CBI AUCTIONS

[Dinar Buddy]

MUST READ - STOP WATCHING THE AUCTIONS

 

 

Central Bank’s foreign exchange auction

Let us note, first, that in spite of what is termed ‘auction’, Iraq, like most oil exporting countries in the region, has been following fixed-exchange-rate arrangement (to US$) since the beginning of 2009. Furthermore, let us refer to auction rate of exchange as ‘official’ rate to distinguish it from ‘market’ rate; which is used by banks and money exchangers.

To meet demand, auction US$ sales (henceforth, sales) to participating banks include two types of transactions, international transfers and cash payments. International transfers, which make the majority of transactions, are intended mainly to finance imports by the private sector. Cash sales serve to meet payments for travel, medical expenses, etc. The purposes, that these two types of transactions serve, define what can be called ‘auction rules’, which insure that sales meet ordinary demand.

 

They have been erroneously described as stocks, which are ‘put aside’ for emergencies only. Such misconception could have insinuated a misunderstanding, on the part of politicians and non-specialists that international reserves can be readily used as free finance. In reality, instead of being ‘put aside’, they are continually used through additions and withdrawals. For instance, purchases (or receipts) of US$ by the CBI add to the reserves, while auction sales withdraw from them. Reserves rise when additions outweigh withdrawals and vice versa. Furthermore, international reserves as assets are completely balanced by liabilities (obligations). Therefore, using them, independently of obligations, results in disequilibrium in the exchange market and the economy as a whole.  Link Below.

 

Foreign Exchange Auction, International Reserves, and Central Bank Independence in Iraq*, by Ali Merza Monetary Policy

 

[TQueezy]

Okay. Thanks. We knew they had no bearing on a possible revaluation.

[sandfly]

YEP

[rockfl9]

This report disputes the assumption that the CBI could buy dinar to remove from circulation i.e. to hold or destroy!

[keepmwlknfny]

This report disputes the assumption that the CBI could buy dinar to remove from circulation i.e. to hold or destroy!

Shhhhh dont tell the gurus!!! Then they wont have any reasoning behind deleting the zeros is just removing the larger bills from.circulation through the auctions! Puts all their theories in the dumpster!!

Sadly, this information will.go un-noticed and people will still think the auctions are used for removing currency from.circulation.....

[keepmwlknfny]

BUMP

[supergirl]

Thanks Dinar Buddy

[MyLadiesDaddy]

LOL

[TQueezy]

Lol indeed. Wait, so... people thought that dinar was being sold to the CBI and removed from their books this whole time without any new bills printed and distributed? There would be no bills left at all, high or low... They've been doing these auctions for years. That's trillions of dinar that would have been destroyed/removed. Guess we'll never know...

[SocalDinar]

If its so black and white how come no one can explain the huge increase of the cash portions of the auctions?

CBI says it has a handle on the money laundering. Is it all being smuggled to Syria? Iran?

Keep? Rock? Anyone?

 

This article says that Cash sales serve to meet payments for travel, medical expenses, etc...  Why the huge increase??

 

Last year this date  the Auction totals for the week was  $1.387589 Billion  With a cash Transactions at $ 71.600 Million thats about 5 % cash

 

Last weeks auction total  for the week was                      $1.320304 Billion With a cash Transaction at $322,105 Million  That about 24 % cash

 

 

This was not happening when Shabs was running the CBI but ever since his departure the cash numbers have grown . Thats a whole lot of additional cash transactions compared to a year ago. 1/4 billion dollars CASH additional for the week. FOR THE WEEK!

 

 

[sandstorm]

The cash portion for the last five days is approx 250,000 dollars or approx 220 million dinar. Nothing new

I think your adding it wrong socal. its $322,000 dollars....or roughly 300 million dinar.

its not 322,000 million dollars.

It would be 1/4 a billion dinar.......or approx. 1/4 millions dollars

Now that ch7 is lifted and more trade is happening.........the auctions will have to increase to cover the balance of payment

[keepmwlknfny]

If its so black and white how come no one can explain the huge increase of the cash portions of the auctions?

