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Iraq plans to issue domestic bonds


SocalDinar
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Tuesday, 12 November 2013 23:12
Posted by Muhammad Iqbal
 
 

downdinnar.jpgGENEVA: Iraq plans to issue domestic currency debt for the first time since the fall of Saddam Hussein, giving the country a new monetary policy tool, its central bank chief told Reuters on the sidelines of a conference in Geneva on Tuesday.

 

"We expect that the first issuance will be in the value of 3 billion Iraqi dinars ($2.58 million)," said Abdul-Basit Turki Saeed, speaking through an interpreter.

 

"This is the first time after Saddam Hussein, and this is the first time that they are being issued for monetary policy and not for financing."

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That is what we want to see coming out of Iraq.  They are stepping up their monetary tools like the big boy countries have.  Now, I believe people will buy them, but we will see.  They have the assets under ground so, it looks good to investors.  They need a tradable currency, or that would help to give investors more confidence in buying the debt.  Like Adam said, it is coming together and shaping up.

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it

That is what we want to see coming out of Iraq.  They are stepping up their monetary tools like the big boy countries have.  Now, I believe people will buy them, but we will see.  They have the assets under ground so, it looks good to investors.  They need a tradable currency, or that would help to give investors more confidence in buying the debt.  Like Adam said, it is coming together and shaping up.

they have a tradable currency, the dollar. and they want o sell more of their crappy currency to get more tradable dollars.

it makes no since to start selling currency bonds, if they planned on rving soon. do you think the cbi would be giving out dinar, if they planned on making it more valuable anytime soon? dont you think they would keep it until afterwards?

it tells me, no big rv around the corner

gurus will have fun with this one. see gurus claim the cbi has been reducing the dinar supply, to get it down to rv.

but here the cbi wants to give out more dinar for more of those fancy dollarg

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it they have a tradable currency, the dollar. and they want o sell more of their crappy currency to get more tradable dollars.

it makes no since to start selling currency bonds, if they planned on rving soon. do you think the cbi would be giving out dinar, if they planned on making it more valuable anytime soon? dont you think they would keep it until afterwards?

it tells me, no big rv around the corner

gurus will have fun with this one. see gurus claim the cbi has been reducing the dinar supply, to get it down to rv.

but here the cbi wants to give out more dinar for more of those fancy dollar

But it says domestic bonds. Would they not buy these with dinars ?  Cleared your neg for you Sandstorm

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Sandstorm:  You may have it backwards.  With a bond the MOF gets dinar for a promise to pay interest and return the dinar at maturity.  I don't think the intent is to pay back with significantly more valuable dinar..

If this deal goes through it pokes a big hole in the rumor that the MOF has been buying up dinar with the auctions.. Why then would they need to borrow dinar IF they already had a pile of it?

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But it says domestic bonds. Would they not buy these with dinars ?  Cleared your neg for you Sandstorm

domestic bond are bonds in dinar,

Sandstorm:  You may have it backwards.  With a bond the MOF gets dinar for a promise to pay interest and return the dinar at maturity.  I don't think the intent is to pay back with significantly more valuable dinar..

If this deal goes through it pokes a big hole in the rumor that the MOF has been buying up dinar with the auctions.. Why then would they need to borrow dinar IF they already had a pile of it?

like you said the mof gets dinar, thats putting out more dinar into the market.

whether the purchaser receives dinar or the mof is granted more dinar, the common thing is more dinar out there.

and i dont see putttin more dinar anywhere as a sign or any indication of rving substanatially anytime soon

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domestic bond are bonds in dinar,

like you said the mof gets dinar, thats putting out more dinar into the market.

whether the purchaser receives dinar or the mof is granted more dinar, the common thing is more dinar out there.

and i dont see putttin more dinar anywhere as a sign or any indication of rving substanatially anytime soon

 

Its not more Dinar.

 

You exchange IQD in your pocket against another kind of note called bond instead of momey.

The face value stays the same.

 

One effect it has is to remove IQD that are not accounted for for new ones that are accounted.

It gives more control to the CBI.

 

on another note its just 3 Billions IQD.

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with iraqs monetary policy and the budget growing and growing, iraq has to put out more and more dinar each day. so they need to bring back more and more each day to keep the rate stable. imo this will help keep therate stable.

its like putting out 1000 dollars a day, but removing 100 to keep the rate stable. then moving to 10,000 a day, but now they have to remove a 1,000 to keep the rate stable. this is a tool along side the auctions to keep that equalibrium to stabilize therate.

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The dinar that the  MOF gets is previously issued , not new dinar. Presumably in some rich Iraqi's bank account idle. The bond will entice the owner to sell it for the interest promised.  . So no dinar was created just gets it back into the market...3Bn dinar is not a lot , but it indicates to me that all the dollars coming in is not enough to fund the projects they want.

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In my opinion, the CBI is selling bonds to bring in more dinar from the market. The CBI has stated they want to reduce the money supply and I believe that is what they are doing. Reducing liquidity of the dinar. The auctions are a tool to control liquidity and inflation. The bonds are simply another tool the CBI has chosen to use to reduce liquidity.  

 

 

This is very good news in my opinion. 

Edited by BelievingInTheBest
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Its not more Dinar.

 

You exchange IQD in your pocket against another kind of note called bond instead of momey.

The face value stays the same.

 

One effect it has is to remove IQD that are not accounted for for new ones that are accounted.

It gives more control to the CBI.

 

on another note its just 3 Billions IQD.

very well could be. it all depends on whose the purchaser.

are they giving bonds to citizens in exchange for dinar? or are they selling domestic bonds in exchange for dollars?

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if a central bank sells domeftic bond, money suppy drops, and bond is an asset on the balance sheet.

if a central bank buys a domestic bond, money supply increases, bond is a liability on the balance sheet.

hopefully more news on this comes out

if they start selling them, then at some point they have to buy them back. sounds like more attempts at equilibrium of the rate

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