$1.13 to $3.21 Iraqi Ministry of Planning

[keepmwlknfny]

It looks like this study was used in planning the budget for the year 1984, which explains the 3.21 rate, and then the ammended or adjusted rate at 88 cents I believe it works out to be.

 

If you go to that link you provided kevin, you can follow back to the previous pages where that link originated.....

 

Capital Budgeting in Republic of Iraq is evolving into a more structured process with the introduction of a defined policy and procedures that will culminate in a prioritized list of projects for the Capital Budget.

 

In turn, The Guidance For Technical And Economic Feasibility Studies And Post-Project Assessment Of Development Project (Regulations No. 1 for the Year of 1984 and it’s amendment for the year of 1990) has specifies a series of steps to be undertaken, which lead to the completion of a Capital Budget.

 

For more Information on budget preparing, requesting procedures and reporting requirements can be downloaded from the Rule of Law Section / THE GUIDELINES FOR TECHNICAL AND ECONOMIC FEASIBILITY STUDIES AND POST-PROJECT ASSESSMENT OF DEVELOPMENT PROJECTS.

[doctor robbins]

 

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 a 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.

Read more: http://dinarvets.com/forums/index.php?/topic/162600-113-to-321-iraqi-ministry-of-planning/#ixzz2gvQeC0rD

 

Hey Doc:  It does not call for decreasing the rate from $3.20 to $1.13. It simply states in one section that the official exchange rate should reduce the real value of "foreign currency"  by valuing the IQD " for less than $3.208." Translation, this means that going back to 2009 they knew then that they had to de-dollarize the Iraqi economy. You cannot expect the GOI/CBI to get to 10 cents per IQD, let alone $1.00 or more if they are competing against "foreign curency" , ie: the U.S. dollar in their own country. The $1.13 reference is at the end of the article and speaks to the a potential approval  of an amended rate of $1.13 to be used in technical and economical feasibility studies and for (1.134) dollar per dinar.

Read more: http://dinarvets.com/forums/index.php?/topic/162600-113-to-321-iraqi-ministry-of-planning/page-3#ixzz2gvUUmLPB

 

Peace.

 

 

Here's what the report says.

 

 

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.

 

 

Maybe lowering and decreasing the value don't mean the same thing to you, but I think they do to most people.  This report was written when the official value was over $3 and was considered too high in light of economic developments.  It's old and irrelevant. 

[chess]

As we know, the past dictator pegged it from being a SWAG**. We can only hope that the present rate is overkill in the other direction.

Of course imports, exports, HCL, infrastructure growth, new biz moving in will help.

**scientific wild a$$ guess

[docneedles]

couldn't have said it better than chess. + 1 for you chess

[new york kevin]

Hey Doc: Bottomline, whether a 1989, 1999, a 2009 year report, time will tell if the info here still applies or not. The problem is how most people think, so if nothing else this article should help educate non-financial folks into thinking just a little more like financial folks; like the economists in the CBI, GOI, and domestic and foreign companies/investors seeking to make a profit from Iraq. Lowering & decreasing the value of the dinar below $3.00 or for that matter even below 10 cents does not mean what you and I normally recognise it to mean. What we see here is how a government manipulates its own currency to achieve a goal. Like having the U.S. dollar in country to prop up the Iraqi economy. Then printing way more IQD than was necessary to replace that foreign currency, modernize Iraq's entire infrastructure, instill the populations confidence in their national currency (now that they developed more confidence in the USD) . To achieve this goal at the lowest cost possible you do it with a currency that is organically or artificially kept at a rate below what the market can bare. Once you reach a pre-determined point in rebuilding this infrastructure, for our blessing to RV at anything north of 1 penny you must get rid of the competition which was (maybe) and is the very foreign currency ie: the U.S. dollar in country that helped to save your economy in the first place.

