eosirl

I thought it was this combination of the minister of Finance and the CBI that screwed everything up in December, which the legality of powers to adjust the exchange rate came into play after the damage was done. The investigation concluded that the MOF didn't have the powers to make changes to the exchange rate. Then, it was attributed to the IMF requirements. How convenient!. If that had been the case, it would have been mentioned immediately and no need for an investigate on the legality to begin with. One would have thought the CBI would have stood up to defend its own powers but it didn't. Bribery, corruption, in league with Iran, etc.... take you pick. Now we see the same combination of clowns allegedly saying something that hints at best to a major adjustment. Brace yourselves, one doesn't know which way these inept bozos will move the rate.

One of these things is not like the other, one of these things just doesn't belong, if you can guess which thing is not like the other, before I finish my dinar song! It's the legal committee not the whole parliament, and it is only one member of that committee speaking here. If my memory serves me correctly there was a great legal debacle over the changing of the exchange rate regarding the legal right to do so, a) Was it the Governor of the CBI or b) the Minister of the Finance. While the two roles are greatly different, they both deal with Iraq's money. The CBI is responsible to ensure that there is a money supply to the banks to provide loans at desired interest rates. This is included in monetary policy which the CBI is responsible for. The Parliament is responsible for spending it, in terms of projects etc. This is called fiscal policy and which a budget is needed to show where the country's revenues have been allocated. Naturally the two can be in conflict. The CBI wants to save and build its reserves to back its currency while the govt wants that money to spend. Therefore the two can be at logger heads, but neither one can have control over the other. It was my understanding that the legal committee agreed that only the governor of the CBI was entitled to make any changes to the ex change and it was outside the realm of the Minister of Finance to interfere with that. So in hindsight it seems that the MoF are no right in his assertion that he could adjust the rate according to his wishes. It was mentioned in articles that both the governor and MoF were to be question in the next session of parliament. The main cause of concern was why did the governor capitulate with the MoF in changing the rate. Was the governor threatened in any way??? Who knows? Regardless of the reason, the poor in the country has suffered. So bottom line, the government as in the Iraqi parliament can't adjust the exchange rate now or ever, not even in 4 years ten years, etc. It will always be the governor of the CBI right to make the change. Even if the dinar is currently fixed in its ex rate, it doesn't mean it can be changed later on again at the prerogative of the CBI. So whatever Hamza says in this article it's nothing more than opinion oh his part or at worst an attempt to dissuade speculation in the dinar.

Yare absolutely right! The process of converting a currency is a standard procedure. I have done currency exchanges many times on my international trips. I always ask for a quote, even if the rate is displayed on the screens, Why? Simply because when asking for a quote, they will present you with a proforma receipt which shows the amount you you requested to exchange and the bank's fees if any, and then net amount you will receive in the exchange-currency of your choice. Then you can say Nay or Yay. Just got to watch the spread which is the difference between the bank's selling price and buy price. The wider the spread, the more the bank profits from the transaction. One strategy for the bank to lure you in, could be, to say no fees, but have a wider spread than another bank. It's buyer beware. How do you figure out which bank is best? After getting a quote from a bank, one needs to ask how long the quote is valid for. The quotes themselves don't last forever. Then get another quote from another bank and finally compare the two receipts. The receipt with the biggest net total in your pocket is the bank to go with.

Oh I totally agree, getting the dinar on the forex is but one step in the process of Iraq's reconstruction in my opinion. The UN had indeed paid a visit to Iraq several weeks ago. I feel certain it wasn't the weather they were chatting about. The UN with is designed planned projects will assist the govt. of Iraq in its reconstruction as per those white papers the Iraqi govt. spoke about months back.

I would think so that's it's more. This is from state to state. Whereas the other financial institutions as you have mentions are there for their own purpose. The fact this is the US Ambassador to Iraq, and he is the official representative of the US president, is very telling. I see if any permission was needed from the US to go forth with Iraqi reforms, they have the US permission in my opinion from this meeting.

Thanks Carrello. Finally it's nice to see someone who comprehends basic algebra in terms of keeping Dinars dinars and not in the arbitrarily switching to USD in the middle of the computation.

