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Abdul Basit Turki: the dollar will jump to 2,000 dinars unless the government take bold action to address the financial crisis


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Citing the newspaper (Orient) Abdul Basit Turki: the dollar will jump to 2,000 dinars unless the government take bold action to address the financial crisis

November 19, 2015



Our economy / follow-up

He called Dr. Abdul Basit Turki al-Hadithi, director of the affected areas in the Iraq Trust Fund, to modify the dollar's exchange rate against the local currency to reduce the effects of the financial crisis experienced by Iraq, especially with a large deficit in the budget of 2016. He said Dr Abdul Basit, in an important article singled out by «Orient»: "The financial crisis requires officials to take bold decisions to modify the exchange rate and only day will come when the dollar price per b (2000) dinars, and then will be economic disaster that would be borne as is the case of the poor and then will think these migration and join the Iraqi peers immigrants. " Dr. Turki to get away from the prosthetic solutions to the financial crisis such as reducing salaries and increasing taxes as these solutions will never be a successful solution to bridge the budget this year, which amounted to some $ 20 billion deficit. Hadithi He recalled a proposal submitted to the government earlier to amend the Iraqi dinar exchange rate to be roughly comparable to the price of real cashed though the person taking it at the time of the price that meets the reform requirements probably 1500 dinars per dollar. Now it is later than in accordance with the requirements of the financing of the budget the public and the need to cover an important part of the deficit. The response to this proposal is that it will push to further rise in prices (inflation) and so the low-income people are who will pay for it, so he accompanies our proposal to modify the exchange rate to provide effective ration card, of course, both proposals did not agree the International Monetary Fund with them.
the details :
Suffer the general budget, both a reflection of the number of employees in government jobs and retirees of them or the tasks entrusted to them historically marked expansion in public spending and this was the source of the expansion way the political administration to look at the government as the authority and not the management to provide a service, and this leads to look at public resources as opportunities for further expansion in the authorities is reflected appointments and contracts that can be obtained through this power, and so eroded public government function and deliberate created by the legislation to protect citizens and provide services to him, has allowed the abundance of oil resources so rent-seeking behavior authoritarian much, so when they came under oil prices to this the decline is normal and is expected to continue through 2016 and the erosion of public revenues as a result, the financial crisis surfaced, it was less than that the crisis had appeared in 2009, but that the volume of public spending was less than that which we are witnessing today and the foreign reserves circular in the government accounts was the biggest, and helped to resume oil prices rapidly rising later to cover the deficit and postpone Alazmh.sbak that we proposed in 7/9/2015 across an article published in the newspaper Orient glue mechanisms believe its necessity to address aspects of the financial crisis and the structural imbalance in the Iraqi economy, and we expected that, following objections to These proposals and this is what actually happened. The source of our knowledge this is the expectation that the problem is not seen the real size and their causes, but also to address the phenomenon of the iceberg, as they say. The processors are focused on securing more revenue to make up for the shortfall in oil revenues with the reduction of public expenditures as Almsttaa.osaguet this mechanism as part of the reforms taken to this point, was thrust to maximize revenue is derived through the expansion of customs tariffs and taxes, as well as trying to domestic borrowing from through the issuance of public and foreign treasury bonds through bonds and borrowing from the IMF and the World Bank, and Oman have been discussions with these international organizations in the framework of getting these loans. The reduction of public expenditure has focused on reducing the salaries of staff and who was limited later to reduce certain segments of the salary (nominal) without provisions and stopped to reduce public expenditure to justice between per capita incomes for workers that the provisions dealing with subsequent laws as a priority alternative to its goal Lease in reducing task expenses, while the move to re-negotiate with foreign oil companies operating tours of licenses it is more efficient to reduce public spending and thus the deficit in the public budget than it is the case in the reduction of salaries, for example, with what may bring the negotiation of opportunities to modify the terms of these contracts is to achieve greater interest Iraq on term Baad.toagaf work now tariffs, customs, and is not expected to get only on the acquisition of public bonds domestic loans commensurate with the planned figures for the decline in government banks abilities and not their own, either foreign entities have set tough conditions for the marketing and acceptance of these bonds mortgage Iraq's external indebtedness influential again pushing to postpone borrowing now at least, while the International Monetary Fund previous policy did not include references to the possibility of contributing to the provision of funds sufficient to cover this deficit or a significant proportion of it has promised $ 1.2 billion can be increased while expected to the planned deficit exceeding $ 20 billion, with conditions that put them on economic policy and requires abide by the terms associated with activation of the loan. This is what we expected when we pointed out in the article, published in the