Guest views are now limited to 12 pages. If you get an "Error" message, just sign in! If you need to create an account, click here.

Jump to content
  • CRYPTO REWARDS!

    Full endorsement on this opportunity - but it's limited, so get in while you can!

After it was officially set at 1450 dinars to the dollar ... the Minister of Finance expects the exchange rate in the market


Recommended Posts

  • Replies 240
  • Created
  • Last Reply

Top Posters In This Topic

Top Posters In This Topic

Popular Posts

Speculators should learn how to do the math on these exchanges. Please let me help. The value of IQD was 1 USD = 1190 IQD, or 1 IQD was worth (1/1190)USD or $0.00084. As of today, the value of the din

The people will lynch every member of government if they don't reverse this move quickly.  They won't have to wait until June to vote them out.   Politicians, by nature, frown on this.  Ther

All I can say let it play out and see what happens. More to this then what ink on paper .. and Good Morning DV

Posted Images

Currency devaluation and its effects

Monday 21 December 2020 11

Currency devaluation and its effects

 
Ahmed is charged
 

When we follow the world’s economies, we find there are economic experiences that prove the devaluation of the local currency in order to achieve economic gains. Indeed, they have achieved success in this matter and have become economic blocs that have their weight in the world, as this trend, which took its appropriate time, led to achieving major gains for the overall operations.

 Economic.
In Iraq, we can say that the decision to devalue the currency can be described as the right decision that leads to reducing the deficit in the public budget and works to encourage the national industry, which has been suffering from decline for decades.
Decision to devalue the currency When we compare it with other countries that have adopted the same orientation, we find that the matter is completely different from what it is in Iraq, as this decision requires the existence of a national industry capable of meeting the market need and competing with the importer who will be offered in the market at high prices.
This decision brought positive results in global economies, but in our country, it needs a pause from all concerned parties that must work towards supporting the national industry and supporting the local product. 
Here, it is imperative to provide the appropriate environment and complete facilities that support the directives aimed at having a national production that meets the market need of various products that must be manufactured according to specifications
 Globalism.
Such a decision, despite the advantages it carries for productive economies, requires that we have national factories and industry and self-sufficiency in order for the consumer to turn to the national product, as the price of imported goods will be very high.
The national product today is relatively available and depends on imported raw materials, and here it is preferable for the price of selling cash to be controlled, and the sale of hawala with controls as well, that is to work on the concentrations of where the change of the exchange rate affects.
When we stand at the Japanese and Chinese experience that adopted the devaluation of its currency, it produced positive results that created an effective economic bloc in the world, and it came to support its production the National.
Now that the decision to devalue the currency has become a reality, we have to realize the necessity to support the national product and the projects under construction in order to accelerate the national production process to create national products that enrich the citizen importer.
  • Thanks 4
  • Upvote 3
Link to post
Share on other sites
1 hour ago, fnbplanet said:

The people will lynch every member of government if they don't reverse this move quickly.  They won't have to wait until June to vote them out.

 

Politicians, by nature, frown on this.  Therefore, I believe that this will be a short-lived adjustment to the value of the Dinar.  

 

Something, that will be big enough to make the citizens forget this move, will happen VERY shortly - before the public can gather up the torches and pitchforks.

Nice to see you FNB , hope you have a great Holiday 

Link to post
Share on other sites

Devaluing currency. 

 

Okay...if you consider Venezuela and iran's prior DV's this isn't good.

 

Low price of oil deemed it necessary. Pretty cut and dried considering covid-19, they had to do something drastic.  

 

I believe Greece also tanked their currency a few years back. It wasn't pretty. 

 

There needs to be a demand for the dinar for it to have liquidity/worth. 

 

Just a thought. 

 

 

Edited by justchecking123
  • Thanks 2
Link to post
Share on other sites

When we had that black swan event back in March the big wigs were buying up all of the investments that they could at rock bottom prices. I feel like the dinar is doing the same thing right now so the people who are in the know can get in right before it goes "to the moon" as they say in crypto.

