Prestige of the Iraqi dinar

[imgesing]

If I break-even that's ok.

If they RD and then RV to $3 I'm fine with that

If they RV to $.10 much better

If they RV to $1+ I will be going to Belize doing the happy dance

I'd like to see what you do if it goes (not expected by me) to 3.22.

I'll look like Daffy Duck in happy mode jumping down the street. They might lock me up... LOL

[Rayzur]

Thanks for the great post Yota!!!! Lots of information to digest.... but with actual substance we can work with in piecing this together...

In a nutshell is Iraq does want to be internationally recognized.  For this deal to happen, it would be the first step to make the dinar internationally recognized.  Iraq can't just move around the WTO and say it is, they need to move in the directions to make it happen.  They realize the dinar as it is now won't work in this deal.  The deletion of zero's would work towards those steps as well.  A neutral event, then adjust the rate.  However the deal with India speeds up the need for international recognition of their currency and deletion of zero's is a process which really can't be sped up.  So it appears to me they are looking at another possibility to accomplish the goal.  What that entails I have no clue.  One thing is for sure, there is some pressure going on and what they have in mind is yet to be seen.

 

Thanks for the great summary Ziggy... as always... As I read the IMF, whatever they do, it has to be consistent both domestically and internationally.... in other words, they can't have one condition for their currency at the international level and another completely different set of metrics for it domestically.... Lots of us would like to suggest a solution.... but I'm thinking they're not likely to solve this one by way of a contest whereby they implement the winners suggested means of solving this..  Though if I'm wrong, let me suggest a compromise between those claiming a 3.42 Rv and those claiming a .01 RV with declaring a value of 1:1 with the zeros remaining intact, and then decimalize over the next few months, releasing the LDs Jan 2014 and converting all currency to this new decimalized currency over the next two years with both floating during that time? Works for me... What do ya think 

[txdinargirl]

Bump

[zigmeister]

Thanks for the great post Yota!!!! Lots of information to digest.... but with actual substance we can work with in piecing this together...

 

Thanks for the great summary Ziggy... as always... As I read the IMF, whatever they do, it has to be consistent both domestically and internationally.... in other words, they can't have one condition for their currency at the international level and another completely different set of metrics for it domestically.... Lots of us would like to suggest a solution.... but I'm thinking they're not likely to solve this one by way of a contest whereby they implement the winners suggested means of solving this..  Though if I'm wrong, let me suggest a compromise between those claiming a 3.42 Rv and those claiming a .01 RV with declaring a value of 1:1 with the zeros remaining intact, and then decimalize over the next few months, releasing the LDs Jan 2014 and converting all currency to this new decimalized currency over the next two years with both floating during that time? Works for me... What do ya think 

Thanks Rayzor and as always I appreciate your posts of solid thinking and dialogue of possibilities.  This article tells us so much of what other possibility could be on the table while Iraq waits the deletion of zero's.  I agree the dinar has to be consistent internationally and domestically.  I believe right now the CBI has brought the domestic and international rate very close, when you add in the fee's, 1204 to 1668.  It may be as close as they will get.  However the 1204 for the people in Iraq is not what they want or expected after the chapter 7 release.  They like us expected and were told the rate would be higher in the dinar.  Iraq was anticipating deletion of zero's.  If deletion of zero's is an RD like many of us here fear, a postponement is a relief in the hopes they will do something more conducive to a profit for us.  For Iraq, a neutral event will not matter, they will have new currency and coins.  The value will be comparable to the dollar.  They nationalize the new dinar and the people will have pride for their national and internationally recognized dinar.  The question is, with this deal in the making with India, it seems the pressure would be on them to make the dinar now internationally recognized imperative.  Not only because of India, but I am sure they are making deals with other countries around them with similar circumstances right now or they soon will be.  But the dinar would have to be internationally accepted to do this.  They have made the steps, what with the passing of COM and working with the WTO.  The question is how much in a hurry is Iraq in?  Can they wait until 2014?

 

The gentleman who wrote the article made a statement, the other possibility is the plastic card.  For me, I am intrigued, how that would work.  If the deletion of zero's is really about bringing in dinar, the card would do it.  It would solve many concerns and frustrations of tattered money, or money laundering, or counterfeit dinar.  It is just zero's and one's.  They raise their exchange rate to whatever, or float it.  At a later date they print new currency in lower denoms, but would they have to?  I would suspect they wouldn't have to print as much, because the cards would be the work horse so to speak.

 

Now that is one scenario, but what if he is stating since they postponed the deletion of zero's until 2014, and he is referring to a redenomination they have another possibility for the work around.  They redenominate the dinar, new currency code but they don't have to print one dinar, ever.  My question is, can they do that?  I don't know, but I suspect they could.  Whats more it could really put a dent in terrorism because the government would know every item bought, sold and so forth by the peoples of Iraq.   I would say Iraq would find the cards very attractive indeed.

 

Are they ready?  Is their systems up for such a feat?  Some say it is and others not, who knows.  However cards are not a new thing for Iraqi people, they have been using them for a long time.  Many articles have been posted here, Iraq wants to be one of the first to become a cashless society, Iraq also wants to be a reserve currency for the surround countries.  As laughable as that may seem today, Maliki's successful invitation was a huge step towards that goal.  Iraq aint kidding they are dead serious.

[Frangipani]

Exclusive: Emerging markets plan joint offshore FX intervention: official

Reuters – 46 minutes ago 30/8/2013

 

A man exchanging damaged currency counts 100 rupee
notes along a roadside in Kolkata August 30, 2013.

REUTERS/Rupak De Chowdhuri

By Manoj Kumar

NEW DELHI (Reuters) - India is liaising with other emerging-economy countries on a plan to co-ordinate intervention in offshore currency markets blamed for worsening a currency rout over the past three months, a senior Indian finance ministry official said on Friday.

The idea of major emerging economies taking action together to offset the impact of a stronger U.S. dollar as the Federal Reserve reins in its stimulus had also been floated in June by Brazilian President Dilma Rousseff in a phone call to her Chinese counterpart.

The leading emerging market nations that form the BRICS groups - including Brazil, Russia, India, China and South Africa - fretted about the global turbulence at a July G20 summit in Moscow, but no action materialised. G20 leaders are due to meet in St Petersburg next week.

