$1.13 to $3.21 Iraqi Ministry of Planning

[new york kevin]

Hello There fellow Dinarians. Has anyone seen this before? Just got it off the Iraqi Ministry of Planning. It states our IQD could support a buck plus right now. Hope it aiint old.

 

 

The Exchange Rate of Foreign Currency in Economic Feasibility Studies

 

Below are the central controls related to the exchange rate of the foreign currency to convert the project inputs and outputs from foreign currency to its equivalent in the local currency, and that is by calculating the net discounted present value standard and the internal return on investments in economic analysis that governs investment projects that costs excess one million dinars.

 

Estimate the shadow price of foreign currency:

 

1. It is necessary to put central controls to amend the official exchange rate * to reflect the shadow price of the foreign currency, and that is considered one of the necessary  requirements to implement  the net discounted present value standard and the internal return rate on investment in the economic calculation stated in the instructions, paragraph nine.

The central controls for adjusting market prices distinguished a group of outputs and inputs traded internationally, where the projects production or usage of them is reflected on the abundance of foreign currency in the economy and thus project outputs or inputs used of such are considered purely foreign currency outputs or inputs.

 

 

 

 

* What is meant by exchange rate: the number of units of foreign currency, expressed in dollar per one dinar.

In particular the following outputs and inputs of foreign currency were distinguished:

 

• Export-outputs.
• Outputs marketed locally that substitute imports.
• Imported inputs.
• Inputs produced locally that usually go to exports.
• Foreign labor.

According to the pricing rules the value of the output and input (traded) is calculated using export prices (FOB) and import prices (CIF), according to what is listed in the pricing rules.

In other words the pricing rules calculate what the project produces from foreign currency (quantity of exports multiplied by the export price (FOB) in foreign currency or the quantity of substitute imports multiplied by the import price (CIF) in foreign currency, as well as what the project uses from foreign currency and imported inputs multiplied by the import price (CIF) in foreign currency .... etc.).

In a later step, project outputs and inputs must be converted from the foreign currency to its equivalent in local currency (dinars) by using a specific exchange rate for the foreign currency.

 

 

1. Justifications for exchange-rate adjustment: there are a number of important and powerful arguments which support the view that the official exchange rate reduces the real value of foreign currency for purposes of calculating the  economic national profitability for investment projects and hence for the purposes of investment planning. It is demonstrated in this context to call for assessing the dinar for less than (3.208) dollar (official exchange rate) when assessing project outputs and inputs of traded goods of exports, substitute imports and imports... etc.

 

The justifications to call for the use of an exchange rate that is lower than the official exchange rate are:

 

• The use of an exchange rate that is lower than the official rate is the appropriate action at the investment planning level to translate the country’s economic strategy aiming at stimulating central investments in the sectors that encourage the development of non-oil exports, as well as sectors that encourage the expansion of domestic production base in order to reduce imports and compensate it with local commodities. This helps to reduce reliance on foreign exchange earnings from crude oil exports and increases the share of non-oil sectors in the local production.

 

• The application of the amended exchange rate on project imported inputs will assist in directing investments away from aggregated sectors dependent on imported inputs and the preference of those sectors that rely on locally produced inputs.

 

• The use of the amended exchange rate helps to correct the balance in favor of the traded goods sectors compared to non-traded goods.

 

• The real exchange rate has declined rapidly since the early seventies, through rapid rise of the level of prices and local costs which led by the steadiness of the official exchange rate to change in prices and actual local rate costs that gave an advantage for imported goods at the expense of locally produced goods, meaning that it led to deterioration of the competitiveness of alternative replacement goods and export commodities.

 

• This action shows that the official exchange rate overestimates the value of the dinar, compared to the foreign currency and from the promoting goods substituting imports and export commodities point of view of.

 

And in support to this view is the state’s utilization and in a broad approach to the customs and quantitative protection policies especially for consumer goods, as well as export subsidies that exports have through an amended export exchange rate.

 

 

1. Estimate the amended exchange rate of the Iraqi dinar to be used in technical and economical feasibility studies and for (1.134) dollar per dinar. This price should be approved for 3 years until re-appreciation by the competent authorities.

Edited October 4, 2013 by Markinsa
Inserted Source Link in Title

[Markinsa]

Kevin, We need a link to keep this article in the news section.

 

Thanks!

