CBI changing rates every 10 days

[Think about it]

How can gurus say that the CBI will change there rates every ten days, yet all the gurus say we are so close?

[Luigi1]

How can gurus say that the CBI will change there rates every ten days, yet all the gurus say we are so close?

As agreed by CBI & IMF last August, the IQD cannot float more than 2.5% plus or minus each quarter or 10% a year.

[bamagirl]

As agreed by CBI & IMF last August, the IQD cannot float more than 2.5% plus or minus each quarter or 10% a year.

Is it floating?

[fnbplanet]

It's a crawling peg. Those four pips that it changed amount to only one third of one percent.

[Think about it]

As agreed by CBI & IMF last August, the IQD cannot float more than 2.5% plus or minus each quarter or 10% a year.

So does that mean there can not be a sudden RV because it would go against that.

[Luigi1]

Is it floating?

It appears so. Get there slowly with a float or quickly with an RV, either way we come out OK.

[easyrider]

It appears so. Get there slowly with a float or quickly with an RV, either way we come out OK.

the thing is these small increments are NOT going to give the average iraqi what they need and confidence in using the IQD. The us. dollar is still in use strongly over there the whole point is to de dollarize and to put a stop to the US dollar use in country. They need to have value to at least at par with the USD to allow the citizens to start actually using and purchasing things with the dinar. I admit its a start but imho something needs to happen to get confidence back with the IQD.

Edited January 19, 2012 by easyrider

[bamagirl]

It appears so. Get there slowly with a float or quickly with an RV, either way we come out OK.

I vote for 'quickly with an RV'!! I wish my vote counted...

[Luigi1]

the thing is these small increments are NOT going to give the average iraqi what they need and confidence in using the IQD. The us. dollar is still in use strongly over there the whole point is to de dollarize and to put a stop to the US dollar use in country. They need to have value to at least at par with the USD to allow the citizens to start actually using and purchasing things with the dinar. I admit its a start but imho something needs to happen to get confidence back with the IQD.

CBI may be floating for a short while to get some of the big notes back then RV at a later date so it won't be hit with a such a huge obligation at once.

It did the very same thing in Iraq by purchasing USD then announced a in country de-value of the IQD forcing many Iraqis hoarding big notes to turn them in. It worked.

Just my opinion of what may be going on.

[lotsofdinar]

As agreed by CBI & IMF last August, the IQD cannot float more than 2.5% plus or minus each quarter or 10% a year."

I don't remember that. Have you got a link?

[Rome M]

I am not sure about the 2% a quarter stuff. All we have to do is look back at their pdf on the auctions before the rate stopped at 1170. It is clear that the exchange rate moved atleast, if not more, than that every quarter. I have even seen on that file it move 2% in one month, then continue after that.

[Sanssouci]

As agreed by CBI & IMF last August, the IQD cannot float more than 2.5% plus or minus each quarter or 10% a year.

That's a managed float, no? Is not IQD currently in a free float?

[parmenio]

My understanding is the IMF/CBI can put the dinar back at a fixed rate at anytime.

[lotsofdinar]

The IMF does not control the exchange rate of the Dinar. The CBI does.

[pocono]

Search..' Shabibi explains exchange rate regime for Iraq'

He explains what system the CBI uses "managed float" and how it works..

[Tahoe]

I would think that in order to RV, Iraq would need to get as much IQD off the streets as possible. How? Devalue it against the USD. Which results in the Iraqi people using more and more USD. Then, at the right time... Bam! RV occurs and new denominations on par with USD are introduced. Iraqi's turn in their USD for IQD on a near 1 for 1 basis. Since the money on the streets is USD, the obligation is less

[Darin]

I'm lost on how people can make claims like they're fact w/o 100% proof.

But, I guess we can see how this goes & will be de-bunked within a few days as the 10-day duration expires.

If it continutes to rise slowly? Great!! But, 4 pips every 10 days equates to a stronger increase everytime.

As the value increases, the 4 pips would be a bigger value increase.

10 to 6 is quite a difference from 1170 to 1166.

8 to 4 would be doubling the money.

So, who knows what they intent & plan is.. Their money is acting weird, and sometimes, activity is a good thing.

[lotsofdinar]

"The system by which we determine the exchange rate is called 'managed float system,' which means that the price of the dinar is kept floating but is closely monitored so that it can be managed whenever a tangible change occurs." He adds that this floating system is linked to the supply and demand for the US dollar, explaining that the Central Bank is obliged to guarantee 100 per cent of the demands by Iraqi banks for the US dollar"

What he is saying is that it is floating against the dollar.

[parmenio]

The IMF does not control the exchange rate of the Dinar. The CBI does.

It takes marching orders from the IMF.

[lotsofdinar]

parmenio, no, it doesn't. The IMF can suggest, they can disapprove, but they do not dictate exchange rates to member countries.

[parmenio]

parmenio, no, it doesn't. The IMF can suggest, they can disapprove, but they do not dictate exchange rates to member countries.

I like the word "suggest" and "disapprove" that you use. You are right! Any country that wants to be part of the world banking community should listen to what the IMF "suggests" and can "disapprove " or approve if you kiss their ring!

Edited January 19, 2012 by parmenio

[lotsofdinar]

As long as the dinar is tied to the USD, the exchange rate is fixed by an equation involving the amount of dollars in the reserve and the amount of dinar in circulation. Shab's can only increase the value of the dinar relative to the USD by either increasing the USD in the reserves, or decreasing the dinar in circulation. He cannot create wealth from thin air.

The reserves increased over the last year, thus changing the exchange rate.

[Luigi1]

The IMF does not control the exchange rate of the Dinar. The CBI does.

Ya they do if Iraq wants to join the IMF. Iraq has some wiggle room with the date & rate. The IMF has the final word. Same thing if Iraq wants to join the WTO.

They must play by the rules like everyone else if they want a int'l recognized & traded currency that is. If not, then the IQD will remain worthless paper.

[lotsofdinar]

Iraq has been a member of the IMF since 1947.

I would think the last thing Iraq would want right now is an Internationally traded currency. Oil based economies are usually better off with a fixed exchange rate pegged to the dollar.

Edited January 19, 2012 by lotsofdinar

[R Veyron]

Gurus can say what ever they want, that's why they're gurus. Doesn't make it true.