"It is now time to stop," Dipak Dasgupta, the Indian finance ministry's principal economic adviser, told Reuters, referring to speculative behaviour in offshore markets he said was damaging the stability of the world economy.

"It is going to happen in a matter of days rather than weeks," he said. "Brazil and India can start the move."

He said there had been correspondence among several countries on the plans in the last few weeks and predicted that action would now come quickly, but he declined to share specific details of the discussions.

Dasgupta said the conversations were not limited to BRICS nations. It was not immediately clear how many takers there were for such a proposal from other major emerging economies.

However, Brazil's central bank said it was not currently participating in any planning for co-ordinated intervention in offshore markets.

"There is no initiative like that," a Brazilian central bank spokesperson said.

Still, the comments from the Indian official extended the rupee's gains on Friday to 65.72 per dollar from 65.85 after the currency slumped to a record low earlier this week. The government in New Delhi is struggling with the weakest economic growth in years and a yawning current account deficit.

"The Indians are clearly aggressively in verbal intervention mode," said Timothy Ash, emerging markets analyst at Standard Bank in London.

The sell-off in emerging markets has been driven by concern about the end of cheap dollars from the U.S. Fed's stimulus programme, prompting a massive capital flight toward dollar-denominated assets. The rout has been compounded by short-seller attacks in offshore trading centres.

When the idea for coordinated action surfaced earlier, analysts said that - unlike their wealthier counterparts at the G7 group - the BRICS were still far from either coordinating monetary policy or jointly intervening in forex markets.

Separately, the BRICS countries have been working during the past year on a $100 billion reserve fund and a joint development bank to reshape the global financial architecture long dominated by rich nations. These new institutions are expected to take some time to materialise.

"NO FORCE CAN STOP THEM"

Offshore markets developed to allow foreign investors to hedge or speculate on emerging-market currencies when exchange controls in those countries made it difficult to trade directly in the domestic spot market.

Dasgupta said such markets had exerted pressure on 12 of the main emerging market currencies, including Brazil, China, India, Russia, South Africa, Turkey and Malaysia.

He said that, acting together, even four or five members would have estimated international reserves of $1.2 trillion. With China, the total reserves exceed $6 trillion, he said.

"Once they decide they will move to intervene to mutually support each other to put a floor, there is no force that can stop the impact," he said.

The rupee is the worst performing major currency in recent months, having lost about 20 percent against the dollar since May.

Non-deliverable forward (NDF) markets operating mainly from Singapore, Hong Kong, New York and London allow trade in several Asian currencies, including the rupee. They allow investors to bet without ever having to physically exchange the currency involved.

A report by the Indian central bank in August said NDFs were affecting the rupee's value. Indian central bank Governor Duvvuri Subbarao in July said he would rather there were no NDF markets.

One Indian government estimate puts global trading of the rupee at $60-$70 billion per day. By that yardstick, authorities believe they would need fire-power of $6 billion to $7 billion per day to intervene and make a dent in the offshore currency markets. Officials say that is beyond India's reach alone. (Writing by Frank Jack Daniel; Editing by John Chalmers and Neil Fullick)

http://finance.yahoo.com/news/exclusive-emerging-markets-planning-joint-114519891.html;_ylt=A2KJ3CU4yiBS8FoAiA2TmYlQ

[zigmeister]

Exclusive: Emerging markets plan joint offshore FX intervention: official

Reuters – 46 minutes ago 30/8/2013

 

A man exchanging damaged currency counts 100 rupee

notes along a roadside in Kolkata August 30, 2013.

REUTERS/Rupak De Chowdhuri

By Manoj Kumar

NEW DELHI (Reuters) - India is liaising with other emerging-economy countries on a plan to co-ordinate intervention in offshore currency markets blamed for worsening a currency rout over the past three months, a senior Indian finance ministry official said on Friday.

The idea of major emerging economies taking action together to offset the impact of a stronger U.S. dollar as the Federal Reserve reins in its stimulus had also been floated in June by Brazilian President Dilma Rousseff in a phone call to her Chinese counterpart.

The leading emerging market nations that form the BRICS groups - including Brazil, Russia, India, China and South Africa - fretted about the global turbulence at a July G20 summit in Moscow, but no action materialised. G20 leaders are due to meet in St Petersburg next week.

"It is now time to stop," Dipak Dasgupta, the Indian finance ministry's principal economic adviser, told Reuters, referring to speculative behaviour in offshore markets he said was damaging the stability of the world economy.

"It is going to happen in a matter of days rather than weeks," he said. "Brazil and India can start the move."

He said there had been correspondence among several countries on the plans in the last few weeks and predicted that action would now come quickly, but he declined to share specific details of the discussions.

Dasgupta said the conversations were not limited to BRICS nations. It was not immediately clear how many takers there were for such a proposal from other major emerging economies.

However, Brazil's central bank said it was not currently participating in any planning for co-ordinated intervention in offshore markets.

"There is no initiative like that," a Brazilian central bank spokesperson said.

Still, the comments from the Indian official extended the rupee's gains on Friday to 65.72 per dollar from 65.85 after the currency slumped to a record low earlier this week. The government in New Delhi is struggling with the weakest economic growth in years and a yawning current account deficit.

"The Indians are clearly aggressively in verbal intervention mode," said Timothy Ash, emerging markets analyst at Standard Bank in London.

The sell-off in emerging markets has been driven by concern about the end of cheap dollars from the U.S. Fed's stimulus programme, prompting a massive capital flight toward dollar-denominated assets. The rout has been compounded by short-seller attacks in offshore trading centres.

When the idea for coordinated action surfaced earlier, analysts said that - unlike their wealthier counterparts at the G7 group - the BRICS were still far from either coordinating monetary policy or jointly intervening in forex markets.

Separately, the BRICS countries have been working during the past year on a $100 billion reserve fund and a joint development bank to reshape the global financial architecture long dominated by rich nations. These new institutions are expected to take some time to materialise.

"NO FORCE CAN STOP THEM"

Offshore markets developed to allow foreign investors to hedge or speculate on emerging-market currencies when exchange controls in those countries made it difficult to trade directly in the domestic spot market.

Dasgupta said such markets had exerted pressure on 12 of the main emerging market currencies, including Brazil, China, India, Russia, South Africa, Turkey and Malaysia.