  • Upvote 1
Link to post
Share on other sites

Economic institute demonstrates the positive aspects of raising the price of the dollar

Economic institute demonstrates the positive aspects of raising the price of the dollar
{Baghdad: Al Furat News} The Iraqi Institute for Economic Reform explained the positive aspects of raising the dollar’s exchange rate against the Iraqi dinar.

The institute described in a statement, the Euphrates News Agency, a copy of it, the government's move to reform the exchange rate of the dinar as "courage, which has long been awaited, as the price of the Iraqi dinar over the past period was higher than its real value, causing some damage to the Iraqi economy."
The central bank decided the day before yesterday, Saturday, to amend the dollar exchange rate, as follows: 
1450 dinars per dollar, the price of buying foreign currency from the Ministry of Finance.
1460 dinars per dollar the selling price of foreign currency to banks.
1470 dinars per dollar is the selling price of foreign currency to the public.
The Ministry of Finance attributes the reason for the increase in the dollar exchange rate to reducing the large deficit in the 2021 budget.
Ammar Al-Masoudi

ff326fdbb99066543cef8bbeabf73434.jpg

  • Haha 1
  • Pow! 1
Link to post
Share on other sites

Bloomberg Economic Agency: Changing the exchange rate of the dollar against the Iraqi dinar is a `` deserved measure ''

 
Economy  ,   12/21/2020 13:08   http://iraqtoday.com/ar/news/47389
 
48350.jpg?watermark=4
 
 

Baghdad - Iraq today:

 

Bloomberg Economic Agency said that the decision of the Central Bank of Iraq, which includes adjusting the exchange rate of the US dollar against the Iraqi dinar, is a “deserved reduction in the value of the national currency.”

She '' Bloomberg '' in a report that the measure '' currency reduces by about 20 percent against the dollar , "indicating that it '' to avoid the depletion of countries of foreign currency reserves after came to depleted the corona virus , the demand for energy and caused the collapse of prices."

Showed the agency in Its report that “this is the first measure of its kind since 2003. It was an inevitable devaluation of the dinar due to low oil prices and budgetary pressures facing Iraq.”

The government pledged that this reduction would be one-time and not repeated, but the Bloomberg report warned of the importance of monitoring the popular response to the increase Coming in the cost of living and the government austerity program.

The central bank statement announced the reduction of the price of buying foreign currency from the Ministry of Finance from about 1190 dinars per dollar to 1450 dinars, while the selling price of foreign currency to banks became 1460 dinars per dollar, and 1470 dinars per dollar the price of selling foreign currency to the public.

 

  • Like 1
  • Upvote 2
Link to post
Share on other sites
7 hours ago, justchecking123 said:

Devaluing currency. 

 

Okay...if you consider Venezuela and iran's prior DV's this isn't good.

 

Low price of oil deemed it necessary. Pretty cut and dried considering covid-19, they had to do something drastic.  

 

I believe Greece also tanked their currency a few years back. It wasn't pretty. 

 

There needs to be a demand for the dinar for it to have liquidity/worth. 

 

Just a thought. 

 

 

And the oil demand will drive the price petrodollars!!!

Link to post
Share on other sites
13 hours ago, Z28 Freak said:

So if a person had $1,000,000 IQD, at today's rate (before fees or taxes) would be worth $680,000. Personally, I'm good with a 680 fold increase in my investment. Time will tell. 

Yep, 680 fold is much better than today rate=0.00068 still a worthless currency. Unless iraq launch a second rate at=$3.23, let's say 3 month later,  then i think some people prefer wait to cash in for second rate. Don't you think?

  • Like 1
Link to post
Share on other sites

 

12 hours ago, Longtimelurker said:

I will sell 200k uncirculated IQD for $200,000. I know thats not what you are probably willing to pay but that is the lowest i would go. Cheers🍺

Mine too. But if someone else offer a better table at $3.22 , then i will definitely take $3.22. Don't you think?

