Iraqi banks should be given greater freedom to trade currency; Let market determine IQD value says Securties Commission Chief

[rvhope]

Iraqi banks should be given greater freedom to trade currency; Let market determine IQD value says Securties Commission ChiefPosted: September 22, 2013 in Iraqi Dinar/Politics
Tags: Baghdad, Central bank, Currency, Dr. Abdul Razzaq al-Saadi, exchange rate, iraqi, Iraqi dinar, United States Senate Committee on Finance

Al-Saadi urges to give banks greater trading currency

23/9/13 12: 00 am

Baghdad-Farah pumice
The view of the Chairman of the Securities Commission, Dr. Abdul-Razzaq Al-Saadi, the Iraqi dinar will not be affected by regional events.

Al-Saadi said in the SMC (morning): “the dinar exchange rate specified by a market economy, it is determined by the supply and demand for currency, regional events, particularly in the region does not affect the Iraqi currency, linked to the availability of controls on Iraqi currency in circulation of funds so that such events will not affect the economy.”

the President found that the dinar exchange rate against the US dollar, Especially the private banks idle in select trading process for hard currency, urging to give them ample freedom to determine policy for the imposition of strict control measures on the policy, then this process will move the market and dinar revaluation of cash.

the parliamentary Finance Committee had announced the formation of a small Committee composed of three members of the control mechanisms of the dinar against the dollar, saying the action by the Central Bank recently led To address the problem gradually.

Parliament was a guest last month Central Bank Governor Abdel Basset Turki Agency and discussed the reasons for the high price of the dollar to dinar.

===

Saadi urges banks to give a wider space for currency trading

23/09/2013 12:00 AM

BAGHDAD – Farah pumice
saw the head of the Securities Commission, Dr. Abdul Razzaq al-Saadi said the Iraqi dinar will not be affected eventful regional. Saadi said in a statement to the (morning): “The exchange rate of the dinar specific market economy, because it is determined by supply and demand for the currency,” adding The regional events, especially in the region does not affect the Iraqi currency, stressing that this is linked to the availability of control to rotate the Iraqi currency in the market for money and thus will not affect those events in the economy.

“and found the Chairman of the Commission that the exchange rate of the dinar against the U.S. dollar is limited, especially that sector banks Special idly by in the identification process of trading for hard currency, urging on giving them a wide area of freedom to determine its policy, against the imposition of strict measures to control this policy, thus lead this process to move the dinar in the market and raise the monetary value.

Should be noted that the Commission Parliamentary Finance has announced the formation of a small committee consisting of three deputies to observe the mechanisms Iraqi dinar exchange rate against the dollar, stressing that the practical measures undertaken by the central bank recently led to address the problem gradually.’s parliament has guest last month, the central bank governor Agency Abdul Basit Turkish and discussed with him the reasons for the high price of the dollar against the dinar.

http://bit.ly/18NgUII

 

[jeepguy]

thanks r.v. hope   ,,,  looks like if they will let the values rise, and not quibble about what -- it might do ,  let the dinar go ahead and rise against the other currencies,  to market value ,  looks like 1160 right now,  if they wish to keep the foreign money rolling.  just push the dinar up to the .25 cents rate , and watch the float ......

[deniscanada]

“the dinar exchange rate specified by a market economy, it is determined by the supply and demand for currency, regional events, particularly in the region does not affect the Iraqi currency

looks like what ever the rate of the dinar will move to, it wont be affected by the BS going on in the country. its strictly supply and market place and world demand. hmmmmm

Edited September 23, 2013 by deniscanada

[yota691]

Saadi urges banks to give a wider space for currency trading

 

23.9.2013 | (Voice of Iraq) - Add a comment - 

 