He said that, acting together, even four or five members would have estimated international reserves of $1.2 trillion. With China, the total reserves exceed $6 trillion, he said.

"Once they decide they will move to intervene to mutually support each other to put a floor, there is no force that can stop the impact," he said.

The rupee is the worst performing major currency in recent months, having lost about 20 percent against the dollar since May.

Non-deliverable forward (NDF) markets operating mainly from Singapore, Hong Kong, New York and London allow trade in several Asian currencies, including the rupee. They allow investors to bet without ever having to physically exchange the currency involved.

A report by the Indian central bank in August said NDFs were affecting the rupee's value. Indian central bank Governor Duvvuri Subbarao in July said he would rather there were no NDF markets.

One Indian government estimate puts global trading of the rupee at $60-$70 billion per day. By that yardstick, authorities believe they would need fire-power of $6 billion to $7 billion per day to intervene and make a dent in the offshore currency markets. Officials say that is beyond India's reach alone. (Writing by Frank Jack Daniel; Editing by John Chalmers and Neil Fullick)

http://finance.yahoo.com/news/exclusive-emerging-markets-planning-joint-114519891.html;_ylt=A2KJ3CU4yiBS8FoAiA2TmYlQ

Interesting.......intriguing.......and thanks.

[Dinarian64]

I am unfortunately beginning to believe it will be a lop on cards with a deliberate move to enable countries that are engaged in a emerging market coalition such a this to be able to get in... This would resolve the issue of excess currency in the hands of countries they hate. I can imagine a lot of scheming is going on behind the scenes to eliminate the US and western dinar holders as why would they want to make us all millionaires, billionaires and trillionaires as well as provide the US with enough money to pay off our national debt. They hate us folks and I'm sure they will RD to spite us all. Sorry for the doom and gloom but my sense is this and I welcome anyone who can give me positive reorientation.

[zigmeister]

I am unfortunately beginning to believe it will be a lop on cards with a deliberate move to enable countries that are engaged in a emerging market coalition such a this to be able to get in... This would resolve the issue of excess currency in the hands of countries they hate. I can imagine a lot of scheming is going on behind the scenes to eliminate the US and western dinar holders as why would they want to make us all millionaires, billionaires and trillionaires as well as provide the US with enough money to pay off our national debt. They hate us folks and I'm sure they will RD to spite us all. Sorry for the doom and gloom but my sense is this and I welcome anyone who can give me positive reorientation.

I hope not.  Maybe we will have to get us some of them QI cards ourselves!  Warka is back in gear, they may get a lot of US accounts opened in that case.

[waterman13]

Good article Buti,

GO BRICS, GO IRAQ!

GO RV

WM13

[Rayzur]

 

 

The gentleman who wrote the article made a statement, the other possibility is the plastic card.  For me, I am intrigued, how that would work.  If the deletion of zero's is really about bringing in dinar, the card would do it.  It would solve many concerns and frustrations of tattered money, or money laundering, or counterfeit dinar.  It is just zero's and one's.  They raise their exchange rate to whatever, or float it.  At a later date they print new currency in lower denoms, but would they have to?  I would suspect they wouldn't have to print as much, because the cards would be the work horse so to speak.

 

Now that is one scenario, but what if he is stating since they postponed the deletion of zero's until 2014, and he is referring to a redenomination they have another possibility for the work around.  They redenominate the dinar, new currency code but they don't have to print one dinar, ever.  My question is, can they do that?  I don't know, but I suspect they could.  Whats more it could really put a dent in terrorism because the government would know every item bought, sold and so forth by the peoples of Iraq.   I would say Iraq would find the cards very attractive indeed.

 

Are they ready?  Is their systems up for such a feat?  Some say it is and others not, who knows.  However cards are not a new thing for Iraqi people, they have been using them for a long time.  Many articles have been posted here, Iraq wants to be one of the first to become a cashless society, Iraq also wants to be a reserve currency for the surround countries.  As laughable as that may seem today, Maliki's successful invitation was a huge step towards that goal.  Iraq aint kidding they are dead serious.

 

Wow Zig.... great questions.... very thoughtful with great insight as usual.... I've got to go do a medical thing in a minute, so off the top of my head... I'm kind of headed in this direction:

I've got a direct quote discussion from Shabs wherein he talks quite frankly about decimalization. It always disturbed me that it was his assertion that decimalization would wipe out any great deficit that might be created by counterfeiting. He also talked frankly about the use of the cards as a means of delivering economic exchange (paying for something) which would be most amiable to decimalization. He likewise stated at least 4 times that I found that the currency would be rebased. Both of these concepts are of course what we most commonly refer to on dinar sites as redomination. (darn it). 

Somewhere along the line, I found out who the contractor was for the cards. I had someone research it and at this point (today) can't remember if they are in fact actually ready. My memory sense of it, is they are by now.

There was also a contract bid out from CBI to have someone come in and program the infrastructure linking all banks and all facilities and all POS and all the other stuff I can't imagine, into a central system. I think this went out to bid over a year ago, and my memory sense of it, is that it should be about completed if not already done. Of course, this infra structure software and hardware is a critical component. Having cards absent a system is useless. From what I read, this system is so sophisticated, and at that time was the cutting edge, had not been done before. Hard to imagine, but it was far more robust than anything we have here or in other countries (at that time). 

My sense is they are finishing up on the infra structure pieces, and are just about done, if not fully completed. This was stuff I was looking at well over a year ago, so my memory and recall of the specifics really suks right now (but I can go back and look later today). My sense back then was that if they can pull this off, there would not necessarily be a need for printing a whole lot of new currency. Clearly, if they "RD", all notes from the current series would be obsolete. Not sure but I'd suspect that if there is printing of a new currency, it might be to replace that held by those other than folks in Iraq (or maybe a few distant merchants in the back hills kind of thing) Really dont know, but it would make sense that they would have to have a paper representation of their currency for those holding "money" in Iraqi dinar who are not Iraqi people, or citizens engaging daily transaction in country. 

To me, the question is, will they raise the value of their currency before they decimalize, or after. Relative to the IMF, I don't see them having a value in country that is different internationally. I'm glad to see some of their financial ministers talking openly about people outside Iraq holding dinar, and recognizing they will have to somehow deal with that. There was what I thought to be a critical article discussing that, and unfortunately, one word untranslated would completely change how this could go down.... however as it read, it seemed to suggest that Iraq would "deal" with foreign investors before they tackled the RD.... (if I can find that article, I'll bring it in here later if you want)... 

