MCP is gone?

[rockfl9]

As of the last month of CBI reports it looks like the MCP is over , not sure if it is permanent.  A Multiple Currency Policy happens when the central bank uses different exchange rates for different classes of transactions e.g. remittances, international transfers , cash window, etc.  They used to exchange remittances at 1188 and cash was 1190, now all transactions are at 1190 !  

I know many think the MCP has to do with the dollar trade but that is not true. In most developing countries the USD is a secondary currency.  Iraqi's will still resort to 

dollars for a long time to come even if the dinar goes "international".

Edited March 31, 2018 by rockfl9

[DinarDavo]

 

The swamp is wide and deep......

 

https://www.alsumaria.tv/news/233172/مشعان-الجبوري-لن-يتوقف-مزاد-بيع-العملة-لأن-السياسي/ar

 

[rockfl9]

59 minutes ago, DinarDavo said:

 

The swamp is wide and deep......

 

https://www.alsumaria.tv/news/233172/مشعان-الجبوري-لن-يتوقف-مزاد-بيع-العملة-لأن-السياسي/ar

 

What did he say ?

[DinarDavo]

2 hours ago, rockfl9 said:

What did he say ?

 

from a member of the Integrity Committee...    

 

", said a member of the Parliamentary Integrity Committee MP Mishan al - Jubouri said on Saturday that "no one" can prevent the auction of the currency, while stressing that politicians are "owners" phantom banks. 

"No one can prevent the auction of selling the currency," Jubouri said in an interview with the program "Political Kitchen", which is broadcast by Sumerian satellite channel, pointing out the reason that "politicians are the owners of fictitious banks." 

Al-Jubouri added that "each large party has 3 or 4 banks registered in the name of brother, smelter or uncle or others," pointing out that "the currency auction is an outlet for the benefit of these parti"

[rockfl9]

DO SOME RESEARCH!  Google  "Multiple Currency Practice" and you will see it is only concerned with the CENTRAL BANK  using more than one exchange rate to sell currency. Since  Feb i believe the rate was set at 1190 for ALL sales. Thus there  NO LONGER is a MCP!  The 2% spread rule has to do with the difference between the buy/sell rates . The CBI buys at 1184 and sells at 1190 that is only a 1% spread. Meets the guidance. But an Iraqi  if qualified can only buy $3000 AT ATIME ! if he needs more then must go to the street dealers and that rate is set by supply/demand.

IF the CBI  did not have any limitations the street dealers would be out of business.  But then the MOF would not be able to control the amount of dollars leaving the country.

[rockfl9]

I dont think the CBI  can stop trading dollars for dinar.  They depend heavily on imports which can only be purchased with dollars, Euro etc.  So when the distributor sells product for dinar  it must be able to get more dollars to be able to order replacements.. Even IF the dinar were tradeable ( unlikely in the near term) some suppliers   require payment in local currency as a protective measure . Dollars are used everywhere.

Since the CBI has been selling dollars at one rate 1190 , an MCP  does not exist!