Iraqi Dinar Oil Between The Hammer And The Anvil Of Political Conflicts !

[DinarThug]

CNN. Broadcasting " with an eye to raising the value of the dinar to become nearly one dollar ! "

 

 

(by walkingstick)

Iraqi dinar oil between the hammer and the anvil of political conflicts!

04/19/2016

In the fifteenth of October / October 2003, the Iraqi dinar was born again in the true sense of the word. On that day, banks and banking started distributing the new currency and withdrawing dinars Saddam Hussein from circulation, especially that she was in a sorry state.
Not only it is limited to the replacement of thecurrency, but also extended to the adoption of a new monetary policy based on the principle of the independence of the central bank as abasis for any sustainable development, a qualitatively new and rare twist on the level of the Arab region , where monetary policy is usually a government. Despite security and political conditions extremely complex central bank succeeded in subsequent years to achieve great achievements, most notably raising the value of the dinar against the dollar almost doubled and maintain the stability of Sarabv and the accumulation of large reserves of currencies Alognih reached in 2014 about $ 77 billion, up from $ virtually zero . This contributed to restore the confidence ofcitizens in the national currency. However , the Iraqi dinar was soon faced economic and political storms helost a large part of its luster.

Exchange rate between flexibility and consistency of what happened in mid -2014 , it did not enter the country only in a severe financial crisis, but monetary policy also put in front of adifficult test, the collapse of oil prices mean record deficits large in the state budget, this is in addition to theincreasing burden on the balance of trade and balance of payments. Developments portend a depletion offoreign currency, one of the most important pillars of the stability of the national currency reserves. Although Iraq 's success in raising oil production at high rates and reliance government in the hope of price recovery, but the reality is clearly says that the country is facing a structural imbalance will not go away soon. Even assuming the success of the government - Abadi in the application package Asalahat declared in the fight against corruption and the rationalization of expenditure, the bypass this imbalance will not be achieved without taking other radical reforms, including a review of where and exchange rate policy and give them greater flexibility.

It is true that the diversification of sources of national income and the elimination of thephenomenon of the rentier state sponsor overcome this imbalance, but this is a long - term goal is not incompatible with the use of instruments of monetary policy. The CBI has observed in mid - 2014 , increasing pressure on the dinar by the widening gap between the official exchange rate of the time (1.116 dinars to thedollar) and the price of the parallel market (1.397) to reach 18%, which opens the door to speculation in thecurrency. Against the backdrop of these concerns the central bank announced at the end of last year ,reducing the value of the dinar against the dollar by about 6% in the first step of its kind since the spring of2003. Instead of 1.116 dinars Bank has recently started selling the dollar to 1.182 Danara.ovi the same time raising the price of buying the dollar to 1.180 Dinara.

The bank hopes behind the reduction of the official exchange rate of the currency (or lift the dollar exchange rate) to reduce the demand for foreign currency on imported goods and the reduction of the decline of the dinar in the parallel market. Indeed , the gap between the two rates has recently dropped to 7%, the ratio seems acceptable. Another effect is just as important to reduce the dinar exchange rate and is to get the Ministry of Finance on higher revenues. For every dollar of oil exports sold to the Central Bank will get the most dinars. The important question now is: Will this reduction issufficient to overcome the suffocating crisis? It is clear that this measure is not enough, given that thestructural imbalance requiring the Central Bank to adopt greater flexibility commensurate with the new circumstances surrounding the ethnic economy and to take further steps to reduce the value of national currency.

And here it must be taken into consideration that the demand for the dollar witnessed a significant increase, not only for the financing of imported goods and Tveniv investment projects, but also due to other factors that are considered fairly new, including personal remittances abroad. Tens of thousands of Iraqis abroad Kaltalbh, retirees and others livelihoods depend on the funds that prevent them from Iraq. Iraqis also discovered again fun to travel abroad which means extra demand for foreign currency. All of these factors lead inevitably to the withdrawal of foreign reserves and declining balance, and this is what is already happening. Nor can the central bank in such circumstances the adoption of the principle of "Spend what comes to you in the pocket of the unseen!". Betting on the return of oil prices to normal is risky.

And it may not be , of course, as some have sometimes suggested, thinking back to the state monopoly of foreign currency because it is the policy of outdated and represents one of the core aspects of the totalitarian state.Hence can not be the central bank sufficiency administrative procedures to better monitor the currency auction and the fight against money laundering and others, but that the actual developments of the Iraqi economy imposed by taking other steps thought to reduce the dinar exchange rate in order to reduce the demand for hard currency.

In addition to the positive effects of such a decision on the balance of payments and the state budget, it can also contribute to improving the competitiveness of local goods versus imported, while acknowledging that this effect will remain limited due to the weakness of the flexibility of domestic production towards the exchange rate policy. However , the central bank does not still swearing by embarking on afurther reduction in the exchange rate because of the political and social fallout expected such a decision.

