Article 8 consultation proof Iraq will changes their current pegged regime and become international

[dinarbeleiver]

http://www.imf.org/external/pubs/ft/scr/2013/cr13217.pdf

It's from July this year and has probably been posted before but it's one amazing document to read

[Goeers]

I kinda like #14 on page 17. 

[dinarbeleiver]

I kinda like #14 on page 17.

here you go I agree with you

14. The de facto fixed exchange rate has served Iraq well. The authorities agreed that a stable nominal exchange rate provides a valuable anchor for inflation expectations in an uncertain environment, and intend to continue implementing this policy for the foreseeable future. In the medium term, staff encouraged the authorities to consider creating the conditions which would make possible a move to a more flexible exchange rate policy. Such flexibility could allow a predictable and gradual appreciation of the nominal exchange rate, triggered by strong oil revenues and the Balassa-Samuelson effect, to accommodate a possible real exchange rate appreciation while keeping domestic inflation low.

[gymrat76541]

here you go I agree with you

14. The de facto fixed exchange rate has served Iraq well. The authorities agreed that a stable nominal exchange rate provides a valuable anchor for inflation expectations in an uncertain environment, and intend to continue implementing this policy for the foreseeable future. In the medium term, staff encouraged the authorities to consider creating the conditions which would make possible a move to a more flexible exchange rate policy. Such flexibility could allow a predictable and gradual appreciation of the nominal exchange rate, triggered by strong oil revenues and the Balassa-Samuelson effect, to accommodate a possible real exchange rate appreciation while keeping domestic inflation low.

 

Do that mean what I think it mean????????????????????? Question is: WHEN???????????????????????

[dinarbeleiver]

Do that mean what I think it mean????????????????????? Question is: WHEN???????????????????????

I say soon in Iraqi styley

[doctor robbins]

So you're encouraged that the IMF sees the current policy continuing for the foreseeable future?

[dinarbeleiver]

No dr Robbins - in the medium term they will change that pegged regime to a more flexible exchange rate policy. That's what I am cheering at

I'm also encouraged because its proof that Iraq wants their currency to be traded on the international markets - article 8 consultation

In finance or financial operations of borrowing and investing, what is considered long-term is usually above 3 years, with medium-term usually between 1 and 3 years and short-term usually under 1 year.

I think no more than 3 years to see Iraq change that peg

[gregp]

I'm liking the medium term. Thanks.

[aitshioud]

Couple things I noticed,

financial development, end-2012 CBI net foreign exchange reserves covered 122 percent of reserve money and 104 percent of broad money, or approximately four times foreign exchange deposits. In principle, therefore, the CBI reserves would be enough to cover the complete dollarization of the economy. Additionally, a large part of deposits are owned by government agencies and state-owned enterprises, making them less vulnerable to confidence crises.

Iraq continues to avail itself of the transitional arrangements under Article XIV. Eight exchange restrictions (plus one exchange restriction maintained for national or international security) and one multiple currency practice (MCP) are subject to IMF jurisdiction and approval.

Hmm

[dinarbeleiver]

Couple things I noticed,

financial development, end-2012 CBI net foreign exchange reserves covered 122 percent of reserve money and 104 percent of broad money, or approximately four times foreign exchange deposits. In principle, therefore, the CBI reserves would be enough to cover the complete dollarization of the economy. Additionally, a large part of deposits are owned by government agencies and state-owned enterprises, making them less vulnerable to confidence crises.

Iraq continues to avail itself of the transitional arrangements under Article XIV. Eight exchange restrictions (plus one exchange restriction maintained for national or international security) and one multiple currency practice (MCP) are subject to IMF jurisdiction and approval.

Hmm

they need to make that move to article 8

When they move to article 8 their currency would be at the mercy of market forces. I believe the currency is serverly undervalued and once market forces can influence the currency I think that the exchange rate will be driven up

I think we will witness what is unprecedented compared to other countries

[dinarbeleiver]

Can anyone post Americas conditions for the dollar under article 8 of the IMF

[tenmillion]

VII. Exchange Rate Arrangements:

The exchange rate of the U.S. dollar floats independently and is determined freely in the foreign exchange market. 

 

VIII. Payments Restrictions.

The United States accepted Article VIII of the IMF's Articles of Agreement and maintains an exchange system free of restrictions and multiple currency practices with the exception of limited restrictions on certain payments and transfers imposed for security reasons. The United States currently administers approximately 30 economic sanctions programs, which restrict certain payments and transfers for transactions against particular foreign governments, entities, and individuals. The United States administers, inter alia, sanctions programs relating to Burma, Cuba, Iran, North Korea, and Sudan, and continues to block certain previously frozen assets of the former Yugoslavia. Several other sanctions programs, including those relating to Côte d’Ivoire, Liberia, Somalia, Syria, Western Balkans, and Zimbabwe are “list-based” programs, affecting only members of certain government regimes and other individuals and groups whose activities have been determined to threaten the foreign policy or economy of the United States. The United States also implements similar list-based sanctions programs against: narcotics traffickers; terrorism-related governments, entities, and individuals; and proliferators of weapons of mass 

destruction. 