I'll give this more thought but have to take off now to leave for appointment.... 

 

Thanks for the great discussion and thought provoking analysis Ziggy.... Later

[oopssteptinit]

Wow, great thread, thanks yota, zig, frangi, and all you smart folk.

[zigmeister]

Wow Zig.... great questions.... very thoughtful with great insight as usual.... I've got to go do a medical thing in a minute, so off the top of my head... I'm kind of headed in this direction:

I've got a direct quote discussion from Shabs wherein he talks quite frankly about decimalization. It always disturbed me that it was his assertion that decimalization would wipe out any great deficit that might be created by counterfeiting. He also talked frankly about the use of the cards as a means of delivering economic exchange (paying for something) which would be most amiable to decimalization. He likewise stated at least 4 times that I found that the currency would be rebased. Both of these concepts are of course what we most commonly refer to on dinar sites as redomination. (darn it). 

Somewhere along the line, I found out who the contractor was for the cards. I had someone research it and at this point (today) can't remember if they are in fact actually ready. My memory sense of it, is they are by now.

There was also a contract bid out from CBI to have someone come in and program the infrastructure linking all banks and all facilities and all POS and all the other stuff I can't imagine, into a central system. I think this went out to bid over a year ago, and my memory sense of it, is that it should be about completed if not already done. Of course, this infra structure software and hardware is a critical component. Having cards absent a system is useless. From what I read, this system is so sophisticated, and at that time was the cutting edge, had not been done before. Hard to imagine, but it was far more robust than anything we have here or in other countries (at that time). 

My sense is they are finishing up on the infra structure pieces, and are just about done, if not fully completed. This was stuff I was looking at well over a year ago, so my memory and recall of the specifics really suks right now (but I can go back and look later today). My sense back then was that if they can pull this off, there would not necessarily be a need for printing a whole lot of new currency. Clearly, if they "RD", all notes from the current series would be obsolete. Not sure but I'd suspect that if there is printing of a new currency, it might be to replace that held by those other than folks in Iraq (or maybe a few distant merchants in the back hills kind of thing) Really dont know, but it would make sense that they would have to have a paper representation of their currency for those holding "money" in Iraqi dinar who are not Iraqi people, or citizens engaging daily transaction in country. 

To me, the question is, will they raise the value of their currency before they decimalize, or after. Relative to the IMF, I don't see them having a value in country that is different internationally. I'm glad to see some of their financial ministers talking openly about people outside Iraq holding dinar, and recognizing they will have to somehow deal with that. There was what I thought to be a critical article discussing that, and unfortunately, one word untranslated would completely change how this could go down.... however as it read, it seemed to suggest that Iraq would "deal" with foreign investors before they tackled the RD.... (if I can find that article, I'll bring it in here later if you want)... 

I'll give this more thought but have to take off now to leave for appointment.... 

 

Thanks for the great discussion and thought provoking analysis Ziggy.... Later

Excellent insights and past research for on the fly Rayzor!  Another statement by Iraq in a couple of articles, they mention Iraq is an experiment, perhaps they are speaking of this sophisticated system?  hmmmm......very intriguing.  Once again the cards have captured my attention.

[Laid Back]

I'd like to see what you do if it goes (not expected by me) to 3.22.

I'll look like Daffy Duck in happy mode jumping down the street. They might lock me up... LOL

If it RV or RI to $3.22 (not expected by me either) I will be in shock first and then PARTY TIME.!!!

[Rayzur]

 

 

Excellent insights and past research for on the fly Rayzor!  Another statement by Iraq in a couple of articles, they mention Iraq is an experiment, perhaps they are speaking of this sophisticated system?  hmmmm......very intriguing.  Once again the cards have captured my attention.

 

 

I found the reference piece, tried to post it earlier, and it would not allow me, .... so I'm going to give it a shot again (after resaving it as a screen shot PDF) Oh dear, I changed it to a TIFF, a PIFF and RIFF and a WTF am I doing file... and I finally got it I think.... jay zus mouse.... I finally got the day'um thing to download herein.... I think if you click on it, you can super size it to read.... best I could do relative to my patience posting on here... 

 

Maybe its good both docs are small.... If the infrastructure is indeed necessary to hook all together.... which I pretty much think it is.... this is not the best of news for the gang at this time.... it seems... 

 

 

 

 

 

 

NEXT PAGE

 

 

 

 

 

Its interesting to note that:

 

The RPSI will be tendered as a single integrated solution including: (a) Overall integration of the RPSI systems; ( Software and infrastructure for the Iraq Interoperable Mobile Payment System; © Software and infrastructure for the National EFTPOS / ATM Switch; (d) Integration with the Iraq Payment System (IPS) clearing and settlement facilities consisting of the Check‐enabled Automated Clearing House (CACH), the Real‐time Gross Settlement System (RTGS) and the Central Securities Depository; (e) Integration with the Participant Banks, Mobile Network Operation.

 

 

So, to continue the discussion from earlier today.... it would appear, given this contract was just awarded last week... (and they are about a year behind their projected timeline), .....that the necessary infrastructure is not yet in place to process the transaction of monies across Iraq via electronic means at this point. Whether or not the cards are in place is seemingly moot at this juncture in that the hook up of the entire system has yet to be programmed. 

 

That's my read, what are your thoughts?

PS on the INRPS I document... for the record, the email doc I have does have the CBI letterhead on it... and its clearly a picture taken from a briefing binder... I took a picture of the picture, so its a little blurry... but at least you will be able to download it and read it.... I don't think this was in public domain in an easy way to find (till now) 

I never plus mah self.... but in this case... this was such a pain in the azzzz to get on here, I think I would plus mah self about 50 times for every fricking minute I wrestled with this day'um thing...           

Edited August 31, 2013 by Rayzur

[jonjon]

Slowest India Growth Since 2009 Pressures Singh to support Rupee

By Unni Krishnan - Aug 30, 2013 1:31 PM CT

India’s slowest economic expansion since 2009 adds pressure on Prime Minister Manmohan Singh to stem a slide in the rupee that forced the central bank to raise interest rates.