Orient glue newspaper dated 07.09.2015 that all these tools are ineffective in dealing with the crisis and will probably Off, too, there are views were defending these mechanisms and calls for taking them has been proven so far failing Under the current circumstance. To agree on what is self-evident for the economic policy that in light of the crisis will be a choice between alternatives on the basis of least social and political cost and the most economic effectiveness of beginning and then the most impact socially and politically later, in the social sciences No rosy solutions without the cost and choose between these solutions is really choose between costs and in light of the failure of the tools (advanced) that is resorting to it from the face of the crisis, it is expected that the continuation of reliable will lead to a political cost and social harsh associated with the economic crisis the most embarrassment. 
Unfortunately, they read the proposals that we listed at the time had gone to discuss the proposed cost as seen under normal circumstances, we would have proposed the following: 
(1) that in such a way to ensure a minimum level of consumption of the Iraqi people and is expanding to include eight essential materials for all classes of people are ration card support, and despite the fact that this proposal will probably increase in size spending, but the decline in global prices witnessed in markets such goods now and secure the production of domestic wheat (paid tabbed national currency usually) with a real effort to reduce corruption opportunities that could mar this card decades, will lead to reducing the need to increase spending on the ration card to some extent, in addition to what Cspbh availability of these materials by the Ministry of Commerce to reduce the speculation on these essential commodities in the local market opportunities in the event of rising prices.If within the 2016 budget law re-work the doubling of the tax allowances relating to State employees it will lead to maintain an acceptable level of real income for low-income people. 
(2) was our proposal in a timely manner is to modify the Iraqi dinar exchange rate to be roughly comparable to the price of real cashed though the person taking it at the time of the price that meets the reform requirements probably 1500 dinars per US dollars, but now it is later than in accordance with the requirements of the financing of the general budget and the need to cover an important part of the deficit Viha.kan response to this proposal is that it will push to further price rises ( inflation) and so the low-income people are who will pay for it, so he accompanies our proposal to modify the exchange rate to provide effective ration card, of course, both proposals did not agree International Monetary Fund Mahma.alkhiar now is between accepting a high rate of inflation, which means clearly a decline in the real income of the citizen, especially among low-income and go to the unknown in the near future, inflation means that the basket citizen Options will retreat from what may Atadh in circumstances where the former will focus spending on most goods need. The alternative to this is a continuation of taking mechanisms ineffective to cope with the crisis, and with the expected continuing decline in world oil prices this entry may be (salaries and allowances) threatened actually erosion either direct Baltkulais or more of the taxes and deductions, which means not only reduce consumption but also create social problems in commitments Finance accustomed employee by (rent, loans, banking, wage study for sons ... etc) either at the macro economic level in the economy is complaining of deflation and recession and thus to further economic recession and the decline and this is what is noted for the rate of exchange transactions in the economy (falling property prices , cars, stocks etc ...) and therefore more unemployment in the labor and employment even in the service sectors as in the field of trade and Anakl.oukdr it comes to the risk of inflation expected in the event of change of the Iraqi dinar exchange rate, he noted another Ministry of Planning and data to reach the inflation rate annual rate in Iraq to 1.6% and this rate indicates all the economic measures simply that the economy is moving towards more deflation and decline, mean more unemployment. In the case of providing an acceptable level of per capita consumption level, particularly for low-income earners low-lying inflation is a treatment to stimulate the economy and the real sectors in which, in particular craft, small and family industries and the agricultural sector first, then the real production wheel begins in the economy outside the rent-seeking scale unilateral. 
The degree of force competition Goods and services determined by the mandated and reflected to prices deliberative Under the current exchange rate of the dinar, the cost of Iraqi production capacity of foreign currency is greater than the cost of goods produced Iraqi nearby, therefore, Iraq has become a market for these countries in all goods, even if the borders were secure protection Kmarkip the price difference was rewarding to withstand the degree of risk in smuggling operations outside the spammers Alsmh.aagaf with opponents of the change in the exchange rate of expect to be affected and bank deposits in dollars or foreign obligations over the decades in the national currency and this is can be treated early by monetary and fiscal authority in sharing Accept damage is expected to propose the price of a mediator for settlement of the obligations that precedes the modified date of the exchange rate in the absence of the possibility to compensate Aelia.alazmh need bold decisions and has not been modified exchange rate now, you may exchange 2,000 dinars to the dollar price will not be feasible, and then you will disagree only on the date of the disaster that I hope solutions can not be It does not help close apologize not being able to take responsibility, and will bear the Fiqra as always the worst effects so as to join them who can join immigrants Bovwag again.


