CBI To Take Action (Supposedly)

[SWFloridaGuy]

I apologize if this article has already been posted.  I've never beat Master Yota or K98 to finding an article.   So, most likely it's hidden somewhere in this forum already.  I would also appreciate everyone else's interpretation of this article and the others similar that have emerged recently.  Thanks.

 

 

5-29-13 SWFloridaGuy: "Central Bank begins next month, the application of measures to reduce exchange rate volatility. Will begin implementation of a package of measures designed to restore the exchange rate of the dollar against the Iraqi dinar to normal."

 

It's hard to hear more encouraging news than this if true and considering the abounding amount of analogous reports we have received inferring similar news, I'd say for once I'm a little excited about what could happen in the very near future. 

We'll just have to hope for the best and wait and see as usual. The news appears to be sensational but don't bother reserving a seat for me on the roller coaster just yet.

 

I do have two questions however ... why would they announce this to the world beforehand and how does one determine the exact nomenclature of what the phrase "normal" means in this context.

It's hard to imagine that this doesn't mean a rise to where it was before it became practically worthless and that they are moving toward a more realistic, competitive rate somewhere on par with the USD. 

 

Others will claim this means $3+, double digits etc. Yes, I understand it held a very high value decades ago but remember that was also a different currency.  On a positive note they have only increased their wealth since then but I still don't believe that initial high-rate theory to be realistic for one second.  I can't imagine they could maintain that long term stability without eventually leading to the collapse of their economy. 

 

Only after time and letting the market drive the rate up could this be achieved, which is entirely possible.  Also, for those of you who say 1 to 1 is a small RV, please keep in mind that is a 100,000% increase overnight and the largest previous RV in history was Romania at around 40%. So, although Iraq has far more potential than previous countries who RVd, let's keep things in perspective.

 

There is also another theory presented by the lopsters claiming we are misinterpreting this completely. I'm not here to judge them for their opinion but I choose not to believe this.

I won't list the reasons why because I'll end up writing another 3 page post and at the end of the day, I have to be humble enough to admit that I can't guarantee that they are wrong (although I do disagree with them).  I am excited to see what the near future holds for us.

 

Today's Article - Central Bank begins next month, the application of measures to reduce exchange rate volatility and to restore the exchange rate of the dollar against the Iraqi dinar to normal!!

 

Confirmed the parliamentary Finance Committee, Wednesday, the Central Bank of Iraq next month will begin implementation of a package of measures designed to restore the exchange rate of the dollar against the Iraqi dinar to normal to prevent a repeat of the case of exchange rate volatility.

 

And plunged the value of the Iraqi dinar gradually over the past weeks to reach the price per dollar to about 1129 dinars after it had been stable for 1120, the highest rate up to the exchange rate during the past two years.

 

Committee member said Haitham al-Jubouri's "Twilight News" that "the CBI told the Finance Committee that will begin next month, the application of measures to curb the rise of the dollar against the Iraqi dinar, and some of these measures did not disclose the details they will be strictly confidential."

 

Jubouri explained that "one of the most prominent measures that the Iraqi Central Bank will begin to apply is to open letters of credit in the government and private banks," noting that "the Finance Committee has informed the Iraqi Central Bank support for all procedures in reducing the rise in the dollar against the Iraqi dinar."

 

The Finance Committee has this month and central bank governor Abdul Basit Turki agency and discussed with him the reasons for the high price of the dollar against the Iraqi dinar.  

http://www.shafaaq.com/sh2/index.php/news/economy-news/58488-2013-05-29-07-29-19.html

Edited May 29, 2013 by SWFloridaGuy

[FlyHi]

My simplistic take on "normal" in the context is to get back to the old rates for the two currencies before the current dollar buying frenzy took hold (to sell to neighbouring countries perhaps??) to exploit the difference between the bank and street sellers rates and so bring them closer together.

 

I seriously doubt it is a reference to lifting the dinar value in the sense of an RV.....but time will tell.

[SWFloridaGuy]

My simplistic take on "normal" in the context is to get back to the old rates for the two currencies before the current dollar buying frenzy took hold (to sell to neighbouring countries perhaps??) to exploit the difference between the bank and street sellers rates and so bring them closer together.

 

I seriously doubt it is a reference to lifting the dinar value in the sense of an RV.....but time will tell.