Excellent article explanation on how the dinar could be introduced to the forex fixed to a basket of currencies with the percentages prorated. From the graph it takes the high and low rates out of the dinar's value equation and smooths the exchange rates. The more currencies in the basket and depending on the percentages assigned can give a high overall average rate indicated by the bolded broken green dotted line. Thanks Laid Back

Oh come one Carrello, where's your sense of humor? What makes you think that I don't speak 3 languages and have lived in several countries too. The paranoid reference was in relation to you not being party to Blackrobes circle of private information and the proposed idea that BR and I were previously associated, which again you were categorially wrong and I have every right to refute it. Never said you were afraid, or afraid of anyone. I don't know who you are. Just remember you did the judging first. I just simply retorted to your comments. Please note there's a difference between lecturing and voicing an opinion. Don't confuse the two. I have no desire to 'convert' anyone to my way of thinking. After all it is a forum here. I won't be intimidated by you simply because I don't have an agenda to sell. I don't sell dinar, I am not classified as a guru and don't want to be. I have however been through two country currency changes and am aware of the process from a retail stand point of view and also from an educational background. So perhaps my experience might be of benefit to someone, and if not, I am not going to cry. Oh by the way, calling me 'sweetheart' was not only condescending but judgmental, kettle pot black etc. PS Just for the record not female.

shhhhh you are too, look behind you!

Thanks DinarThug for the explanation. The unfounded allegation of Blackrobes and myself being in cahoots was a red flag. It was the cause and effect fallacy in action. The cause - Blackrobes and I were new with 12 posts each therefore the effect - we were in cahoots. lol No need for proof just allegations. Sad really.

Tried your suggestion PrehistoricMan and all I got was Nordstrum and Dillards selling black robes.

Carrello, For the absolute record, I have no idea who Blackrobes is, other than the fact he/she claims to live in the southern hemisphere and I live in the northern hemisphere. I can assure we are not neighbors. The fact we have 12 posts each has is nothing more than coincidental and it apparently feeds your paranoia. You are the perfect example of why anyone with a bit of knowledge of the subject of international finance are reluctant to engage with forum trolls. While you are annoyed that someone with some information doesn't want to share that information with you, upsets you. Perhaps the rumor section is better suited for your reading material. Like everyone else on here (12 posts or not) are entitled to their opinion, which obviously includes you as we can see from your post. If you don't like what you read, then move on. For others who would like a more in-depth, thoughtful, analytical, and non-hyperbolic read, they are so welcome to read my comment. I am not here to convince anyone of my thoughts, that's up them. One thing is for sure, you have a bunch of sour grapes, and you are throwing them at the wrong person. As for the gurus I let them have their voice without my criticism, in the end, it's who you wish to listen to that will educate you or lead you where they want to.

Forgot to mention, that the tone of the article is negative towards an unregulated Float which market forces determine the dinar's trading rate.

Yes, it was Walkingstick via Frank that suggest the narrow band of trading, no mention if any Iraqi official, in a pertinent position, offered the same strategy. While Saleh discusses the simplistic approach of a currency's value being dependent on the Supply and Demand in reality, the factors behind the valuation of a country's currency is far more complex than supply and demand, but rather the country's current accounts, the ability to pay its debts, its assets, its political stability, its reserves, both fx currency held by the CBI, and in the case of Iraq, its oil reserves indicative of future revenue, all should contribute to an evaluation of the dinar's forex rate. Iraq fear the Dutch effect which happened to the Netherlands when it discovered oil. The value of its currency rose and the price of goods rose within the country, making its exports more expensive and thus less demand. Inflation and slowing of exports would be disastrous for Iraq. A float of the dinar with no safety measures is in essence a gamble. Fixed to a single currency or to a basket of currencies in which each chosen currency had a percentage ratio, or a managed float, all seem doable strategies for Iraq. In my opinion Iraq will have a more Goldilocks approach neither too high or too low.

How interesting that before the budget was pass a British envoy travelled to Iraq to speak to the PM requesting that Iraq get its budget past ASAP. Obviously the UK government has some special interest in the affairs of Iraq.