Gross domestic product rose 4.4 percent in the three months through June from a year earlier, compared with 4.8 percent in the prior quarter, the Statistics Ministry said in New Delhiyesterday. The median of 44 estimates in a Bloomberg News survey was for a 4.7 percent gain.

The rupee has slumped 16 percent versus the dollar this year as India’s record current-account deficit made it vulnerable to an outflow of capital from emerging markets, spurred by the prospect of reduced U.S. monetary stimulus. The Reserve Bank of India raised rates in July to support the currency and contain inflation, imperiling economic expansion even as Singh pledges to revive investment.

“The government is going to struggle to turn around the economy until it gets the deficit, consumer-price inflation and the exchange rate under control,” said Prasanna Ananthasubramanian, an economist at ICICI Securities Primary Dealership Ltd. in Mumbai. “This may take some time, and growth is at risk in the meantime.”

The rupee, which reached a record low of 68.845 per dollar on Aug. 28, climbed 1.4 percent to 65.705 at the close in Mumbai. The RBI three days ago said it will supply dollars to the largest oil importers to cool foreign-exchange demand. The S&P BSE Sensex index rose 1.2 percent. The yield on the 7.16 percent bond due May 2023 fell to 8.60 from 8.77 percent on Aug. 29.

Capital Outflows

Nations from Indonesia to Brazil are trying to bolster their currencies as foreign investors exit on concern the Federal Reserve will taper $85 billion a month of debt purchases that boosted the capital circulating in the global economy.

The RBI is set to sustain and may even extend recent monetary tightening, according to BNP Paribas SA. While a good monsoon is helping farm output, other risks mean GDP expansion may dip to 3.7 percent in the year ending March 2014, BNP said. Average growth in the past 10 years is about 8 percent.

The RBI has raised the marginal standing facility and bank rates and capped cash injections into the banking system since July, while keeping the benchmark repurchase rate unchanged.

Private consumption growth eased to 1.6 percent in the second quarter from a year earlier, from a 3.8 percent pace in previous three-month period, yesterday’s report showed. Government spending jumped 10.5 percent, while investment slid 1.2 percent.

Foreign Reserves

Rupee weakness threatens to stoke consumer-price inflation of almost 10 percent, the fastest in a basket of 17 Asia-Pacific economies tracked by Bloomberg.

The drop has also revived memories of India’s 1990s crisis, when the nation needed an International Monetary Fund loan as foreign reserves waned. Singh said this month growth will speed up and India won’t face a repeat of that turmoil.

India’s reserves of about $278 billion are adequate near term, Moody’s Investors Service said Aug. 19. Fiscal policy remains the weakest aspect of Asia’s No. 3 economy, it said.

The RBI must boost currency holdings to anchor the rupee, and options include a sovereign-bond issue or deposits to tap India’s diaspora, according to Bank of America Merrill Lynch.

Singh’s coalition, beset by graft scandals and seeking support before polls due by May, won parliamentary backing this week for bills providing cheap grains to the poor and assuring fairer terms for farmers when companies buy their land.

Singh’s Agenda

Legislation to allow increased foreign investment in the pensions and insurance industries and simplify taxes is pending. Opposition protests over graft have repeatedly disrupted parliament for more than two years.

The government has tried since 2012 to tackle deficits, woo inflows, speed up construction projects and avert a credit-rating cut. The steps range from higher taxes on gold imports to more liberal foreign-direct investment rules.

“The macro-stabilization process which should support the value of the rupee is under way,” Singh said in parliament in New Delhi yesterday. “As the fruits of our efforts materialize,currency markets will recover.”

The government predicts the current-account imbalance may narrow to about $70 billion this fiscal year and targets a budget gap of 4.8 percent of GDP.

Cooling demand in the nation of 1.2 billion people, about two-thirds of whom live on less than $2 per day, is hampering corporate expansion. Maruti Suzuki India Ltd., India’s largest carmaker, has delayed a plan to build a plant in Gujarat state.

India’s slowdown contrasts with more resilient expansion in neighbors such as China, which grew 7.5 percent last quarter.

The South Asian nation’s vulnerability is being “clearly exposed by an unfavorable external environment,” said Eswar Prasad, who teaches economics at Cornell University in New York.

To contact the reporter on this story: Unni Krishnan in New Delhi at ukrishnan2@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net

 

[txdinargirl]

 

That's my read, what are your thoughts?

PS on the INRPS I document... for the record, the email doc I have does have the CBI letterhead on it... and its clearly a picture taken from a briefing binder... I took a picture of the picture, so its a little blurry... but at least you will be able to download it and read it.... I don't think this was in public domain in an easy way to find (till now) 

I never plus mah self.... but in this case... this was such a pain in the azzzz to get on here, I think I would plus mah self about 50 times for every fricking minute I wrestled with this day'um thing...         

.

I will happily + you for going to all that effort for us. Thanks

[zigmeister]

 

 

 

 

 

I found the reference piece, tried to post it earlier, and it would not allow me, .... so I'm going to give it a shot again (after resaving it as a screen shot PDF) Oh dear, I changed it to a TIFF, a PIFF and RIFF and a WTF am I doing file... and I finally got it I think.... jay zus mouse.... I finally got the day'um thing to download herein.... I think if you click on it, you can super size it to read.... best I could do relative to my patience posting on here... 

 

Maybe its good both docs are small.... If the infrastructure is indeed necessary to hook all together.... which I pretty much think it is.... this is not the best of news for the gang at this time.... it seems... 

 

 

 

 

 

 

 

NEXT PAGE

 

 

 

 

 

 

Its interesting to note that:

 

The RPSI will be tendered as a single integrated solution including: (a) Overall integration of the RPSI systems; ( Software and infrastructure for the Iraq Interoperable Mobile Payment System; © Software and infrastructure for the National EFTPOS / ATM Switch; (d) Integration with the Iraq Payment System (IPS) clearing and settlement facilities consisting of the Check‐enabled Automated Clearing House (CACH), the Real‐time Gross Settlement System (RTGS) and the Central Securities Depository; (e) Integration with the Participant Banks, Mobile Network Operation.