BAGHDAD - Farah pumice 

saw the head of the Securities Commission, Dr. Abdul Razzaq al-Saadi said the Iraqi dinar will not be affected eventful regional. Saadi said in a statement to the (morning): "The exchange rate of the dinar specific market economy, because it is determined by supply and demand for the currency," adding The regional events, especially in the region does not affect the Iraqi currency, stressing that this is linked to the availability of control to rotate the Iraqi currency in the market for money and thus will not affect those events in the economy. "and found the Chairman of the Commission that the exchange rate of the dinar against the U.S. dollar is limited, especially that sector banks Special idly by in the identification process of trading for hard currency, urging on giving them a wide area of freedom to determine its policy, against the imposition of strict measures to control this policy, thus lead this process to move the dinar in the market and raise the monetary value. should be noted that the Commission Parliamentary Finance has announced the formation of a small committee consisting of three deputies to observe the mechanisms Iraqi dinar exchange rate against the dollar, stressing that the practical measures undertaken by the central bank recently led to address the problem gradually.'s parliament has guest last month, the central bank governor Agency Abdul Basit Turkish and discussed with him the reasons for the high price of the dollar against the dinar.

 

[DinarBam]

“the dinar exchange rate specified by a market economy, it is determined by the supply and demand for currency, regional events, particularly in the region does not affect the Iraqi currency

looks like what ever the rate of the dinar will move to, it wont be affected by the BS going on in the country. its strictly supply and market place and world demand. hmmmmm

 Exellent......supply and demand! I have a supply of Dinar and I demand that it increase in value. Now, lets see if that works.   

[Maja1962]

"...urging to give them ample freedom to determine policy for the imposition of strict control measures on the policy, then this process will move the market and dinar revaluation of cash."

 

Gotta love the sound of that...

 

GO RV!!!!!!!!!!!!!!!!!!!!!

[Kaduku]

CBI and GOI should let them. They will see within months how strong their currency will be against other currencies, and their Market Economy expand to such huge growth. Nothing short of the Post Saddam currency value of $3.30 and Iraq's currency will BOOST GLOBALLY!

 

 

 

Let it happen!

 

 

 

"GOD BLESS AMERICA"!

[Rabbi]

They is no way in the world that the exchange rate of the dinar will "free float" from where it's at now to $1. To rise from its current value ($.00086/dinar) to just 1/10 of a penny is a 16.28% increase {(.001 - .00086)/.00086).  Using the same math, the rise to just a $.01/dinar (a penny), under the free float, will mean that the exchange rate of the dinar will "float" up by 1062.79%.  To "float" up to a dime, the exchange rate will have to increase by 11,527.9%.  To get to $1/dinar, from its current price, the exchange rate will have to "float" upward by 116,179%!!!!!  That's anything but a float.

 

Who could do business in Iraq with the value of the currency changing soooooo wildly?  Nobody!  The price of goods and services would have no meaning.  Shopkeepers will have to be changing their prices by the hour. There's no way the IMF would want the dinar to be so unstable right out of the shoot.  Of course not. 

[sandstorm]

They is no way in the world that the exchange rate of the dinar will "free float" from where it's at now to $1. To rise from its current value ($.00086/dinar) to just 1/10 of a penny is a 16.28% increase {(.001 - .00086)/.00086).  Using the same math, the rise to just a $.01/dinar (a penny), under the free float, will mean that the exchange rate of the dinar will "float" up by 1062.79%.  To "float" up to a dime, the exchange rate will have to increase by 11,527.9%.  To get to $1/dinar, from its current price, the exchange rate will have to "float" upward by 116,179%!!!!!  That's anything but a float.

 

Who could do business in Iraq with the value of the currency changing soooooo wildly?  Nobody!  The price of goods and services would have no meaning.  Shopkeepers will have to be changing their prices by the hour. There's no way the IMF would want the dinar to be so unstable right out of the shoot.  Of course not.

true. Welcome to the world of economics.

The cbis goal is to keep the currency stable. Moves of 100,000% is. Anything but stable

[WISKY291]

Thanks RV Hope

[ReVbo]

They is no way in the world that the exchange rate of the dinar will "free float" from where it's at now to $1. To rise from its current value ($.00086/dinar) to just 1/10 of a penny is a 16.28% increase {(.001 - .00086)/.00086).  Using the same math, the rise to just a $.01/dinar (a penny), under the free float, will mean that the exchange rate of the dinar will "float" up by 1062.79%.  To "float" up to a dime, the exchange rate will have to increase by 11,527.9%.  To get to $1/dinar, from its current price, the exchange rate will have to "float" upward by 116,179%!!!!!  That's anything but a float.

