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An increase in the price of the dollar in the Iraqi market


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The exchange rates of the dollar rose on the Kifah Stock Exchange and local markets, on Tuesday, (31 March 2020).

The prices of the Kifah Stock Exchange - Baghdad recorded 124,500 dinars per 100 dollars.
 
Buying and selling prices in banking shops
 
The sale price of the dollar = 125,000 dinars.
 
The purchase price of the dollar = 124,000 dinars.
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Thanks Yota ....:salute: These figures would indicate that the IQD is out of the 2% compliance, but that is only based upon this exchange. ?However, the CBI determines what measure to use as to the official Market Rate. We shall see...! They haven't changed it since the 16th...at...1203.455 IQD to 1 USD...!

Edited by ronscarpa
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2 hours ago, ronscarpa said:

Thanks Yota ....:salute: These figures would indicate that the IQD is out of the 2% compliance, but that is only based upon this exchange. ?However, the CBI determines what measure to use as to the official Market Rate. We shall see...! They haven't changed it since the 16th...at...1203.455 IQD to 1 USD...!

In June 2019, the IMF stated they were reviewing their policies and one of them included the 2% compliance rule. So the compliance rule may or may not be in effect for Iraq at this time due to the IMF's review of the policy. The staff recommended something different to the Directors of the IMF. It's been awhile since I read the report and will need to go back to it. I wouldn't hold too much into the 2% compliance issue at this time if I read the IMF paper right as the IMF Director's seemed to go with the new 2% policy which is calculated differently. I can't remember the document title at the moment (I commented on it on another thread) and will look at it later.

Edited by Theseus
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26 minutes ago, Theseus said:

 In June 2019, the IMF stated they were reviewing their policies and one of them included the 2% compliance rule. So the compliance rule may or may not be in effect for Iraq at this time due to the IMF's review of the policy. The staff recommended something different to the Directors of the IMF. It's been awhile since I read the report and will need to go back to it. I wouldn't hold too much into the 2% compliance issue at this time if I read the IMF paper right as the IMF Director's seemed to go with the new 2% policy which is calculated differently. I can't remember the document title at the moment (I commented on it on another thread) and will look at it later.

 

Thanks Theseus - I liked your post. I hadn't read the article you referred to, but I personally felt it wouldn't actually be an issue when the time came to increase the value of the IQD..! Blessings....RON

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9 hours ago, ronscarpa said:

 

Thanks Theseus - I liked your post. I hadn't read the article you referred to, but I personally felt it wouldn't actually be an issue when the time came to increase the value of the IQD..! Blessings....RON

I wrote on March 24 regarding the 2 percent rule. The paper (title colored in purple) does have the algorithm they recommended at the end of the document. As I have not seen this to be changed at this time, not sure if the current 2 percent rule is in place or the one they recommended below.

Posted March 24 (edited)

 IMF Policy Paper: Review of the Fund's Policy on Multiple Currency Practices: Initial Consideration Is a good read not just about the Articles I mention above but does go into depth on the reasoning why MCPs are frowned upon, how they hinder the country they are implemented in and revision to the 2% market rate that so many tout Iraq should be in in order to RV. What is noteworthy, the IMF states clearly within the paper that Iraq cannot have a MCP before acceptance to Article IIIV.  It goes into the history of MCPs since 1971 to 2017 and why the practice is frowned upon in general. BOP in case you are wondering is an acronym for Balance of Payment. The IMF states they see a negative correlation between a country adopting a MCP and making a BOP.

 

As to the regards of the fixed 2-percent rule the IMF staff recommended to the IMF Board of Directors the following 

  Quote

With regard to the permissible spreads for spot transactions, Directors welcomed staff’s proposal to replace the current fixed two-percent rule with a country-specific market-based norm that would apply uniformly across the membership. They noted that the range between the most depreciated and most appreciated exchange rates in the wholesale market on a given day would be an appropriate benchmark that is sensitive to the level of market development and market conditions in each member country. Most Directors also agreed that a two-percent tolerance margin around the mid-point of this range would help avoid capturing insignificant deviations from the market norm, although a few Directors would have preferred a higher margin. Directors also supported the proposal to treat non-spot transactions in an analogous manner, using the methodologies proposed by staff. In terms of implementation, most Directors supported retaining the notion that a single breach should constitute an MCP, while a number of Directors called for some flexibility based on materiality considerations.

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1 hour ago, Theseus said:

I wrote on March 24 regarding the 2 percent rule. The paper (title colored in purple) does have the algorithm they recommended at the end of the document. As I have not seen this to be changed at this time, not sure if the current 2 percent rule is in place or the one they recommended below.

Posted March 24 (edited)

 IMF Policy Paper: Review of the Fund's Policy on Multiple Currency Practices: Initial Consideration Is a good read not just about the Articles I mention above but does go into depth on the reasoning why MCPs are frowned upon, how they hinder the country they are implemented in and revision to the 2% market rate that so many tout Iraq should be in in order to RV. What is noteworthy, the IMF states clearly within the paper that Iraq cannot have a MCP before acceptance to Article IIIV.  It goes into the history of MCPs since 1971 to 2017 and why the practice is frowned upon in general. BOP in case you are wondering is an acronym for Balance of Payment. The IMF states they see a negative correlation between a country adopting a MCP and making a BOP.

 

As to the regards of the fixed 2-percent rule the IMF staff recommended to the IMF Board of Directors the following 

  Quote

With regard to the permissible spreads for spot transactions, Directors welcomed staff’s proposal to replace the current fixed two-percent rule with a country-specific market-based norm that would apply uniformly across the membership. They noted that the range between the most depreciated and most appreciated exchange rates in the wholesale market on a given day would be an appropriate benchmark that is sensitive to the level of market development and market conditions in each member country. Most Directors also agreed that a two-percent tolerance margin around the mid-point of this range would help avoid capturing insignificant deviations from the market norm, although a few Directors would have preferred a higher margin. Directors also supported the proposal to treat non-spot transactions in an analogous manner, using the methodologies proposed by staff. In terms of implementation, most Directors supported retaining the notion that a single breach should constitute an MCP, while a number of Directors called for some flexibility based on materiality considerations.

 

Thanks Theseus for making the Article available...much appreciated..! :twothumbs:  RON 

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