 

That's my fear as well but on the other hand maybe they have bigger plans in mind.  I'm not expecting some huge RV next month.  Trust me, I'm pretty burnt out on this whole thing but nevertheless, it is interesting to see what they are planning.

[NWGUY]

Thank you SWFG!!!  You along with Yota, K98, AL, Thug, Easy, Ron, Sandfly, and everyone else...so many to list, are a great resource for us!  You guys rock! 

 

Let's hope that this is the year.  I think CBI is trying to get the ball rolling, but my hopes for June, are a little skeptical.  At the rate that they move, maybe after Ramandan, or at least by the end of year.  I am very hopeful, that this will be over this year!

 

Again, thank you, and all, that spend the time, and energy, to share information.  We know, that it takes a lot to research, and provide it to us, and you all, still have a life....I think??

 

Go RV or RI !!!

[sweet C]

Thanks SWFG! Hoping and dreaming. ....

[jmw2]

The article seems to imply that they want to stop the slide and possibly return it to 1120 to the dollar...I think you are correct that they would not announce an upcoming 100,000% increase to the world...just doesn't make sense to do that.  They have talked recently of stopping the banks and money exchangers from taking advantage of people, as referenced by FlyHI, so they may be taking additional measures to stop this from happening.

[SWFloridaGuy]

NWGUY, I agree but the lat part cracked me up. I used to have a life (honest I really did), but now I live at the top of a mountain and have 2 people so far. Why do you think all of a sudden I'm posting again. Man you guys are my social outlet. Don't laugh.

[TQueezy]

Thank you SWFG!!!  You along with Yota, K98, AL, Thug, Easy, Ron, Sandfly, and everyone else...so many to list, are a great resource for us!  You guys rock! 

 

Let's hope that this is the year.  I think CBI is trying to get the ball rolling, but my hopes for June, are a little skeptical.  At the rate that they move, maybe after Ramandan, or at least by the end of year.  I am very hopeful, that this will be over this year!

 

Again, thank you, and all, that spend the time, and energy, to share information.  We know, that it takes a lot to research, and provide it to us, and you all, still have a life....I think??

 

Go RV or RI !!!

No offense intended really, but... Sandfly? Really?! I mean what does he contribute other than a running rally of sentence fragment responses of no substantial value? Maybe I'm missing where he at one point contributed greatly and decided at some point it was no longer worth it? Can someone please explain that user to me??

[NWGUY]

NWGUY, I agree but the lat part cracked me up. I used to have a life (honest I really did), but now I live at the top of a mountain and have 2 people so far. Why do you think all of a sudden I'm posting again. Man you guys are my social outlet. Don't laugh.

 

Brother....you do so much more, on an off day, than most people.  Keep up the great work!  It really does mean a lot to the rest of us!  

 

On a side note.....sorry for you, but you can't have a life now, until we have an RV!!!  As our good friend Jack Nickolson, said in that movie...."We want you on that wall.....We need you on that wall"! 

 

Go RV or RI Soon !!!

[idplzr]

NWGUY, I agree but the lat part cracked me up. I used to have a life (honest I really did), but now I live at the top of a mountain and have 2 people so far. Why do you think all of a sudden I'm posting again. Man you guys are my social outlet. Don't laugh.

I can relate, my social circle is my 12 yr old angel and being like I was at 23 just wouldn't teach her what a good responsible man is. Being a single father is tough but I wouldn't trade her for Hugh hefner's life..... Would have never thought that at 23;)

[staunch]

No offense intended really, but... Sandfly? Really?! I mean what does he contribute other than a running rally of sentence fragment responses of no substantial value? Maybe I'm missing where he at one point contributed greatly and decided at some point it was no longer worth it? Can someone please explain that user to me??

Careful, you are gonna upset

[NWGUY]

No offense intended really, but... Sandfly? Really?! I mean what does he contribute other than a running rally of sentence fragment responses of no substantial value? Maybe I'm missing where he at one point contributed greatly and decided at some point it was no longer worth it? Can someone please explain that user to me??

 

Sorry Tqueezy.....you should have been on the printed list, of Hall of Famer's!  My bozo brain, has memory lapses, so please forgive me!  I know, I should have expounded on the list, but just lazy, when it comes to typing. 

 

Again, Tqueezy...thank you for all you do for us here! 

 

Go RV or RI !!!!

[TQueezy]

Careful, you are gonna upset

  

I'm not trying to offend... I just really don't understand. Is he really a big contributor and respected and such?