Any reduction in the exchange rate of the local currency would lead automatically to raise the price ofimported goods, which covers the bulk of the domestic demand , which could trigger social protests. Of course, there is a populist political forces lie in wait, surely they will exploit any popular resentment potential as a card in its power struggle without any regard for the fate of the Iraqi economy. Here it must be said that the lack of aunified political will is considered one of the key obstacles to the implementation of the necessary economic reforms. A fact known to the central bank also during the controversy sparked by his project to delete several zeros from the Iraqi dinar. Struggle for "zeros" when calculating the value of the dinar against the dollar iscurrently number appears difficult to understand because it includes a number of zeroes after the comma.This decline is due to the extraordinary collapse in the value of national currency in the era of the tyrant Saddam Hussein.

It is seen on the Iraqi state budget needs to be high abilities in mathematics and arithmetic in order to understand the millions and billions and trillions astronomical numbers it contains. Even the authors of the budget in the wrong unit of measurement is sometimes confuse billion and a trillion. This situation isnot uncommon , and also affect the cash trading efficiency and increases costs, as is often forced ordinary citizens to carry their money in large bags, let alone traders. In such circumstances , it is natural (that embarked upon by many countries suffered from hyperinflation) be replaced with new ones currency more valuable.

This is what the leadership of the central bank thought the era of former president Shabibi, when preparing for the high professionalism of the project to delete thethree zeroes, with an eye to raising thevalue of the dinar to become nearly one dollar. A move that would facilitate cash trading and financial accounts process and strengthen confidence in the national currency. It is also not a purely technical step loser nor winner and the only beneficiary is the Iraqi economy. But the project quickly inset in the corridors ofpolitical and sectarian conflicts and raised about controversial phenomenon careful interest of the country and inwardly settle personal scores, especially since this period saw the aggravation of the dispute between thecentral bank and the executive as part of an effort for me arms crowned fabricated the charge of corruption of the leadership of the former Central Bank and the overthrow by way damaged the reputation of Iraq.Following the appointment of a new leadership of the bank put the current governor and the agency on theKeywords project again pledged to implement it at the beginning of 2017, but there on the ground for what promises this, leadership of the central bank is well know that they are going in a minefield. After trimming toenails former leadership seems that the bank became finds it difficult to maintain the independence and turned to self - defense and the site is obliged to justify any move offers them.

This also reflects the currency during Alnkadihaljdidh put 50 thousand dinars a class late last year. This step is very normal also raised a"political" debate and "economically" dominated by vexatiousness, exaggeration and hype and shuffle thecards. In the midst of this controversy it seems thatsome people have forgotten that the new paper does not exceed the value ofonly $ 40, so the contribution to solving the problems of monetary circulation in Iraq remains limited. Hence it is necessary to go seriously to revive the project to delete the zeros as a necessary step for the rehabilitation of the Iraqi dinar and the issuance of more valuable banknotes in order to facilitate payment for purchases and sales. But this goal will not be fully achieved without the development of thebanking system and reduce the cash payment operations for the benefit of bank transfers and other forms ofpayment credit. But that requires a first - class citizen persuasion advantages of the banking system, an issue that seems difficult because of the security, political and economic challenges facing the country.

http://www.almadapaper.net/ar/.....%81%D8%B7-

[Texstorm]

Thanks Thugs ! Here we go again ! One to one is the only way that they can effectively bring the astronomical numbers into check and have a currency that can be evenly traded across the board. Quite frankly I would be glad to take any rise of value in the dinar but if you got to break out a calculator and do fractions that's not a very attractive venue for most of us. Damn the torpedos !.....Full speed Ahead ! 

[moneysoon]

This should bring a breath of fresh air for the Spring thaw.

[Synopsis]

The article states at the end, "But this goal will not be fully achieved without the development of the banking system and reduce the cash payment operations for the benefit of bank transfers and other forms of payment credit. But that requires a first - class citizen persuasion advantages of the banking system, an issue that seems difficult because of the security, political and economic challenges facing the country."

I suspect the banking system functioning today in Iraq for the Iraqi citizen is far more advanced and utilized than this article indicates in spite of the security, political, and economic challenges facing the country.

The article also states, "Following the appointment of a new leadership of the bank put the current governor and the agency on the Keywords project again pledged to implement it at the beginning of 2017, but there on the ground for what promises this, leadership of the central bank is well know that they are going in a minefield."

I suspect Ali al-Alaaq will be replaced soon (with likely Dr. Shabibi?) and the minefield is now being (or has been) swept of mines.  I also suspect with Ali al-Alaaq out of the CBI and someone like Dr. Shabibi acting as the CBI Governor, the project to delete the zeros with the eye toward raising the value of the dinar to become nearly one dollar will happen long before the beginning of 2017.

[Gypsygirl11]

This is music to my ears....now just DO IT!!!! Thx Thug for bringing over. Im ready to buy a few bikinis and head to the islands - lets do this thing.

My only question is why would they announce their plans before hand?