CBI says it has a handle on the money laundering. Is it all being smuggled to Syria? Iran?

Keep? Rock? Anyone?

 

This article says that Cash sales serve to meet payments for travel, medical expenses, etc...  Why the huge increase??

 

Last year this date  the Auction totals for the week was  $1.387589 Billion  With a cash Transactions at $ 71.600 Million thats about 5 % cash

 

Last weeks auction total  for the week was                      $1.320304 Billion With a cash Transaction at $322,105 Million  That about 24 % cash

 

 

This was not happening when Shabs was running the CBI but ever since his departure the cash numbers have grown . Thats a whole lot of additional cash transactions compared to a year ago. 1/4 billion dollars CASH additional for the week. FOR THE WEEK!

I dont think everything is black and white bud.....just have looked into the auctions a little and their purpose, and just could never understand why people believe that its used to pull in currency in circulation to be taken off the books.

 

And I always thought that when the auctions started to hit big numbers, and they were mentioning that they would or might have to dip into reserves, it was around when all these issues were going on in the surrounding countries and USD was being smuggled out because of the high demand.....I could be wrong...wish I knew....

[SgtFuryUSCZ]

 

MUST READ - STOP WATCHING THE AUCTIONS

***///

 

Excellent article.  Thanks for the share!

 

But now where is RONSCARPA going to go in his jet every day if not to get

the Auction info for us...?

 

Guess he can just break the sound barrier over the evil maliki's house so

his Camels & Goats will stop giving milk,

 

then he can buzz over TheSANDFLY and dip his wings & say "Hi !"..... instead  !  

[Sweet baby dinar]

Sadly for a long time ppl have watched the auctions

[SgtFuryUSCZ]

***///

 

We confess, we were those folks.

 

Somewhere we got the idea that when the Auctions dropped significantly,

or stopped altogether - it was GO TIME!  

 

Not too bright...

[TQueezy]

The cash portion for the last five days is approx 250,000 dollars or approx 220 million dinar. Nothing newI think your adding it wrong socal. its $322,000 dollars....or roughly 300 million dinar.

its not 322,000 million dollars. It would be 1/4 a billion dinar.......or approx. 1/4 millions dollarsNow that ch7 is lifted and more trade is happening.........the auctions will have to increase to cover the balance of payment

No: Sandstorm. On this, you're wrong. They sell 322million dollars IN CASH to banks and people over the week. The figure is written in hundred thousands (of thousands) meaning 322,000 times 1000, or 322,000,000. The CBI takes in and sells 10s of millions in US cash per day, and as the article states, it is all balanced evenly. And the best (or worse) part is, these cash amounts are being subtracted and added to the foreign currency reserves. Says so right there in the article. So that debunks the withdrawing and destroying of dinar from Iraqi streets...

[GPCarter]

Lol indeed. Wait, so... people thought that dinar was being sold to the CBI and removed from their books this whole time without any new bills printed and distributed? There would be no bills left at all, high or low... They've been doing these auctions for years. That's trillions of dinar that would have been destroyed/removed. Guess we'll never know...

Technically the CBI does not Buy or Sell anything. Though they might refer to it as buying or selling what they actually do is exchange / swap one currency for another. They don't make any money from the buy/sell/exchange. The profit they make comes from the spread or transaction fees attached. If someone needs USD they turn in the equivalent in IQD + the spread and they get USD in exchange. I guess you can say that it technically does take IQD off the street each time someone physically exchanges cash because you give up one currency in order to get the other.

