are waiting for the government to create a job for you, lots of luck.
How did we get to a position (delusional) where we think the government is Santa Clause?
Me, Me,I, I, Me, Its time to start helping others. FYI I sleep well at night!
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Don't get caught up in the HYPE!!!!
Mitt Romney is a joke open your eyes
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Cant wait for Mitt Romney to get slaughtered.
Easy work!!!! October 3, 2012
Topic: Domestic policy
Air Time: 9:00-10:30 p.m. Eastern Time
Location: University of Denver in Denver, Colorado
Sponsor: Commission on Presidential Debates
Participants: President Barack Obama and Mitt Romney
Moderator: Jim Lehrer (Host of NewsHour on PBS)
The debate will focus on domestic policy and be divided into six time segments of approximately 15 minutes each on topics to be selected by the moderator and announced several weeks before the debate.
The moderator will open each segment with a question, after which each candidate will have two minutes to respond. The moderator will use the balance of the time in the segment for a discussion of the topic.
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Almost time to pay up!
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Let's not be bias Jeb!
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Moves like this could cost your boy Romney Arizona!
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Almost time to start shop back up!
Thanks K98!
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Is this NEWS? I think not, this belongs in another forum, but thanks for the post.
Talking about news,Hold my pocket!
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Wake up to what is going on in this country, one doesn't need to be so worldly.
Yes racism dose still exist but the educated are droping it like a bad habbit, But the way you carry yourself on the internet makes me wonder if your for it. Education is the KEY to everything! Just look at Iraq no EDUCATION mean's dont know any better.
And yes one dose need to be more worldly your stuck in the past dude get a life !
:wave:
***^^^ IT RV-ED!!! ^^^***
in Dinar Rumors
Posted · Edited by DetroittoAZ