[chinadawg]

1 hour ago, Gypsygirl11 said:

This is music to my ears....now just DO IT!!!! Thx Thug for bringing over. Im ready to buy a few bikinis and head to the islands - lets do this thing.

My only question is why would they announce their plans before hand?

Could be , they want us to think we are looking at 2017, when it possibly could be much sooner...........but forget the dinar, let's talk about more important things, if you don't mind when you get the new bikinis, take a few selfies and let us approve them for ya.

[6ly410]

[DinarThug]

2 hours ago, Gypsygirl11 said:

Im ready to buy a few bikinis 

My only question is why would they announce their plans before hand?

 

To Prepare The Peeps For A Change !

 

Oh And Watch Out For Davis With His Mankini !

       

 

 

[DinarThug]

Here's Kap's Comments On This Article ...

 

 

4-19-2016   Newshound Guru Kaperoni   Article: "Iraqi dinar oil between the hammer and the anvil of political conflicts!"   Quote:  "Following the appointment of a new leadership of the bank put the current governor and the agency on the Keywords project again pledged to implement it at the beginning of 2017..." 

I do... like the reference to 2017 in the article.  There were several articles last year that talked about the issuance of 3 new lower denominations (50, 100, 200) early 2017 (which then we deducted the float would have to start prior to raising the dinar enough to warrant the new notes).  

This time around with the IMF talking about the "Iraq will return to the market mid-2016" which we know would drive the value of the dinar up, and the articles about issuing 3 lower denominations early 2017, and todays notice that they want liberate Mosul by end of year, it seems everything is lining up to begin the float very soon (sometime from now to the end of the year) with a rate of .05 or so early 2017 which would demand the release of the first 3 smaller bills (50, 100, 200). 

Interesting puzzle.   We can hope anyway.  

 

 

[chinadawg]

leave it to Kap to be hoping for a nickle in 2017.

[blueskyline]

"Following the appointment of a new leadership of the bank ......................................................put the current governor .....and the agency .........on the Keywords project again pledged to implement it at the beginning of 2017..." ...................... I could be wrong . Maybe I'm reading to much into this but . Has there been a unannounced Leadership Change In The Central Bank Of Iraq ???

Edited April 20, 2016 by blueskyline

[gregp]

Finally, a light at the end of the tunnel. Thanks Thug.

[Synopsis]

2 hours ago, blueskyline said:

"Following the appointment of a new leadership of the bank ......................................................put the current governor .....and the agency .........on the Keywords project again pledged to implement it at the beginning of 2017..." ...................... I could be wrong . Maybe I'm reading to much into this but . Has there been a unannounced Leadership Change In The Central Bank Of Iraq ???

I am not aware of an unannounced Leadership Change In The Central Bank Of Iraq. 

From what I understand, Ali al-Alaaq is the current proxy CBI Governor installed by Nouri al-Maliki.  This proxy appointment was made because the acting CBI Governor - Dr. Shabibi - wasn't going along with the corruption al-Maliki was implementing in the CBI.  Apparently, this proxy CBI Governor appointment needs to be removed so that the acting CBI Governor - Dr. Shabibi - can complete the necessary CBI reforms (issue lower IQD denominations, etc.) and ultimately establish the IQD international rate.

[blueskyline]

25 minutes ago, Synopsis said:

I am not aware of an unannounced Leadership Change In The Central Bank Of Iraq. 

From what I understand, Ali al-Alaaq is the current proxy CBI Governor installed by Nouri al-Maliki.  This proxy appointment was made because the acting CBI Governor - Dr. Shabibi - wasn't going along with the corruption al-Maliki was implementing in the CBI.  Apparently, this proxy CBI Governor appointment needs to be removed so that the acting CBI Governor - Dr. Shabibi - can complete the necessary CBI reforms (issue lower IQD denominations, etc.) and ultimately establish the IQD international rate.

Thank You . I miss read this. It's early . Where is my ciffeecoffee

[Synopsis]

13 minutes ago, blueskyline said:

Thank You . I miss read this. It's early . Where is my ciffeecoffee

Yeah, I'd like to find out where Yota seems to get all his phenomenal coffee.  He seems to always be pumped and really chipper.  I could use that.

[yota691]

53 minutes ago, Synopsis said:

Yeah, I'd like to find out where Yota seems to get all his phenomenal coffee.  He seems to always be pumped and really chipper.  I could use that.

I actually drink MW..Instant coffee....

[SnowGlobe7]

[calkid11]

Thank you Thugs 

[Freedomwish]

10 hours ago, gregp said:

Finally, a light at the end of the tunnel. Thanks Thug.

I'm still gonna' rely on my LED flashlight in one hand, while continuing taking whiskey shots on the other hand walking through this tunnel LMAO 

Just let me know if we'll stumble on that darn HCL anytime soon folks, while my liver is still pumping hahaha.......

[DinarThug]

9 hours ago, yota691 said:

I actually drink MW..Instant coffee....