 

-

[jeepguy]

good job kevin ,  most likely this will bring in folks who will associate this article , with the  Iraqi stock market, I don`t see why they go there , but only the reference to the out going and incoming look like  -- market speak --   trade language ,   I think we have seen one other topic where the  a minister of finance  spoke about how the dinar could with stand a value of 2 dollars  and 50   {2.50}   and they made this as the value of trade against the stock market rates of values,  but I like the fact your article has another member saying the dinar can and might be worth 1.13 ,,,,  I just can`t grasp why it is seemly taken so long to push the values of dinar up ,,, except they have no lower notes to off set the difference to make change ,  and they keep talking about  banking laws ,  [ but with these in the picture and your article ----> hoping this pops ,  like  next week  }   

[deniscanada]

this is a link that i found for this article http://www.mop.gov.iq/mop/index.jsp?sid=1&id=308&pid=295&lng=en

Edited October 4, 2013 by deniscanada

[new york kevin]

Markinsa: Sorry. This is my first time posting something like this. I hoped mentioning Iraqi Ministry of Planning would have qualified. My bad. Hope this works.

 

The link is :    http://www.mop.gov.iq/mop/index.jsp?sid=1&id=308&pid=295&lng=en

[WorkerBee]

Yea!  Oh wait!  the very last line says...This price should be approved for 3 years until re-appreciation by the competent authorities.  Houston, I think we have a problem.

[jeepguy]

1.13  until re-appreciation after 3 years --------  to jump up to a better rate ?   if they like the dinar by then ,,,,  thanks kevin 

[deniscanada]

jeepguy

i haven’t seen that article on the (value of 2 dollars and 50 {2.50})  could you post it here, or private

message it to me. i would like to read it please and thanx

1.13  until re-appreciation after 3 years --------  to jump up to a better rate ?   if they like the dinar by then ,,,,  thanks kevin 

i think you are correct. i can live with that.

[Markinsa]

Markinsa: Sorry. This is my first time posting something like this. I hoped mentioning Iraqi Ministry of Planning would have qualified. My bad. Hope this works.

 

The link is :    http://www.mop.gov.iq/mop/index.jsp?sid=1&id=308&pid=295&lng=en

 

That's perfect!  Thanks!

[new york kevin]

Jeepguy: Thanks. Hope everyone also reads that its a Iraqi Ministry of Planning estimated amended exchange rate regarding the $1.13 that should be good for 3 years. (This towards the bottom of the article.) Plus, a potential justification for an exchange rate adjustment at $3.21  . (This about middle of the article.) The in between info can give us all some insight to the mechanics of how things look or work inside of GOI. I think it can be said that once it does RV at whatever 10 cents or $1.13 that we may have up to a 3 year window to cash in, depending on how market reactions affect the market price. Those competent people may want to close it a little eariler if the market rate jumps to the $3 range to fast. They still got infrastructure to build ya know. Just my

[vietnam1969]

This would be very nice to wake up to one morning.  When is the big question now. Thanks for the post New York Kevin.

[DropItLikeItsHot]

Thanks Kevin, GREAT POST!! Just popped in and read it first, made my day a bit brighter. Now if the GOI and Iraq would get off their A$$E$ and do it life would be Grand.

 

 

DropItLikeItsHot  GO RV

[TBomb]

I like to check out page properties and so I opened up this page link and viewed the source code. It does seem this page was created in 2012 or that's the MOP's copyright date.

[Dinar Buddy]

The website is bogus.  No author names, no phone number to contact.  The other piece add to the website that I thought was odd was the visitor counter... that is not normal for a government website.

 

Gurus hide and pump this IQD any way possible!  haa haa haa

[jg1]

This all looks familiar. Old stuff I believe.

[new york kevin]

DB: I ain't no Guru just a common Joe on the street. But I think I hear what your saying.

 

TBomb, I think that 2012 was the date the Ministry of Plannig in Iraq copyrighted " MoP " and/or the website or link.  eh.

[Doctor Smith]

I think I first saw it in 2010. If it's an actual bogus site I wish some government 3 letter agency would do their job for just once and prosecute  these pumpers. Probably too busy tending to their opium crops.

[TBomb]

This is the section this falls in:

 

"Home  The Ministry In Brief  Capital Budget & Public Contracts  Planning Budget  The Exchange Rate of Foreign Currency in"

 

This is the proposed rate for contract...DB again with the fake website stuff??? You gotta get a new MO.

[George Hayduke]

The website is bogus.  No author names, no phone number to contact.  The other piece add to the website that I thought was odd was the visitor counter... that is not normal for a government website.

 

Gurus hide and pump this IQD any way possible!  haa haa haa

You could be right but I think you're wrong on this one DB.  The UN  http://iq.one.un.org/ gathers and uses data from the Ministry of Planning http://iq.one.un.org/documents/246/Press%20Release%20Iraqi%20Ministry%20of%20Planning.pdf

 

If it's legit it's a great find.