 

 

So, to continue the discussion from earlier today.... it would appear, given this contract was just awarded last week... (and they are about a year behind their projected timeline), .....that the necessary infrastructure is not yet in place to process the transaction of monies across Iraq via electronic means at this point. Whether or not the cards are in place is seemingly moot at this juncture in that the hook up of the entire system has yet to be programmed. 

 

That's my read, what are your thoughts?

PS on the INRPS I document... for the record, the email doc I have does have the CBI letterhead on it... and its clearly a picture taken from a briefing binder... I took a picture of the picture, so its a little blurry... but at least you will be able to download it and read it.... I don't think this was in public domain in an easy way to find (till now) 

I never plus mah self.... but in this case... this was such a pain in the azzzz to get on here, I think I would plus mah self about 50 times for every fricking minute I wrestled with this day'um thing...         

 

If I had 50 plus's I would give them to you.  Very interesting indeed.  In a research I found an article from CBI going over the info you have, but they state the RTGS system went live Aug. 24, 2006, the C-ACH went live 9/14/2006, the GSRS went live pm 11/17/2008.  Interesting I found an older description for Iraqi payment systems on an older CBI website I guess.  There they mention Checks enablement Project which had not gone live as of 2008.  In the 2012 statement, it is not mentioned.  So they must have decided not to pursue the CEP.  Here is that site, I won't post it in length as it would make this post too long!

http://www.cbi.iq/paymenttransactions.html

Here is the 2012 version from CBI.

 

Payment Systems

Iraq owns one of the most advanced electronic payment systems in the world. The system is designed to ensure the exchange of payment orders between banks automatically via an efficient and secure network.

The Central Bank of Iraq (CBI) operates and manages the settlement accounts of the participants to ensure the safety and efficiency of payment systems and clearing operations.

The payment network consists of the following systems:

• RTGS: Real Time Gross Settlement System
• C-ACH: Cheque - Automated Clearing House
• GSRS: Government Securities Registration System

The CBI aims to reduce the use of cash in the country despite the challenges of geography and the remaining security issues which make the transfer of money across the country difficult and risky. Hence the objective is to automate the settlement of checks, salaries and the activation of automation systems for electronic cards, in order to keep more liquidity in bank accounts.

The other achievement is the automation of the primary market for the government securities system which the CBI began to work on with the consultation with the Ministry of Finance (MOF) in 2008. There are also a plans to automate the activities of the secondary market.

The legal framework of payment and settlement systems

The overall aim of the CBI with the support of its laws is to maintain domestic price stability and promote a competitive & stable financial system. The legal framework for the banks and the CBI is stated in the Banking Law and the Central Bank of Iraq Law which were issued on September 19th, 2003 and March 6th, 2004 respectively. The objective of the CBI in issuing these laws was to set up an Iraqi legal framework for banking in line with international banking standards, promote confidence in the economy by establishing a safe financial environment, and provide a competitive and accessible banking system. 

It should be noted that the laws of payment systems are currently under study by the CBI in order to assess the experiences of other countries and its applications in the working environment for a country like Iraq. Based on the 2004 CBI law, these electonic activities have been agreed between participants and the CBI through contracts which include guarantees, legal rights, and protections for all parties.

The CBI is also working with local and foreign entities to issue special laws for all electronic payments so that these actitivies operate under a proper legal environment.

The Securities Law was legislated and published in April 2004. It highlights the need to legislate more developed laws to cover the activities of the private sector in the securities market as well as on the organization of primary and secondary markets for government securities.

IPS Components

1. Real Time Gross Settlement system - RTGS

• The system was activated on the 24-AUG-2006. The system connects the CBI with the main bank branches, and the Ministry of Finance (MOF) for exchanging high valued transactions inside Iraq.
• This system replaced the manual execution for operations and eliminated settlement risks between banks.
• CBI is the owner of the system, and takes on the responsibility to install the required software for the participant banks, in additon to providing training courses for users. On the administration side for the CBI, important processes such as the monitoring of banks are now made easier.
• At beginning five banks participated in settlement processes, but gradually the CBI widened the system to cover all banks and foreign branches that have a license in Iraq.
• The system has safety features (i.e. the 4 four eyes principle), and the authorization required to activate the system can only be provided by CBI.

2. Cheque - Automated Clearing House - C-ACH

• The system enables the participants banks and their branches to exchange payment orders automatically. The final settlement is processed and sent to the Real Time Gross Settlement System (RTGS). Within this system the encoded cheques are exchanged and the original copies of the cheques are kept at the deposited branch, then the electonic version of the cheque's data is sent through the branch to the head office system.
• The system was activated on the 14-SEP-2006 for the main bank branches (Rafidain Bank, Rasheed Bank, Bank of Baghdad, Commercial Bank, Middle East Bank). The number of participants has increased since then, there are now more than 19 banks in addition to the CBI branches.
• CBI branches employee (in Basra, Erbil, Mosul, and Sulaimaniya) have been trained to install the system for bank's branches to facilitate the transaction processes within Iraq.
• The Electronic Clearing Cheque System is part of Automated Clearing House System. Its execution started with the Bank of Baghdad, the Middle East Bank, the Credit Bank, Dar El Salam Bank, the Commercial Bank, and the Trade Bank of Iraq. There are now 17 participant banks.
• It has been agreed with participant banks to also take on some of the responsability of their own training and be prepared for further testing environments.
• Training of Iraqi and foreign banks branches will be provided until full participation is achieved.

3. Government Securities Registration system - GSRS

• The system manages the government securities issued by CBI and Ministry of Finance (MOF). Through this system the CBI has a greater control over liquidity. The system was activated in November 2008.
• The system manages the process of auctions for the issuance of government securities – Primary Markets.
• The system keeps the main recordes, including interest payments and repayment of the debts.
• The system handles the settlement of processes of government financial securities between the market and participating banks – Secondary Market.
• Saving and archiving processes.
• GSRS system connects with RTGS for completing the financial settlement operation on participant accounts in RTGS.
• The GSRS relates with C-ACH for presenting information on the status of collateral at the begining of each session.