Sorry Tqueezy.....you should have been on the printed list, of Hall of Famer's!  My bozo brain, has memory lapses, so please forgive me!  I know, I should have expounded on the list, but just lazy, when it comes to typing. 

 

Again, Tqueezy...thank you for all you do for us here! 

 

Go RV or RI !!!!

Regardless of your apparent sarcasm, I really was not trying to say I'm worthy of any praise, just that I really don't get why Sandfly posts what he does...

[NWGUY]

  

I'm not trying to offend... I just really don't understand. Is he really a big contributor and respected and such?

Regardless of your apparent sarcasm, I really was not trying to say I'm worthy of any praise, just that I really don't get why Sandfly posts what he does...

 

 

My brother....no sarcasm at all from me!   I really appreciate everyone here, and whether or not you agree with anyone at all, I believe most if not all, are investors, and we all want the same thing! 

 

If you knew me personally, I really don't have very many people in this world I don't like, and would rather spend my time with people.  My friends kid me a lot, about talking to people.  They tell me all the time, that I would talk to a tree! 

 

Anyway, I understand, but again, no scarcasm....thank you!

 

Go RV or RI !!!

[OZmosis]

Just saying TQueezy - I am a fan of yours.  No explanation necessary - but I will say that I do respect your opinions.  I will also take this opportunity to say I am a fan of Sandfly's too - although in another post I got criticised for expressing this.  So why am I a fan of Sandfly?  Numerous reasons.  Firstly, he is in Afganistan.  Anyone in Afganistan doing their bit, whatever this is - gets all my respect.  Secondly, Sandfly expresses his opinions on a daily basis.  He is consistent.  He is positive.  He is straight to the point.  Who else expresses his thanks to those who post as often as Sandfly?  Saying thanks is indeed expressing an opinion.  And there is all those other memorable Sandfly comments - some that I remember are:  "rv then" ... "just get on with it" ... "do it now" ...etc etc etc.  All really positive stuff that keeps me smiling and motivated when, after 9 years of this I sometimes feel a bit jaded.  So, while I thank the newshounds, SWFG, and countless other people who day by day express their opinions that range the entire spectrum, I also thank every person who has ever posted - as they are the contributors whatever their opinion or whether or not I personally agree.  I love the humour, the quality of debates, the interpretations of news items, the analysis, and the opinions without any credentials (such as mine.)  The only thorn in my side, are the unscrupulous guru's who are only in this for their own self-satisfaction and sadistic tendencies.   ...So .... Go dinarvets.  You are the best resource I have come across for little old ladies like me who really enjoys sharing this crazy journey with like minded souls... like minded because I presume we all own dinar.. 

[Catluver67]

Thanks SWFG! Always appreciate your post and insight!

[ezrapound]

NWGUY, I agree but the lat part cracked me up. I used to have a life (honest I really did), but now I live at the top of a mountain and have 2 people so far. Why do you think all of a sudden I'm posting again. Man you guys are my social outlet. Don't laugh.

SWFG: I can certainly identify with your situation! If it weren't for this place, my only other social contacts would be like the ones this morning I met at the hospital while they were removing iron skillets from each side of my head, placed there by my wife....

Seriously, your interpretations and prognostications re this dinar thing are pretty spot on. See, the thing is, you just call it like it is...without all the obvious other agendas that so many ( most) of the "gurus" have. While I suspect you would be offended to be labeled with that title, and with good reason, you have lent a new definition to it, whether it was your intention or not. You've brought a new and much needed level of honesty and integrity to a lot of very disgruntled and mislead folks, many of whom have been involved in this for many years ( myself included)

So, I say "Kudo's to you sir" Keep up the good works!

[zigmeister]

