Iraq sees foreign reserves dropping to $43 bln in 2016 - IMF memo BAGHDad Jan 12 Iraq plans to finance its balance of payments deficit by drawing its

[SocalDinar]

This is Bad!! Very Bad!! Not sure why some people in the news section think this memo is a good thing and " Encouraging news "?? This is bad, Very Bad

 

  Iraq sees foreign reserves dropping to $43 bln in 2016 - IMF memo

BAGHDad

 

Jan 12 Iraq plans to finance its balance of payments deficit by drawing its foreign exchange reserves down to $43 billion in 2016 from $59 billion at the end of October, it said in an International Monetary Fund memo on Tuesday.

The deficit is expected to reach $14 billion in 2015 before narrowing to $11 billion in 2016, the government said as part of a Staff Monitoring Programme that the IMF has approved as a precondition for a loan.

Iraq estimated gross domestic product (GDP) would grow by 1.5 percent in 2015 and 10.6 percent in 2016 on increased oil production, while falling oil prices would create a budget deficit of 15 percent of GDP in 2015 and 10 percent in 2016.

 

http://www.reuters.com/article/iraq-imf-idUSL8N14W4Z920160112?rpc=401

 

Iraq signs IMF monitoring program, to draw on FX reserves

BAGHDAD

 

 

Iraq plans to finance its balance of payments deficit by drawing its foreign exchange reserves down to $43 billion in 2016 from $59 billion at the end of October, it said in an International Monetary Fund (IMF) memo.

The deficit is expected to reach $14 billion in 2015 before narrowing to $11 billion in 2016, the government said as part of a Staff Monitoring Program agreement that the IMF approved on Tuesday as a precondition for a loan.

The agreement, running from November 2015 to December 2016, is aimed at offering Iraq help in steadying its finances as the major oil exporter grapples with lower oil prices and costs associated with the fight against Islamic State militants.

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It paves the way for a possible funding program this year which would, however, come with potentially unpopular conditions such as steps by Baghdad to reduce energy price subsidies and reform state-owned enterprises.

Prime Minister Haider al-Abadi is already struggling to sustain support for political reforms he announced in August aimed at reducing corruption and waste.

Iraqi authorities agreed in November to have the IMF monitor their economic policies to help rein in spending and curb the budget deficit.

They estimate falling oil prices will swell the budget deficit to 15 percent of gross domestic product (GDP) in 2015 from 6 percent a year earlier, before easing to 10 percent in 2016, according to the memo.

The government said it expected GDP to grow by 1.5 percent in 2015 on 10 percent higher oil production and 10.6 percent in 2016 on a 20 percent jump in production.

Financial pressures on Iraq have become so heavy that Baghdad halted a plan to issue $2 billion of international bonds last year because investors were demanding too high a yield.

Its finance minister told Reuters last month it planned to revive the bond issue in 2016, betting that gains by the armed forces against militants and support from international financial institutions would reassure investors.

Falling foreign reserves are expected to gradually recover to $88 billion by 2020 as oil revenues increase, the memo said, adding the Iraqi dinar's peg with the dollar would be maintained.

 

http://www.reuters.com/article/us-iraq-imf-idUSKCN0UQ2J020160112

[Texstorm]

Thanks for your input SD ! This whole damn roller coaster is not what we can perceive. Yes we get good and bad and then we get some that don't matter at all. I don't know , but I will not throw in the towel until all of the cards are on the table. The fact that you haven't walked away and I haven't walked away is proof that know one knows. God Bless all of us !

[SocalDinar]

The financial knowledge I have gained has made this a worthwhile venture for me already Tex. I was in this to make money and that i have. Not with the dinar so much but with other gains made with this knowledge. I hope we all make some money off the dinar but i have doubts that we will anytime in the near future. Maybe some day but things are not looking very good right now.  Letting the GOI dip into the Central's reserves can only hurt the value IMO. I don't think this is smoke as many like to believe.  I have invested Thousands  of hours of my time here and researching Iraqi News. It's kind of hard to walk away from that.   Good Luck to everyone.

 

IMF to work with Iraq on PFM reform

 

13 Jan 16

The International Monetary Fund will support Iraq in the implementation of its programme of fiscal consolidation and public financial management.

Baghdad, Iraq

 

IMF managing director Christine Lagarde approved the support, which does not entail financial assistance, yesterday. Instead of financial support, the fund will monitor the execution and performance of the Iraqi government’s economic policies and provide technical assistance and capacity building to its reform programme.

The fund said the war-torn country had requested assistance to “help address the urgent balance of payments and budget needs triggered by the Islamic State attacks and collapse in oil prices”. This could potentially pave the way to a funding arrangement.

Under the IMF’s guidance, Iraq is implementing a programme of fiscal consolidation to contain public expenditure in line with available revenue and financing, with the aim of reducing the non-oil primary deficit by $20bn.

Non-oil investment and spending on goods and services is to bear the brunt of cuts to expenditure. Public sector wages and pensions will not be affected, and are instead projected to increase despite an already bloated government payroll being a major weakness of the country’s finances. 