Names of bank participants in IPS

Bank name

RTGS

C-ACH

GSRS

ACH

CEP

Abu Dhabi Islamic bank

X

 

 

 

Agricultural cooperation bank

X

X

 

X

Al-Bilad Islamic bank for investment and finance

X

 

 

 

AlHuda bank

X

 

 

X

Ashur international bank for investment

X

X

X

X

Babylon bank

X

 

 

 

Bank Melli Iran

X

 

 

 

Bank of Baghdad

X

X

X

X

Bank of Beirut and Arab countries

X

 

 

 

Bank of Erbil

X

 

 

 

Basrah international bank for investment

X

 

 

 

Byblos bank

X

 

 

X

Cihan bank for Islamic investment and finance

X

 

 

 

Commercial bank of Iraq

X

X

X

X

Credit Bank of Iraq

X

X

X

X

Dar Essalaam investment bank

X

X

X

X

Dijlah and furat bank for development and investment

X

 

 

 

Economy bank for investment and finance

X

 

 

X

Elaf Islamic bank

X

X

X

 

Emerald bank

X

 

 

 

Gulf commercial bank

X

X

X

X

Industrial bank of Iraq

X

 

 

X

Intercontinental bank of Lebanon

X

 

 

X

Investment bank of Iraq

X

X

 

X

Iraq bank

X

 

 

 

Iraqi Islamic bank for investment and development

X

 

 

 

Iraqi middle east bank for investment

X

X

X

X

Islamic regional cooperation bank for development and investment

X

 

 

X

Kurdistan international bank for investment and development

X

X

X

 

Mansour bank for investment

X

 

 

X

Mosul bank for development and investment

X

X

X

X

National bank of Iraq

X

X

X

X

National Islamic bank

X

 

 

X

North bank for finance and investment

X

 

 

 

Rafidain bank

X

X

 

X

Rasheed bank

X

X

 

X

Real-estate bank

X

 

 

X

Sumer commercial bank

X

 

 

 

Trade bank of Iraq

X

X

X

X

Trans Iraq bank

X

 

 

X

Turkey agricultural bank

X

 

 

 

Union bank of Iraq

X

 

 

 

United bank for investment

X

X

X

X

Warka bank

X

http://www.cbi.iq/index.php?pid=PaymentSystems

 

The contract was awarded last week, my question is if all 3 structures have been activated wouldn't it mean they are on line and have been for a long time.  As far as the secondary market, stocks, bonds, options, since 2012 they are doing that now.  So the contract which you mention and awarded last week was for what do you remember?  Very curious.  Perhaps it was to manufacture the cards.  If so and everything is ready, we may see this sooner than later.  

 

Again thanks Rayzor, very appreciative.  I want to add, I am not suggesting once the cards arrive we will see an RV, Float, RD or a pop tart, however I feel they are significant for the reduction of cash.

Edited August 31, 2013 by zigmeister

[sandstorm]

Economy laws will eventually pass, so will the hcl, so will the banking laws. That's inevitable. The question is will it be the current currency or the new currency they talk about releasing?

140, national conventions, all that stuff will happen whether or not they delete zeroes or rv!

[zigmeister]

Economy laws will eventually pass, so will the hcl, so will the banking laws. That's inevitable. The question is will it be the current currency or the new currency they talk about releasing?

140, national conventions, all that stuff will happen whether or not they delete zeroes or rv!

What I wonder Sandstorm, could they change their currency code, RD and pass out the cards.  They wouldn't have to print that much new currency and coins.  

[Rayzur]

The contract was awarded last week, my question is if all 3 structures have been activated wouldn't it mean they are on line and have been for a long time. As far as the secondary market, stocks, bonds, options, since 2012 they are doing that now. So the contract which you mention and awarded last week was for what do you remember? Very curious. Perhaps it was to manufacture the cards. If so and everything is ready, we may see this sooner than later.

I am not suggesting once the cards arrive we will see an RV, Float, RD or a pop tart, however I feel they are significant for the reduction of cash.

Ziggy...

I was so frustrated trying to get the docs to download, I was probably remiss in articulating their relationship.... apologies...

The contract that was awarded last week, was for the creation of the infrastructure specified in the first doc I attached: the INPRS I

Meaning as I read it, that the infrastructure tying all these other software systems, or processes or whatever is existing, together into one system, has not yet been created / implemented with the contract for the creation of such being just awarded last week...

I'm way out of my league in this next guess, having not sufficiently read or digested let alone understood the mechanics of their financial infra structure,.... however, if I were to guess:

• I would guess that all the systems and software you referenced above does indeed exist and is in place and is functional as is stated....
• that the INPRS I wither ties it all together, replaces some of it, updates some of it, or becomes the over arching shell through which all of these other systems/ software/hardware/ are processed, handled and recorded

That's just a guess... When you think about it, in this country there are a ton of processes and systems and soft/hard ware handling our financial transactions.... Iraq gets the opportunity to build it correctly from the ground up and won't have to piecemeal and patch things together like we do, in order to make it run efficiently, effectively and with accountability. And again, I'm just guessing how it all might fit together.

However, what is clear from the attached documents, the grand daddy over arching infrastructure putting it all together is yet to be built, was just awarded by bid, and is to be built henceforth. I've no clue how long that might take... and who knows.. maybe a few months, maybe a year.. not sure.

Its also evident from the table I didn't download, that they are only 5 months behind their projected timeline for awarding the INPRSI I bid. I'll dig around around later and see if I have any emails referencing the actual build timeline.

The other thing I noticed is how invested the entire ME is in smart cards, or transaction cards and moving to a totally paperless system. I think I have an email that says Bahrain (maybe Dubai can't remember) is the first ME country to achieve the ME goal of having an entirely electronic system absent the use of currency. There's a huge push and goal of the entire ME to become completely electronic absent the use of currency. Maybe the INPRS I is part of linking Iraq with the GCC? (I didnt read it that close). As you research the whole thing, you'll notice that the biometric cards are a huge deal as well...

Not sure where this is going, but whenever I read about this stuff I always flash back on those sci-fi movies wherein there is no paper currency, its all electronic, and the bad guys mess with the good guys but tracking them electronically, cutting them off the monetary grid, then capturing them... Never did like those movies as a possible lifestyle... and the longer I live the more I am convinced that we had it all backward, and instead;

Life imitates Art....

Edited August 31, 2013 by Rayzur

[zigmeister]

Ziggy...

I was so frustrated trying to get the docs to download, I was probably remiss in articulating their relationship.... apologies...