 

~IMF 2012

[Butifldrm]

The CBI IS STILL IN THE PROCESS of controlling the difference between the market and the CBI rate.  Sooooo, in the past few days that value is starting to close in.   I will say Shabibi did a very good job of holding a tight difference between the two.  All one has to do is go into the CBI site and look under the currency auctions and click on the exchange rates http://www.cbi.iq/documents/CBI_FOREIGN_EXCHANGE_AUCTIONS.pdf and look at the first column on the left and it tells the whole story.  The market exchange rate and the CBI rate must be within 2% of each other.  Now the question is how long must the CBI hold this stability for Iraq to move into article VIII?

 

5. The nominal exchange rate in the official market remained stable against the U.S. 

dollar since 2010, but the rate in the parallel market increased. The CBI pursues a policy of de 

facto peg to the U.S. dollar, providing a key nominal anchor to the economy. However, in 2011, fiscal 

expansion and political instability in Iraq and the region led to increase demand for foreign 

exchange. In late 2011 the CBI started enforcing existing exchange restrictions and introduced new 

restrictions in response to concerns about money laundering and illegal foreign exchange outflows. 

As a result, the spread between the official rate and the parallel market rate—which had been up to 

that point below 2 percent—started to climb, giving rise to a multiple currency practice, and reached 

over 8 percent in April 2013. page 43 and 44 

Iraq continues to avail itself of the transitional arrangements under Article XIV. Eight exchange 

restrictions (plus one exchange restriction maintained for national or international security) and one 

multiple currency practice (MCP) are subject to IMF jurisdiction and approval. The exchange 

restrictions are (i) the limitation that corporates can purchase foreign exchange in the auction for 

import transactions only; (ii) limitation on the availability of foreign exchange cash for individuals 

(i.e., one request per month); 

 (iii) maximum limits on the availability of foreign exchange cash in the 

auction for banks;

 (iv) maximum limits on the availability of foreign exchange cash in the auction for 

 

 This measure gives rise to an exchange restriction because the limitation of one request per month constitutes a 

governmental limitation on the availability of foreign exchange for payments and transfers by individuals for current 

international transactions, e.g., basic allocations for tourist or business travel abroad, family living expenses, etc. 

Furthermore, because of the limitation on the availability of foreign exchange in the non-cash auction to corporates 

and only for trade transactions, individuals who need to make payments and transfers for current international 

transactions beyond the maximum limit have no alternative means or channels to get access to foreign exchange, 

except for resorting to informal sources. 



 This measure gives rise to an exchange restriction because the maximum cap constitutes a governmental limitation 

on the availability of foreign exchange for certain payments and transfers, e.g., repatriation of certain investment 

income by nonresidents, including remittances of profits, dividends or interest. Because of the limitation on the 

availability of foreign exchange in the non-cash auction by corporates to only trade transactions, they would have no 

other means or channels to get access to such foreign exchange beyond the maximum limits, except for resorting to 

informal sources. IRAQ 

 

4 INTERNATIONAL MONETARY FUND 

money transfer companies and money exchange bureaus;

 (v) the requirement to pay all obligations 

and debts to the government before proceeds of investments of investors, and salaries and other 

compensation of non-Iraqi employees may be transferred out of Iraq; (vi) the requirement to submit 

a tax certificate and a letter of non-objection stating that the companies do not owe any taxes to the 

government before non-Iraqi companies may transfer proceeds of current international transactions 

out of the country; (vii) the requirement that before non-Iraqis may transfer proceeds in excess of ID 

15 million out of Iraq, the banks are required to give due consideration of legal obligations of these 

persons with respect to official entities, which must be settled before allowing any transfer; and 

(viii) an Iraqi balance owed to Jordan under an inoperative bilateral payments agreement. In 

addition, one exchange restriction maintained for security reasons should be notified to the IMF 

under the framework of Decision 144-(52/51). The MCP arises from the absence of a mechanism to 

ensure that the official exchange rate and the market exchange rate do not deviate by more than 

2 percent. 

 

http://www.imf.org/external/pubs/ft/scr/2013/cr13217.pdf

Edited December 14, 2013 by Butifldrm

[starlight]

Page 42 of 59, the .pdf says:

 

(As of March, 2013)
Membership Status:
Date of membership: December 27, 1945
Status: Article XIV

 

 

so not Article VIII

[sandfly]

THANKS