Citing World Bank findings, the fund said poor public financial management in Iraq means the efficiency of public investments in the non-oil sector is low.

It added that a weak PFM framework has lead to a lack of fiscal discipline and the overly political allocation of oil resources, and improvements following technical assistance from the fund and the World Bank have been “very slow”.

The IMF said under its support arrangement, agreement has been reached on measures to strengthen PFM as well as efforts to bring stability to the finance sector and counter money laundering and the financing of terrorism.

These will include some changes mostly within the country’s Ministry of Finance in the short term, in order to build on more ambitious reforms later on. These include moving to a single treasury account and reforms to public investment management.

After existing in a state of turmoil since at least the US-led invasion in 2003, the IMF said Iraq’s economy, infrastructure and trade are suffering due to continued conflict as Islamic State insurgents commit terrorist attacks and offensives to capture more territory.

IS now controls parts of Iraq, where they have declared an Islamic caliphate. A US-led coalition is also conducting airstrikes throughout the country to defeat the group.

In addition the impact of the sharp decline in oil prices – already significant in 2014 – intensified last year. Iraq is also enduring an internal refugee crisis and massive energy shortages.

 

http://www.publicfinanceinternational.org/news/2016/01/imf-work-iraq-pfm-reform

[Antietam]

As I have stated my opinion before, this is a long term investment. No different than holding on to your stock portfolio even when the market tanks. We don't sell because we are confident that the strength of the American economy will bring the market back. In Iraq it is because they hold 1/4th of the world's oil reserves. We hold because we have faith that sooner or later, iraq's fossil fuel deposits will make iraq rich and therefore revalue of their currency. But this takes time. IN about four years I will sell my dinar to caz and shabs if iraq is still where it is today. I bet they won't buy them.

[SnowGlobe7]

I bet caz would buy them just to prove you wrong...lol

 

LOVE YA CAZZZZZZ!!!!

[caz1104]

You know it SG7!!!!

Love Ya Back

[SocalDinar]

As I have stated my opinion before, this is a long term investment. No different than holding on to your stock portfolio even when the market tanks. We don't sell because we are confident that the strength of the American economy will bring the market back. In Iraq it is because they hold 1/4th of the world's oil reserves. We hold because we have faith that sooner or later, iraq's fossil fuel deposits will make iraq rich and therefore revalue of their currency. But this takes time. IN about four years I will sell my dinar to caz and shabs if iraq is still where it is today. I bet they won't buy them.

 They do have quite a bit of oil but a lot of those proven reserves are in the North.  Hopefully they can hold the country together long enough for us to make something off this colorful paper. I don't think it will be good for us if the Kurds split which is a real possibility. I do also think that big oil could one day be in trouble. Technology changes things. Elon Musk's new battery technology is a perfect example. Oil may never become obsolete but the demand could dry up as new power sources become available.

 

Iraq needs to diversify and produce something other than oil..

[rockfl9]

SD " Iraq needs to produce something other than OIL"  But what???? Easy to say!

The biggest restriction to any alternative is reliable electric power...  then need training. All would take years.  Best initial solution is reduce dependence in imports of food and energy. Bring trade balance deficit down.

[rockfl9]

This IMF action is serious.   Iraq has spent it's way into the poor house. Admitting they are resorting to use the reserves to keep going is a last resort.  I suspected they were doing it months ago.. If they lost 20% in reserves AND M2 had the usual increase the real exchange rate should have gone up ...  1400 1450 or so. 

[caz1104]

"Iraq needs to diversify"

I read where Iraq is heavily vested in PMC

[Antietam]

Snowglobe, if you read caz's response you will quickly see that he/she is not volunteering to buy my dinar. I was quite confident that he/she would avoid my proposition. Caz is quick to put down those who aren't "gold gilded RV tomorrow" proponents. But he/she is absent when it comes to buying more dinar, even at my cut rate prices. In other words, all blow and no go. Have a good day caz. I say these things in jest, so please don't hate on me. I have such tender feelings these days.

[caz1104]

What a turd! I said I would...............seeing as it is a buyers market lets see how serious you are.

[Antietam]

Name calling! I told you I had tender feelings. Now how could I ever sell my precious dinars to a person who has such a short fuse. I bet Shabs would be more respectful. He wouldn't buy my dinars either, but he would be more respectful. Go RV! No BV!

[Texstorm]

Ok since your dinars are for sale and you want out and you will promise never to come back here again, what is your killer deal ! Enough is enough !

[Antietam]

For you, Tex, because you are so sympathetic with my position about this being a long term investment, I will not charge you one penny more than the going rate back in 2011 when I bought in. So for a mere $1100.01 per mil of beautiful uncirculated dinar bought at a dealer site that is now closed down by the FBI for fraud, I will sell you all

5 million I own. You're a big time gambler, what's a cool $5,500.05 among friends? Want in?

[Texstorm]

I've got a boat load more than that ! And a Shiite load more of oil stocks ! WTF are you kidding me ? I will purchase all that you have today as long as you become a silent partner for half of what you have in it and you can have half of the gains after the RV ! Are you in ?