 

Here is an interesting thing you might not know about the extreme profit made by exchanging IQD/USE inside Iraq. In many cases people were making more doing the illegal, black-market, physical forex exchanges in Iraq than I can make doing legit forex trading. They would exchange their IQD for USD. Then they would do street exchanges with people who could not easily get their hands on USD. They would take their USD, exchange it at extremely high rates and get back more IQD than they started with. They would then go to the bank with their IQD and repeat the process. Each time they do these exchanges they increase the amount of USD and IQD. This is an excellent way for people to launder money, fund terrorism etc. Imagine taking 100 USD, finding someone in desperate need of USD and getting them to give you 2 times the value in IQD. (This happened to a lot of people who were illiterate, did not have a clear understanding of the value etc.) Then the next day you go back to the bank with twice as much IQD as you exchanged the day before. You exchange for more USD and repeat the process. Soon you would end up with a ton of USD and IQD. That is why they tried to make restrictions on who could do these cash exchanges. People were abusing the system too much. They were doing tons of these transactions and racking up a lot of money.

[whoda]

 

MUST READ - STOP WATCHING THE AUCTIONS

 

 

Central Bank’s foreign exchange auction

Let us note, first, that in spite of what is termed ‘auction’, Iraq, like most oil exporting countries in the region, has been following fixed-exchange-rate arrangement (to US$) since the beginning of 2009. Furthermore, let us refer to auction rate of exchange as ‘official’ rate to distinguish it from ‘market’ rate; which is used by banks and money exchangers.

To meet demand, auction US$ sales (henceforth, sales) to participating banks include two types of transactions, international transfers and cash payments. International transfers, which make the majority of transactions, are intended mainly to finance imports by the private sector. Cash sales serve to meet payments for travel, medical expenses, etc. The purposes, that these two types of transactions serve, define what can be called ‘auction rules’, which insure that sales meet ordinary demand.

 

They have been erroneously described as stocks, which are ‘put aside’ for emergencies only. Such misconception could have insinuated a misunderstanding, on the part of politicians and non-specialists that international reserves can be readily used as free finance. In reality, instead of being ‘put aside’, they are continually used through additions and withdrawals. For instance, purchases (or receipts) of US$ by the CBI add to the reserves, while auction sales withdraw from them. Reserves rise when additions outweigh withdrawals and vice versa. Furthermore, international reserves as assets are completely balanced by liabilities (obligations). Therefore, using them, independently of obligations, results in disequilibrium in the exchange market and the economy as a whole.  Link Below.

 

Foreign Exchange Auction, International Reserves, and Central Bank Independence in Iraq*, by Ali Merza Monetary Policy

 

Misinformation. RV will be backed by Gold - IQ is a world leader in Gold and Oil reserves - Value will no longer be in the hands of the banks backed by promissory notes instead it will be in the hands of the gov't backed by their physical reserves.

[TotalNewb]

Technically the CBI does not Buy or Sell anything. Though they might refer to it as buying or selling what they actually do is exchange / swap one currency for another. They don't make any money from the buy/sell/exchange. The profit they make comes from the spread or transaction fees attached. If someone needs USD they turn in the equivalent in IQD + the spread and they get USD in exchange. I guess you can say that it technically does take IQD off the street each time someone physically exchanges cash because you give up one currency in order to get the other.

 

Here is an interesting thing you might not know about the extreme profit made by exchanging IQD/USE inside Iraq. In many cases people were making more doing the illegal, black-market, physical forex exchanges in Iraq than I can make doing legit forex trading. They would exchange their IQD for USD. Then they would do street exchanges with people who could not easily get their hands on USD. They would take their USD, exchange it at extremely high rates and get back more IQD than they started with. They would then go to the bank with their IQD and repeat the process. Each time they do these exchanges they increase the amount of USD and IQD. This is an excellent way for people to launder money, fund terrorism etc. Imagine taking 100 USD, finding someone in desperate need of USD and getting them to give you 2 times the value in IQD. (This happened to a lot of people who were illiterate, did not have a clear understanding of the value etc.) Then the next day you go back to the bank with twice as much IQD as you exchanged the day before. You exchange for more USD and repeat the process. Soon you would end up with a ton of USD and IQD. That is why they tried to make restrictions on who could do these cash exchanges. People were abusing the system too much. They were doing tons of these transactions and racking up a lot of money.