  • Like 1
  • Upvote 1
Link to post
Share on other sites

Iraq faces unprecedented economic shock following currency devaluation

As politicians debate sharp austerity proposals, ordinary Iraqis once again fear for the future
 
 

News of Iraq’s currency devaluation spread quickly last week when a copy of next year’s draft budget was leaked to local media. The news sent the unofficial rate at exchange houses skyrocketing, disturbing local businesses and panicking Iraqis.

“We are finished,” Tayieb Sabah told The National on Sunday as he walked nervously through the aisles of his supermarket, instructing workers to take down goods from the shelves and upwardly adjust prices.

“We have been accumulating losses since last week due to the fluctuation in the exchange rate after the devaluation news spread. We pay the suppliers in dollars and sell in dinars,” the 40-year-old Mr Sabah said.

Before the recent news, the unofficial exchange rate was ranging from 1,200 to 1,240 dinars against one dollar. That rate soon hit as much as 1,400.

“Suppliers have been calling us all day to change prices and we don’t know what to do,” he added.

 

As a salesman entered the supermarket to offer goods, Mr Sabah yelled at him.

“No, thanks. I will not order anything today!”

“Sir, we sell according to the old prices,” the salesman told the supermarket owner, who turned his face away.

“Let’s wait and see to where this chaos will take us,” added Mr Sabah. “I want to save myself and my business first.”

Iraqi PM Mustafa Al Kadhimi has said he would be the “first hurt” by the devaluation and austerity proposals in the 2021 budget, because of the inevitable public backlash.

But Iraq is also draining its currency reserves and faces a record breaking $40 bn deficit next year, according to Finance Minister Ali Allawi.

As a result, Iraq’s policy makers are now grappling with what promises to be the most controversial budget since 2005, when Iraq drafted its first budget following the 2003 fall of Saddam Hussein.

Economic nosedive

Mr Sabah is now applying a 25 per cent increase on the total amount of each invoice, something grudgingly accepted by clients.

“The grave consequences of this move will not appear now. But we’ll see them two to three months from now when the market enters into recession,” he said.On Sunday, wholesale and retail markets in Baghdad and other cities were almost deserted as sellers applied the higher exchange rate as protection, while buyers preferred to wait until things calm down.

“I will wait and see how things go. There are rumours that the government might retreat and apply the previous exchange rate,” said one currency exchanger.

Some exchange houses prefer to keep working but are playing it safe.

“Since the price is unstable, I buy the dollar at the 1,400-dinar rate and sell at 1,460,” Emad Salman, 63 said.

Demand for dollars has increased by nearly 50 per cent since last week, Mr Salman added.

Surging poverty

“All prices have increased by at least 20 per cent,” said Balkis Abbas, while shopping at one of Baghdad’s markets. Mrs Abbas is a doctor employed by the Defence Ministry and before the recent crisis, could have counted herself lucky to have a coveted government job.

Like many Iraqis, the mother of two says her family has been reduced to buying essentials, and the list of what they can afford is steadily shrinking.

A man walks through a market in the southern Iraqi city of Nasiriyah in Dhi Qar province, on December 20, 2020. AFP Photo A man walks through a market in the southern Iraqi city of Nasiriyah in Dhi Qar province, on December 20, 2020. AFP Photo

Among things omitted from her shopping list are preparations for Christmas, cancelling perfumes and household goods she’d ordered previously.

“To be honest, I will not take a risk and pay for these unessential things now because the situation is unstable,” she said, loading her car with a few bags of essential winter clothing for her daughters.

“Now, whoever has children pays only for food and drinks,” she added.

If the planned 50 per cent deduction on allowances is applied – a cut suggested in the current draft budget — she will end up with about 1.5 million Iraqi dinars a month, around half of which goes to pay rent. “I will quit my job and leave to the country,” she adds.

An uncertain year ahead

The devaluation has severely hit the pockets of public servants, raising fears that a burgeoning youth protest movement, until now largely confined to the unemployed, will expand to the public sector.