The contract that was awarded last week, was for the creation of the infrastructure specified in the first doc I attached: the INPRS I

Meaning as I read it, that the infrastructure tying all these other software systems, or processes or whatever is existing, together into one system, has not yet been created / implemented with the contract for the creation of such being just awarded last week...

I'm way out of my league in this next guess, having not sufficiently read or digested let alone understood the mechanics of their financial infra structure,.... however, if I were to guess:

• I would guess that all the systems and software you referenced above does indeed exist and is in place and is functional as is stated....
• that the INPRS I wither ties it all together, replaces some of it, updates some of it, or becomes the over arching shell through which all of these other systems/ software/hardware/ are processed, handled and recorded

That's just a guess... When you think about it, in this country there are a ton of processes and systems and soft/hard ware handling our financial transactions.... Iraq gets the opportunity to build it correctly from the ground up and won't have to piecemeal and patch things together like we do, in order to make it run efficiently, effectively and with accountability. And again, I'm just guessing how it all might fit together.

However, what is clear from the attached documents, the grand daddy over arching infrastructure putting it all together is yet to be built, was just awarded by bid, and is to be built henceforth. I've no clue how long that might take... and who knows.. maybe a few months, maybe a year.. not sure.

Its also evident from the table I didn't download, that they are only 5 months behind their projected timeline for awarding the INPRSI I bid. I'll dig around around later and see if I have any emails referencing the actual build timeline.

The other thing I noticed is how invested the entire ME is in smart cards, or transaction cards and moving to a totally paperless system. I think I have an email that says Bahrain (maybe Dubai can't remember) is the first ME country to achieve the ME goal of having an entirely electronic system absent the use of currency. There's a huge push and goal of the entire ME to become completely electronic absent the use of currency. Maybe the INPRS I is part of linking Iraq with the GCC? (I didnt read it that close). As you research the whole thing, you'll notice that the biometric cards are a huge deal as well...

Not sure where this is going, but whenever I read about this stuff I always flash back on those sci-fi movies wherein there is no paper currency, its all electronic, and the bad guys mess with the good guys but tracking them electronically, cutting them off the monetary grid, then capturing them... Never did like those movies as a possible lifestyle... and the longer I live the more I am convinced that we had it all backward, and instead;

Life imitates Art....

 

Aha so this is what that is about, http://www.cbi.iq/documents/Announcemen-en.%20%282013-d.5%29.pdf  I remember the announcement via CBI.  I would agree they are planning to put everything under one roof and one card.  Perhaps this is the hold up in producing new cards as of recent?  I would not be surprised this is why everything may be at a standstill.  Interesting.

 

Life usually does imitate art in some respect.  There are many reasons they would want a cashless society.  Terrorism, counterfeiting, money laundering, robberies and so forth.  They could reign in on many illegal activities via info on cards.  It also can be used against the people as well, which is bound to happen.

[Rayzur]

The entire ME wants to go electronic. Tracking will be easier for sure, especially if they go to a GCC and regional currency as projected and anticipated by the IMF.... That was "supposed to" happen in 2010, and was pushed out to 2015 subsequent to the Euro problems.... I'm not so sure they are as worried about terrorists as are we. They find other ways to justify engagement... like they just go do it... They have mastered poking the other guy with a stick and thereafter looking baby fresh innocent. 

 

I think the cards are done... the contracting company finished their project some time ago. I don't know if however, it has found its way down to the smallest of little guys. Can't remember fully, but do remember reading with fascination something to the effect that transactions will be able to happen without hardware POS machines... Something about the card itself would transmit... Or something to that effect... I was skimming for other stuff and didn't really focus, but was left with impression that there is incredibly sophisticated stuff in place for the very un sophisticated rural transaction environment. 

 

There remains in my mind, that question as to whether or not the over arching infrastructure (which is NOT done) is necessary to revalue their currency? They are transacting all day long. They are making deals and fulfilling them all day long. It seems in support of this necessity is the notion that a healthy chuck of this  of this transacting is still done in the dollar...or the dollar is still too prevalent in their economy and the infra structure would allow them to completely de dollarize.... On the other hand... raising the value of the dinar might accomplish the same thing? I'm floating a bit too far off the shores of what I really understand in macro economics... so that is just a wild azzzzz guess.... ???  

[zigmeister]

The entire ME wants to go electronic. Tracking will be easier for sure, especially if they go to a GCC and regional currency as projected and anticipated by the IMF.... That was "supposed to" happen in 2010, and was pushed out to 2015 subsequent to the Euro problems.... I'm not so sure they are as worried about terrorists as are we. They find other ways to justify engagement... like they just go do it... They have mastered poking the other guy with a stick and thereafter looking baby fresh innocent. 

 

I think the cards are done... the contracting company finished their project some time ago. I don't know if however, it has found its way down to the smallest of little guys. Can't remember fully, but do remember reading with fascination something to the effect that transactions will be able to happen without hardware POS machines... Something about the card itself would transmit... Or something to that effect... I was skimming for other stuff and didn't really focus, but was left with impression that there is incredibly sophisticated stuff in place for the very un sophisticated rural transaction environment. 

 

There remains in my mind, that question as to whether or not the over arching infrastructure (which is NOT done) is necessary to revalue their currency? They are transacting all day long. They are making deals and fulfilling them all day long. It seems in support of this necessity is the notion that a healthy chuck of this  of this transacting is still done in the dollar...or the dollar is still too prevalent in their economy and the infra structure would allow them to completely de dollarize.... On the other hand... raising the value of the dinar might accomplish the same thing? I'm floating a bit too far off the shores of what I really understand in macro economics... so that is just a wild azzzzz guess.... ???  

Good post.  So we wait for the coming days so to speak, as always.  I have lost some of my traction on this.....I am sure Iraq will peak my curiosity again in the coming days, or someone like me.  The question is what is necessary for a currency movement, one way or another?  It seems many in Iraq in high places wonder this as well.  No Turki chat as of late, sometimes no words speaks volumes.  We will see.

[justchecking123]

Whoa.

 

You two guys really dig hard, and I must give credit where it's due.

 

 

Carry on..

[dontlop]

Economy laws will eventually pass, so will the hcl, so will the banking laws. That's inevitable. The question is will it be the current currency or the new currency they talk about releasing?

140, national conventions, all that stuff will happen whether or not they delete zeroes or rv!