SWFG I do have some theories as to what may up.  Of course I am not economist so it is on my observation and possibilities, none of which are to be regarded in any way as even probable.  If that makes sense.  Here are some of my thoughts;  first off in this article they refer to a rate of 1120-1129, I have to agree with someone here who mentioned this may be a misprint.  It should read 1220, the street price.  This makes more sense to me.  This makes more sense because the 1120 should make them very happy, it is higher than the old 1166.  Unfortunately by this article I would assume the 1160 rate is normal.  So what could be the mechanisms to bring the street up or at least bring it closer together.  They have to close the gap by stopping the dollar flow.  What I gathered from yesterday's articles is this, people are being hired to use their passports to get dollars.  They are allotted something like 100.00 US dollars for traveling outside of Iraq.  They are paid dollars for their dollars.  In the article it was termed, renting passports.  Who is the buyer?  My bet is money changers and Iran money changers(they certainly can't use their passports).  This is a lucrative venue for them as well as getting dollars into Iran.  The people can make a nice profit in one day.  This is why the lines are getting longer and longer everyday, its catching on.  How can they stop it?  My thought the QI cards may be one of the stops to this problem.  The 100.00 US dollars becomes electronic and they won't be able to cash out.  This would alleviate some of the weak spots of draining dollars, and failing dollar.  I think we might also see CBI clamping down on who gets dollars once again.  Just some thoughts.

 

Having said all of that, this particular article and it is just an observation.  Yesterday they stated they were going to raise the dinar exchange rate.  Compared to this article they have taken a step back from that announcement.  They are going to bring it back to normal.  Is this a bit of smoke so no one gets any big ideas to run out and buy more dinar?  Possible.  I would not go as far as to say probable but it is something I noted.

 

Now a question for you.  In referring to yesterdays article mentioning a rise in the dinar, so the discrepancy of the program rate and the street rate come closer together.  They would have to mean the program rate wouldn't they?  One more question, I understand when we look at forex and all these programs the Iraqi dinar is not tradable however I have noted on all of them the rate is 1149, I also understand this probably has to do with the upswing in the dollar of which it is pegged to, is this the correct assumption?  Who knows we might see the 1166 become 1149.  20 pegs, eh but hey it is something.

 

Anyway just my thoughts!  

 

And I happen to be very fond of Sandfly!  A man of few words but sometimes he says it all!!

 

Cheers,

Zigs

[sandfly]

THANKS

[DiNaR DoCtOr]

The article seems to imply that they want to stop the slide and possibly return it to 1120 to the dollar...I think you are correct that they would not announce an upcoming 100,000% increase to the world...just doesn't make sense to do that.  They have talked recently of stopping the banks and money exchangers from taking advantage of people, as referenced by FlyHI, so they may be taking additional measures to stop this from happening.

I can see it making sense if the Cbi wants to appear transparent in their actions.

My questions - Does the often quoted foreign reserves balance include foreign reserves in the two (of four) cbi branches under krg management? Past notes in the financial statements indicated the statements only included two of four branches. Does the often quoted m2 balance in the statements reflect all outstanding currency?

The reasons for my questions - If the two other cbi branches report no additional outstanding currency, then good for us. If the foreign reserves includes krg foreign reserves, but current m2 balances do not reflect additional liabilities included in the not reported)

[yota691]

THANKS

Thank you and SWFG and everybody  GM DV

[supergirl]

Just saying TQueezy - I am a fan of yours.  No explanation necessary - but I will say that I do respect your opinions.  I will also take this opportunity to say I am a fan of Sandfly's too - although in another post I got criticised for expressing this.  So why am I a fan of Sandfly?  Numerous reasons.  Firstly, he is in Afganistan.  Anyone in Afganistan doing their bit, whatever this is - gets all my respect.  Secondly, Sandfly expresses his opinions on a daily basis.  He is consistent.  He is positive.  He is straight to the point.  Who else expresses his thanks to those who post as often as Sandfly?  Saying thanks is indeed expressing an opinion.  And there is all those other memorable Sandfly comments - some that I remember are:  "rv then" ... "just get on with it" ... "do it now" ...etc etc etc.  All really positive stuff that keeps me smiling and motivated when, after 9 years of this I sometimes feel a bit jaded.  So, while I thank the newshounds, SWFG, and countless other people who day by day express their opinions that range the entire spectrum, I also thank every person who has ever posted - as they are the contributors whatever their opinion or whether or not I personally agree.  I love the humour, the quality of debates, the interpretations of news items, the analysis, and the opinions without any credentials (such as mine.)  The only thorn in my side, are the unscrupulous guru's who are only in this for their own self-satisfaction and sadistic tendencies.   ...So .... Go dinarvets.  You are the best resource I have come across for little old ladies like me who really enjoys sharing this crazy journey with like minded souls... like minded because I presume we all own dinar.. 

 

@ozmosis - well done! and go @sandfly....go rv

[go4profit]

Thanks, SWFG.  Your posts are always insightful and interesting.  Very much appreciated!