SocalDinar Posted November 12, 2013 Report Share Posted November 12, 2013 http://www.brecorder.com/business-a-finance/managed-funds/144294.html Tuesday, 12 November 2013 23:12Posted by Muhammad Iqbal GENEVA: 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." 4 Link to comment Share on other sites More sharing options...
jerry333 Posted November 12, 2013 Report Share Posted November 12, 2013 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. 3 Link to comment Share on other sites More sharing options...
rockfl9 Posted November 12, 2013 Report Share Posted November 12, 2013 If they do issue bonds priced in dinar I think it is the end of this ride... They would not have any plan to revalue with this obligation, It would be fiscal suicide! Link to comment Share on other sites More sharing options...
SocalDinar Posted November 12, 2013 Author Report Share Posted November 12, 2013 Respectfully Rock That makes no since with such a small amount involved All currencies themselves are an obligation right? 1 Link to comment Share on other sites More sharing options...
sandstorm Posted November 12, 2013 Report Share Posted November 12, 2013 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 3 1 Link to comment Share on other sites More sharing options...
SocalDinar Posted November 12, 2013 Author Report Share Posted November 12, 2013 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 2 Link to comment Share on other sites More sharing options...
sandstorm Posted November 12, 2013 Report Share Posted November 12, 2013 this article is very telling. 1 Link to comment Share on other sites More sharing options...
rockfl9 Posted November 12, 2013 Report Share Posted November 12, 2013 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? Link to comment Share on other sites More sharing options...
sandstorm Posted November 12, 2013 Report Share Posted November 12, 2013 But it says domestic bonds. Would they not buy these with dinars ? Cleared your neg for you Sandstormdomestic 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 Link to comment Share on other sites More sharing options...
Happy Man Posted November 12, 2013 Report Share Posted November 12, 2013 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. 2 Link to comment Share on other sites More sharing options...
sandstorm Posted November 12, 2013 Report Share Posted November 12, 2013 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. Link to comment Share on other sites More sharing options...
rockfl9 Posted November 12, 2013 Report Share Posted November 12, 2013 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. Link to comment Share on other sites More sharing options...
BelievingInTheBest Posted November 12, 2013 Report Share Posted November 12, 2013 (edited) 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 November 12, 2013 by BelievingInTheBest Link to comment Share on other sites More sharing options...
sandstorm Posted November 12, 2013 Report Share Posted November 12, 2013 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? Link to comment Share on other sites More sharing options...
rockfl9 Posted November 12, 2013 Report Share Posted November 12, 2013 The dollar doesn't enter into this deal. It is bonds for dinar to be repaid in dinar!... Link to comment Share on other sites More sharing options...
sandstorm Posted November 12, 2013 Report Share Posted November 12, 2013 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 Link to comment Share on other sites More sharing options...
rockfl9 Posted November 12, 2013 Report Share Posted November 12, 2013 It is not perfectly clear who is issuing the bond, CBI or MOF. But I think it is the MOF .. In which case the bond is a liability on the books of the MOF (i.e. the Iraq treasury) AND the cash received an asset until it is spent. Link to comment Share on other sites More sharing options...
eburt Posted November 12, 2013 Report Share Posted November 12, 2013 WOW!! After reading all the threads I am more confuse than the article - hopefully another article will follow-up with better explanation.... Link to comment Share on other sites More sharing options...
DinarThug Posted November 12, 2013 Report Share Posted November 12, 2013 WOW!! After reading all the threads I am more confuse than the article - hopefully another article will follow-up with better explanation.... Usually It's An Article Refuting A Previous Article ! 1 Link to comment Share on other sites More sharing options...
boosterbglee Posted November 12, 2013 Report Share Posted November 12, 2013 Who's on first? 2 Link to comment Share on other sites More sharing options...
deniscanada Posted November 12, 2013 Report Share Posted November 12, 2013 eburt all that really matters is that this is very very good for us. its the same as cash but you collect interest. Does any one have an idea of what the interest rate might be? 1 Link to comment Share on other sites More sharing options...
DinarThug Posted November 12, 2013 Report Share Posted November 12, 2013 Who's on first? A Warm Up Band - Usually Followed By A Headliner ! 1 Link to comment Share on other sites More sharing options...
sanders2340 Posted November 12, 2013 Report Share Posted November 12, 2013 WOW!! After reading all the threads I am more confuse than the article - hopefully another article will follow-up with better explanation.... That's why I love DV. Everyone is an economist!!! Link to comment Share on other sites More sharing options...
eburt Posted November 12, 2013 Report Share Posted November 12, 2013 eburt all that really matters is that this is very very good for us. its the same as cash but you collect interest. Does any one have an idea of what the interest rate might be? Ok thanks for the explanation Deniscanada - GO RV Link to comment Share on other sites More sharing options...
SnowGlobe7 Posted November 12, 2013 Report Share Posted November 12, 2013 Good thread...keep it coming......this can be looked at a few different ways.....thanks all 1 Link to comment Share on other sites More sharing options...
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