 

Who could do business in Iraq with the value of the currency changing soooooo wildly?  Nobody!  The price of goods and services would have no meaning.  Shopkeepers will have to be changing their prices by the hour. There's no way the IMF would want the dinar to be so unstable right out of the shoot.  Of course not. 

 

 

 

true. Welcome to the world of economics.

The cbis goal is to keep the currency stable. Moves of 100,000% is. Anything but stable

 

 

So, what do you guys think is gonna happen? The head of the ISX is pretty clearly calling for a float based on supply and demand here. You think he wants it to just come out at 1166 and trade around that number permanently? Or, Rabbi, are you saying there's no way they float it from there and they have to start at, say, a dollar? 

 

They are pretty heavily dollarized at the moment, and most retailers don't even accept the busted old dinars that are currently in the market. If they float it now, and it changes rapidly, they can continue to price things in dollars until the dinar finds a stable trading range. I'm not saying it's gonna go up 100,000% in a week, but I've seen quite a few statements recently, in Iraqi news, that the dinar is "grossly undervalued," so I would think it's gonna go up.

 

Oh, and those negs weren't me.

Edited September 23, 2013 by ReVbo

[PrettyKitty]

we are most likely reading it wrong. What they are saying.....GO RV

[dontlop]

Iraq has floated it's currency before and it climbed around 250 percent from 2005 through 2008

Keeping the currency stable means just that it doesn't mean holding it at the same price forever

Before they gave it any real value they had to prove to themselves their policies worked and the currency was able to hold its value

Now they have proven policies they can revalue and return to their policies and keep it stabilized

Floating a currency is no guarantee of stability

They need to adjust the value and continue on the course they are on otherwise we could be looking at a century to get the dinar up to 3 bucks again

I don't think that's the cbi Intentions

I think we will see a new currency with increased value with a pegged exchange rate from old dinars to new dinars

Rates could be any where from 300 to one to 1000 to one

That's it that's what I see coming down the pike

[calkid11]

I AGREE PRETTY KITTY.....GO RV

[sandstorm]

So, what do you guys think is gonna happen? The head of the ISX is pretty clearly calling for a float based on supply and demand here. You think he wants it to just come out at 1166 and trade around that number permanently? Or, Rabbi, are you saying there's no way they float it from there and they have to start at, say, a dollar?

They are pretty heavily dollarized at the moment, and most retailers don't even accept the busted old dinars that are currently in the market. If they float it now, and it changes rapidly, they can continue to price things in dollars until the dinar finds a stable trading range. I'm not saying it's gonna go up 100,000% in a week, but I've seen quite a few statements recently, in Iraqi news, that the dinar is "grossly undervalued," so I would think it's gonna go up.

Oh, and those negs weren't me.

When a country is dollarized, the central bank cannot control the money supply. Thats a fact. We see the dinar m2 and currency in circulation continue to rise and rise. Like 80trillion and climbing daily. That's my biggest problem

They haven't reduced dinar. They have increased it.

Learn about the horrible effects of dollarization, and you will see our dilemma. Sure the Dinar could go to 1000 or 500 possibly, but much more than that, and the economy fails. Economics of central bank policy, is what guided that opinion. Not what I was hoping to learn during research. But to rv anyways.

Edited September 23, 2013 by sandstorm

[jg1]

 

 

An empirical finding suggests that inflation has been significantly lower in dollarized nations than in non-dollarized ones.[18] The expected benefit of dollarization is the elimination of the risk of exchange rate fluctuations and a possible reduction in the country's international exposure.

 

Previously, Iraqis were allowed to buy as many dollars as they wanted as the Central Bank furnished both private and state-owned banks with millions of dollars every day.

But there has been an unprecedented demand for the dollar to the extent that the Central Bank feared it could no longer keep drawing on its hard cash reserves to meet local needs.

Iraqis willing to buy the dollar at official rates, which are lower than rates prevalent in the open market,

 

To stem a rush on the U.S. the dollar, the government has forbidden banks from selling the currency at official prices, restricting the trade to two branches of the state-run al-Rasheed Bank.