Thanks GP. Lets not forget about the news of all the old tattered IQD notes that the banks wouldn't even accept anymore. ... Unless of course those stories aren't true. Who knows though, really.

[SocalDinar]

No: Sandstorm. On this, you're wrong. They sell 322million dollars IN CASH to banks and people over the week. The figure is written in hundred thousands (of thousands) meaning 322,000 times 1000, or 322,000,000. The CBI takes in and sells 10s of millions in US cash per day, and as the article states, it is all balanced evenly. And the best (or worse) part is, these cash amounts are being subtracted and added to the foreign currency reserves. Says so right there in the article. So that debunks the withdrawing and destroying of dinar from Iraqi streets...

Exactly Tqueezy.

But if these cash amounts are being subtracted how come the reserves continue to grow.? One article from an economist named Ali Merza debunks nothing IMO.

[George Hayduke]

Technically the CBI does not Buy or Sell anything. Though they might refer to it as buying or selling what they actually do is exchange / swap one currency for another. They don't make any money from the buy/sell/exchange. The profit they make comes from the spread or transaction fees attached. If someone needs USD they turn in the equivalent in IQD + the spread and they get USD in exchange. I guess you can say that it technically does take IQD off the street each time someone physically exchanges cash because you give up one currency in order to get the other.

 

Here is an interesting thing you might not know about the extreme profit made by exchanging IQD/USE inside Iraq. In many cases people were making more doing the illegal, black-market, physical forex exchanges in Iraq than I can make doing legit forex trading. They would exchange their IQD for USD. Then they would do street exchanges with people who could not easily get their hands on USD. They would take their USD, exchange it at extremely high rates and get back more IQD than they started with. They would then go to the bank with their IQD and repeat the process. Each time they do these exchanges they increase the amount of USD and IQD. This is an excellent way for people to launder money, fund terrorism etc. Imagine taking 100 USD, finding someone in desperate need of USD and getting them to give you 2 times the value in IQD. (This happened to a lot of people who were illiterate, did not have a clear understanding of the value etc.) Then the next day you go back to the bank with twice as much IQD as you exchanged the day before. You exchange for more USD and repeat the process. Soon you would end up with a ton of USD and IQD. That is why they tried to make restrictions on who could do these cash exchanges. People were abusing the system too much. They were doing tons of these transactions and racking up a lot of money.

Excellent description Carter.  This same method was utilized toward the end of the VN war in Saigon.  Saigon GI's were making a ton of money by having friends/relatives mail them C notes.  In turn they would trade them for 4 times the amount in MPC off the streets, buy a money order from American Express and mail the MO back to the states and repeat the process.  This continued until the military and AE limited the amount of MO's purchased according to the purchasers rank.  Seems someone didn't like the idea of E-4's buying GTO's, Road Runners and Harleys outright...    

[SocalDinar]

The cash portion for the last five days is approx 250,000 dollars or approx 220 million dinar. Nothing new

I think your adding it wrong socal. its $322,000 dollars....or roughly 300 million dinar.

its not 322,000 million dollars.

It would be 1/4 a billion dinar.......or approx. 1/4 millions dollars

Now that ch7 is lifted and more trade is happening.........the auctions will have to increase to cover the balance of payment

Pretty sure its in USD with 000 added to the end of what they show but I could be wrong.  But go back  to the 1st of the year and watch the cash portions grow and grow.

It has changed. What does this mean? Probably nothing. Who knows

[cheevo]

Central Bank reserves are a debt owed by the Central Bank by Iraqi dinar holders....

[keepmwlknfny]

Misinformation. RV will be backed by Gold - IQ is a world leader in Gold and Oil reserves - Value will no longer be in the hands of the banks backed by promissory notes instead it will be in the hands of the gov't backed by their physical reserves.

How long have you been around?

[Boozer]

Thanks