 

What is the least expensive way to do this? Get large economic players to accept project deals and trade agreements negotiated in Iraqs current currency at its current rate ( India, South Korea ) even while the IMF is flexing their muscles somewhat against you. All the while promoting yourself to the IMF in a manner and speak they recognise, so that eventually the international community will place confidence in the IQD and GOI and come and invest in Iraq while doing so is still cheaper than toilet paper. You do this by decreasing the amount of IQD and USD on the Iraqi market and not replacing the USD removed from circulation. While replacing less worn out IQD with new IQD than you took off the market in the first place. In whatever denominations the GOI and CBI deemed appropriate. Whats is the effect of this, as I mentioned earlier people will hoard the USD forcing the street price of the USD to rise to prohibitive levels do to supply and demand models. Thus erroding the confidence the Iraqi people currently have in the USD and placing that very confidence in the IQD a domestic currency. Then you RV, RD the IQD at the international level, which would of course translate to the IQD domestically. After that its just a decision of whether the GOI wants to manage the float of their currency or allow the market to determine the value/purchasing power of the IQD.

 

So again, old report or not, this is what has happened to date. It could and should RV now; at 1 penny, 10 pennies, or whatever. These games are what the Chinese are doing, Germans. Cheaper to build everything in China then export/import it into the US, right. I am just trying to help some folks out there realize how the financial wigs think out there so you can manage your post RV fortune well on your own without your feeling like your CPA is ripping you off.  

[keepmwlknfny]

Hey Doc: Bottomline, whether a 1989, 1999, a 2009 year report, time will tell if the info here still applies or not. The problem is how most people think, so if nothing else this article should help educate non-financial folks into thinking just a little more like financial folks; like the economists in the CBI, GOI, and domestic and foreign companies/investors seeking to make a profit from Iraq. Lowering & decreasing the value of the dinar below $3.00 or for that matter even below 10 cents does not mean what you and I normally recognise it to mean. What we see here is how a government manipulates its own currency to achieve a goal. Like having the U.S. dollar in country to prop up the Iraqi economy. Then printing way more IQD than was necessary to replace that foreign currency, modernize Iraq's entire infrastructure, instill the populations confidence in their national currency (now that they developed more confidence in the USD) . To achieve this goal at the lowest cost possible you do it with a currency that is organically or artificially kept at a rate below what the market can bare. Once you reach a pre-determined point in rebuilding this infrastructure, for our blessing to RV at anything north of 1 penny you must get rid of the competition which was (maybe) and is the very foreign currency ie: the U.S. dollar in country that helped to save your economy in the first place.

What is the least expensive way to do this? Get large economic players to accept project deals and trade agreements negotiated in Iraqs current currency at its current rate ( India, South Korea ) even while the IMF is flexing their muscles somewhat against you. All the while promoting yourself to the IMF in a manner and speak they recognise, so that eventually the international community will place confidence in the IQD and GOI and come and invest in Iraq while doing so is still cheaper than toilet paper. You do this by decreasing the amount of IQD and USD on the Iraqi market and not replacing the USD removed from circulation. While replacing less worn out IQD with new IQD than you took off the market in the first place. In whatever denominations the GOI and CBI deemed appropriate. Whats is the effect of this, as I mentioned earlier people will hoard the USD forcing the street price of the USD to rise to prohibitive levels do to supply and demand models. Thus erroding the confidence the Iraqi people currently have in the USD and placing that very confidence in the IQD a domestic currency. Then you RV, RD the IQD at the international level, which would of course translate to the IQD domestically. After that its just a decision of whether the GOI wants to manage the float of their currency or allow the market to determine the value/purchasing power of the IQD.

So again, old report or not, this is what has happened to date. It could and should RV now; at 1 penny, 10 pennies, or whatever. These games are what the Chinese are doing, Germans. Cheaper to build everything in China then export/import it into the US, right. I am just trying to help some folks out there realize how the financial wigs think out there so you can manage your post RV fortune well on your own without your feeling like your CPA is ripping you off.

I fail to seecwhat your saying. All the report shows is exchange rates they used to determine the budget for 1984 and after 1990