 

So basically  too many dollars leaving the country. Less dollars equaled higher inflation. By limiting the sale of dinar caused Iraq citizens to keep dollars for themselves to buy imported goods rather sending them out of country for a profit. 

August 25, 2011. 

Aug 14, 2013 -The central bank in war-torn Syria has lifted restrictions on the sale of dollars to individuals, ... has lifted restrictions on the sale of dollars to individuals, in a bid to curb black market trade.

 

Oct 3, 2012 - Iraq's central bank has eased restrictions on the sale of dollars 

[Zebra0101]

Soon, tomorrow....  

[JMULS31]

rvhope, I had my translator look at your link that was written in Arabic. http://bit.ly/18NgUII

 

 He said that I said, that the Iraqi Dinar will not be affected by whats going on in Syria.  that's all that article was talking about...

[outlawclg]

rvhope, I had my translator look at your link that was written in Arabic. http://bit.ly/18NgUII

 

 He said that I said, that the Iraqi Dinar will not be affected by whats going on in Syria.  that's all that article was talking about...

 

Thanks for the translation from the translator.

[dontlop]

rvhope, I had my translator look at your link that was written in Arabic. http://bit.ly/18NgUII  He said that I said, that the Iraqi Dinar will not be affected by whats going on in Syria.  that's all that article was talking about...

Thanks it makes sense now

I did not understand why he would call on banks to change monetary policy the banks can only follow the banking laws not change them

Iraq has floated it's currency before and it climbed around 250 percent from 2005 through 2008Keeping the currency stable means just that it doesn't mean holding it at the same price foreverBefore they gave it any real value they had to prove to themselves their policies worked and the currency was able to hold its valueNow they have proven policies they can revalue and return to their policies and keep it stabilizedFloating a currency is no guarantee of stabilityThey need to adjust the value and continue on the course they are on otherwise we could be looking at a century to get the dinar up to 3 bucks againI don't think that's the cbi IntentionsI think we will see a new currency with increased value with a pegged exchange rate from old dinars to new dinarsRates could be any where from 300 to one to 1000 to oneThat's it that's what I see coming down the pike

I need to correct this

Iraq didn't float the dinar in the past they changed the monetary policy from stabilized arrangement to a crawling peg where they adjusted the rate to make the dinar stronger from around 3500 to 1170 around 300 percent increase

[Rabbi]

 Rabbi, are you saying there's no way they float it from there and they have to start at, say, a dollar? 

 

 

 

Yes, IMHO, there is no way they will float it from 1,166 dinars/$.  We know from the April, 2012 SIGIR report last year that the plan was to RV the dinar to "slightly less than $1," which I interpret as $.86/dinar, i.e., removing the leading zeroes from the exchange rate.   From an economic standpoint, nothing has fundamentally changed in Iraq since that report.  In fact, their economy has improved since that report.  So why would the plan to RV the currency suddenly be shelved in favor of a free float?  It wouldn't be.

 

I think that we will see the Iraq RV to $.86/dinar (or inverted equivalent, 1.16 dinars/$), followed by a managed float.  Has anyone read the latest statement by Shabibi last week?  He mentions that the difference between the "bank rate" and the "market rate" should never be more than 2%, and he talks about this 2% amount a number of times.  2% is the magic number in a managed float.  And once again, the IMF likes stability in the exchange rates.  The managed float gives this stability, while also allowing for market forces to influence the exchange rate up or down by no more than 2% every 90 days.  It's the only solution for this currency.  It works for commerce in-country, and it works for investment from outside the country.  Doing business internationally requires the consideration of potential gains and losses from currency translation.  With this ridiculous "free float" scenario, a foreign business could sign a contract, to be paid in dinars, and by the end of the day, the dollar-equivalent of those dinars could be 3-5 times as much.  Sorry, but that just won't fly...and neither does the free float idea. 

 

Let's remember that a managed float is also a "floating orbit of exchange."

[BelievingInTheBest]

Rabbi; thank you for the clarification on you thinking. Your contractor example shines some light on a very good point regarding a staging rate.