IMF - MOF talks

[rockfl9]

It looks like the 2021 budget will be 70 trillion dinar. But even if oil goes to $48 dollars the revenue will only be 50T dinar.  That means a loan of about $20 Bn for the year.

Iraq has exhausted its  credit in the normal market the IMF/WB are the only source.  BUT is the IMF going to stand back and allow the CBI to INCREASE the exchange rate and give it away!  For years the IMF has advised the GOI to reduce costs  by eliminating jobs or just plain reduce salaries. The IMF will ,I think, force Iraq to make more permanent changes to its finances.

The real solution is to cut salaries about 25% or change the pay schedule to 6 weeks . An alternative would be to bump the rate to 1400:1.  But that would be hard for the economy to take in one jump.  

To give a loan the IMF will force the GOI to do one or the other  OR a mix of the two.   But a change is coming.     

 

[rockfl9]

The MOF needs to get more dinar per dollar , not less.   So the exchange rate must go UP NOT  DOWN.  There are 100T dinar in M! (cash equivalent funds) . There may be less than $20Bn in reserves. That puts the REAL value at .00002 cents!

5000:1  ???  The CBI still contends that the reserves are $60Bn BUT $40BN is in GOI bonds/notes. The GOI wont be able to cover those in decades , if they are lucky.