 

GH

[DayTrader]

The site is real. The article is old. I saw this in 2010. So Says.................DayTrader

[TBomb]

http :// www .mop . gov .iq /mop   this is the website base address which I got directly from the link NYK posted. See the "iq" in the address, it's an official Iraqi govt website..now about the age of this, I have no idea.

[PrettyKitty]

1. Thank you Kevin: don't leave us, your search is well taken....Go RV

[TBomb]

Yes, Kevin..thanks very much, please keep contributing..great job. 

[Zebra0101]

So much planning and so much not doing anything is going on.

[Butifldrm]

OK, this article is actually from 2011.  here's where I posted it in 2012.

 

Posted 10 October 2012 - 05:57 PM

Home  The Ministry In Brief  Capital Budget & Public Contracts  Planning Budget  The Exchange Rate of Foreign Currency in.  The Exchange Rate of Foreign Currency in Economic Feasibility Studies 

Below are the central controls related to the exchange rate of the foreign currency to convert the project inputs and outputs from foreign currency to its equivalent in the local currency, and that is by calculating the net discounted present value standard and the internal return on investments in economic analysis that governs investment projects that costs excess one million dinars.



Estimate the shadow price of foreign currency:



1. It is necessary to put central controls to amend the official exchange rate * to reflect the shadow price of the foreign currency, and that is considered one of the necessary requirements to implement the net discounted present value standard and the internal return rate on investment in the economic calculation stated in the instructions, paragraph nine.


The central controls for adjusting market prices distinguished a group of outputs and inputs traded internationally, where the projects production or usage of them is reflected on the abundance of foreign currency in the economy and thus project outputs or inputs used of such are considered purely foreign currency outputs or inputs.







* What is meant by exchange rate: the number of units of foreign currency, expressed in dollar per one dinar.

In particular the following outputs and inputs of foreign currency were distinguished: 




· Export-outputs.

· Outputs marketed locally that substitute imports.

· Imported inputs.

· Inputs produced locally that usually go to exports.

· Foreign labor.


According to the pricing rules the value of the output and input (traded) is calculated using export prices (FOB) and import prices (CIF), according to what is listed in the pricing rules.


In other words the pricing rules calculate what the project produces from foreign currency (quantity of exports multiplied by the export price (FOB) in foreign currency or the quantity of substitute imports multiplied by the import price (CIF) in foreign currency, as well as what the project uses from foreign currency and imported inputs multiplied by the import price (CIF) in foreign currency .... etc.).

In a later step, project outputs and inputs must be converted from the foreign currency to its equivalent in local currency (dinars) by using a specific exchange rate for the foreign currency.





2. Justifications for exchange-rate adjustment: there are a number of important and powerful arguments which support the view that the official exchange rate reduces the real value of foreign currency for purposes of calculating the economic national profitability for investment projects and hence for the purposes of investment planning. It is demonstrated in this context to call for assessing the dinar for less than (3.208) dollar (official exchange rate) when assessing project outputs and inputs of traded goods of exports, substitute imports and imports... etc.



The justifications to call for the use of an exchange rate that is lower than the official exchange rate are:



· The use of an exchange rate that is lower than the official rate is the appropriate action at the investment planning level to translate the country’s economic strategy aiming at stimulating central investments in the sectors that encourage the development of non-oil exports, as well as sectors that encourage the expansion of domestic production base in order to reduce imports and compensate it with local commodities. This helps to reduce reliance on foreign exchange earnings from crude oil exports and increases the share of non-oil sectors in the local production.



· The application of the amended exchange rate on project imported inputs will assist in directing investments away from aggregated sectors dependent on imported inputs and the preference of those sectors that rely on locally produced inputs.



· The use of the amended exchange rate helps to correct the balance in favor of the traded goods sectors compared to non-traded goods.



· The real exchange rate has declined rapidly since the early seventies, through rapid rise of the level of prices and local costs which led by the steadiness of the official exchange rate to change in prices and actual local rate costs that gave an advantage for imported goods at the expense of locally produced goods, meaning that it led to deterioration of the competitiveness of alternative replacement goods and export commodities.



· This action shows that the official exchange rate overestimates the value of the dinar, compared to the foreign currency and from the promoting goods substituting imports and export commodities point of view of.



And in support to this view is the state’s utilization and in a broad approach to the customs and quantitative protection policies especially for consumer goods, as well as export subsidies that exports have through an amended export exchange rate.





3. Estimate the amended exchange rate of the Iraqi dinar to be used in technical and economical feasibility studies and for (1.134) dollar per dinar. This price should be approved for 3 years until re-appreciation by the competent authorities.







http://www.mop.gov.i...&pid=295&lng=en
 

Read more: http://dinarvets.com/forums/index.php?/topic/130915-mop-exchange-rate-feasibility-studies-2010/#ixzz2gnanckxY

the Link works