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In arriving to this conclusion, did Turki take into consideration that the IQD is currently held artificially low by the CBI and GOI inorder to keep the cost of rebuilding infrastructure low. It seems he may be viewing the current rate of 1160 as the actual market value.

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Recent articles this week include:


50k notes, 100k notes

new 500 notes, coins lower than 250 dinar

IMF IQD rate at 1500-1, Turki saying 2000-1

raising value against the dollar...


Confusion, smoke,....?


Something is up.

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It's interesting that one article states Iraq is in a "Financial Crisis" and then the next says something totally opposite.


I would have to agree with New York Kevin that he seems to have forgotten the artificial program rate of 1166.


Perhaps if they can keep the MPs from dipping into the reserves and/or absconding with billions, they would not have to make "The Sky is Falling" type of comments. 

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I agree LB just the fact that we are now seeing monetary articles one after another, big denoms, small denoms, delete the zeroes and the next moment Iraq is broke and all of the BS is so thick you could cut it with a butter knife. I am a big RVer till they change the ISO codes of which I don't believe they will. Iraq is operating on American money for the most part, they got no self worth......YET ! Iraq's only hope for the immediate future is to pay the oil companies and pump as much black gold every day that they can. Put it on tankers , send it through pipe lines , just keep it moving and don't look up ! Security is done ! ISIS and their counterparts are done, even if they don't know it yet, their ass is fixing to get blown up !, they are now World Enemy No # 1. !!!! No body is going take their BS anymore! Yes they might have a day or two, but after that those SOB's are going to meet their maker, as little bitty atoms of course. Just be glad that we are a part of this with a front row seat because this ain't ever going to happen again. Come on RV !

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Something is going on with the CBI and the dinar.!

Lots of conflicting articles.

I believe we are heading to an increase of exchange rate.

Just my humble opinion.


Go dinar

Go increase exchange rate

Hey LB, just dropping by to say hi. I lived on the big island for awhile. Just wanted to get your feed back on how you see our 25k notes playing out, those out side the country with them drawing in the 25k inside. I have been out of the loop, so I am tapping your insight. Thanks.
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I don't know which is more hilarious, Obama attacking Ted Cruz, Christians and America or Iraq trying to convince the world they're going to self destruct their own currency.

Nothing here is what it seems

It's good for me to see you and your thoughts here again...

Iraq has too much value as a country in resources to self destruct their currency ... I just wish though I could hear Santa's sleigh bells ringing in an early Christmas.. We live in grateful anticipation ...

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