[Antietam]

You're a man after my own heart. But, I'm not quite ready to call it a day on this speculation. Like I said, i'm in it for a couple more years. Hey, at least I don't feel so bad. For awhile there I thought I was the biggest sucker around for having bought 5 mil. You have alot more. That makes you the biggest sucker! Now I feel better. Thanks!

[Texstorm]

My oil stocks alone account for 1% per cent of what you are crying about ! We will see who is the biggest sucker is in the end .....Rainbow ! The difference is I have the Jevos to stick it out and Im not even crying ! LOL ......my offer stands till daylight cupcakes ! Get out right now with your forskin ! Cause thats all you got ! And if you dont Caz will have your donkey in the morning ! And by afternoon you will receive a good old fashion "East Texas Stump Breaking !" Just like Deliverance ! Cause now you have ticked me off again !

[SocalDinar]

Thx Rock

Their infrastructure ( electrical grid ) was in poor shape before Daesh starting taking over cities. It's worse now and their generation capabilities are not increasing but actually are decreasing. This is another reason why they are years and years away from ever using electronic payments substantially . I think they had high hopes for this but along with the people's mistrust of banks it never was realized. Probably one of the reasons the Central introduced to 50 and 100 thousand dinar notes.

They could increase their agricultural output if water does not become worse of a problem Than it is already now

I know a very wealthy man who came here from Iraq in the 70 s . I heard the biggest belly laugh ever when I asked him about the dinar. He also said that most Iraqis are Very lazy and have no work ethic. Then he added kind of like the kids in the USA today.

[SocalDinar]

I was able talk quite a few people into buying a lot more than $5 K worth Antietam . All I had to do was plant the seed and the next thing I knew some were saying they had over $20 K worth? I personally was at $10K. And just like me their greed overtook their common sense. Thankfully I was able to get most of them to reduce these amounts . Some held on but most realized that Iraq could not magically turn $80 billion into $240 trillion dollars. So most kept a few for nostalgia and took the 15% loss on the rest.

Edited January 14, 2016 by SocalDinar

[yota691]

I was able talk quite a few people into buying a lot more than $5 K worth Antietam . All I had to do was plant the seed and the next thing I knew some were saying they had over $20 K worth? I personally was at $10K. And just like me their greed overtook their common sense. Thankfully I was able to get most of them to reduce these amounts . Some held on but most realized that Iraq could not magically turn $80 billion into $240 trillion dollars. So most kept a few for nostalgia and took the 15% loss on the rest.

They were all big boys, you may have mention it, and you didn't break someone arm for them to buy..(which I don't mention it no one). You shouldn't take it so personally as it shows glowing here at DV, which you spread with that conscious you have which bleeds negative....this isn't a hate comment but you really shouldn't take it so personally.... 

[caz1104]

You're a man after my own heart. But, I'm not quite ready to call it a day on this speculation. Like I said, i'm in it for a couple more years. Hey, at least I don't feel so bad. For awhile there I thought I was the biggest sucker around for having bought 5 mil. You have alot more. That makes you the biggest sucker! Now I feel better. Thanks!

You prove our point with every post...........nothing but a BLOWHARD.

[SocalDinar]

I take no offense at any of yours comments Yota.   But I do take it personally getting these people involved.. These people were not big boys. Most were people on moderate incomes.  They would never had spent this money if it were not for me pumping dinar without knowing the real facts and numbers. They believed me as i was quite convincing that this thing was going to pop any day now. They spent money they really did not have on the basis that i knew what i was talking about. This was not a tip on a horse which would have been obviously a big gamble. No I presented this just as the Gurus did. It was going to happen and they needed to buy now if they wanted in.  That was over 6 years ago.

 

I really do try to only talk about the negative side down here as I am not trying to burst anyone's bubble. This section is for the other side of this venture and few people come down here. And  those that do want to here about others opinions that are different than the pro RV crowd. At least thats why I first came and finally looked in this section 18 months ago.

 

I do appreciate your comments and all of your posts.

Edited January 14, 2016 by SocalDinar

[caz1104]

SD,

That's noble.

IMO folks that invest more than they can afford is not your fault. I don't know about you.........but I get tips daily from numerous sources for differing projects & investments, it's up to me to do my due diligence. And if I do decide to invest, it's up to me to decide when & how much..........no one else. IMO if folks bet the farm on a tip, I conclude that if not for that tip another would arise with simular results. But if you feel guilt......that's sad IMO, tho I understand. Don't agree but I understand.

[Antietam]

SD, I have several friends who have a similar guilt experience, because they too encouraged many to invest. The "get rich quick" synapsis is wired in every person's brain. Just look at the lunacy of the power ball craze right now. It's funny that the same odds apply to winning regardless of how many people buy tickets or the size of the pot. If the payoff was $1 or 1 billion dollars, when you pick six or seven numbers at random it's still 300 million to one you will hit it. Yet people are rushing down to their local convenience stores with their social security checks or welfare payments to slap down hundreds of dollars for a chance to hit it big. Sounds eerily like what we all did with the dinar from 2007-2012. Even today there are enough dinar "newbies" to make it profitable. My guess is our odds of hitting a millionaire making RV are just about the same as the power ball. About 300 million to one!