Such a development is becoming likelier: According to Finance Minister Allawi, without urgent austerity measures Iraq’s foreign currency reserves could be depleted in as little as six months. In other words, currency devaluation is a necessary but bitter medicine.

A man talks to a fruit vendor at a market in the southern Iraqi city of Nasiriyah in Dhi Qar province, on December 20, 2020. AFP Photo A man talks to a fruit vendor at a market in the southern Iraqi city of Nasiriyah in Dhi Qar province, on December 20, 2020. AFP Photo

"The devaluation was done in full cooperation with all the major political parties and Ali Allawi explained the reasons behind this and they all agreed," said Sarkwat Shams, a Kurdish MP for the Future Party, in remarks to The National.

"There may be some noise on the streets and some members of parliament may make some noise, but when the budget bill will come to parliament they may increase or decrease some of the cuts proposed by government. But it will pass, there is no other way to help the government to fund itself."

Other Iraqi political leaders disagree.

Ayad Allawi, former Prime Minister and secretary general of the Iraqi National Movement said that he warned the government five years ago about the situation.

Mr Allawi called for the formation of an international body to oversee the dollar auctions held by the Central Bank, long suspected of being a major source of corruption involving shell companies.

"The decision to lower the prices of the dinar is wrong, and shows the government's inability to deal with the economic crisis, especially as it seriously hurts Iraqi families," he said.

Security salaries on the line

Many MPs in parliament have said they would oppose salary cuts, calling them a “red line.”

In addition to re-energising Iraq’s protest movement, Iraq’s sharp economic decline could give rise to the worrying spectre of security turbulence next year, if the situation is not reversed.

Iraqi authorities recently deployed anti-riot troops around the Central Bank in Baghdad as activists were called for demonstrations on Monday afternoon.

Much worse could lie ahead. At the height of the war against ISIS, a public row erupted between members of Iraq’s Popular Mobilisation Forces (PMF), a group of militias who are mainly loyal to Iran.

At issue was the question of fighters’ salaries and whether the cash-strapped Iraqi government could raise them as oil prices tumbled below $30, or expand the number of fighters on the payroll.

Some groups, including a powerful militia controlled by the unpredictable cleric Moqtada Al Sadr, accused Iran-backed groups of stealing funds.

But now the situation is much worse, with little sign of recovering oil prices, at least not to the level the Iraqi government requires to pay salaries. The risk now is that groups in the PMF, which have clashed in the past, could again come into conflict.

According to Sajad Jiyad, an Iraqi analyst and fellow at The Century Foundation, this won’t be a concern as long as funds are available.

"The devaluation will not have an impact on salaries being delayed for security forces, because the government has prioritised payment of salaries for security forces for many years, even during a crisis,” he says.

But that could change next year, especially if Finance Minister Allawi’s warning about available currency reserves rapidly diminishing holds true.

“Going forward, if there was a salary reduction and taxes, that’s when it will begin to hurt people, especially in the security sector."

Iraqi policy makers now face an impossible dilemma, risking the creation of a new, nationwide protest movement next year, whether sharp austerity measures are implemented or not.

  • Thanks 4
Link to post
Share on other sites

INA documents a decline in commercial centers and stock trading

 

Monday 21st December 2020 - 16:56

INA documents a decline in commercial centers and stock trading

INA – Baghdad

Photography - Safaa Alwan

Iraqi News Agency (INA) documented the decline effects in commercial centers as well as in the stock exchange markets in Baghdad.

It seems that the decision of the Ministry of Finance and the Central Bank to raise the exchange rate of US dollar to 1.450 IQD, reflected on the shopping movement.

INA camera observed a noticeable stagnation in the shopping movement in Shorja market and the surrounding commercial areas.

Iraqi Stock Exchange also stagnated in a session today, amid anticipation and warnings of speculators in the stock market.

 
  • Thanks 2
Link to post
Share on other sites

Iraq devalues currency by 22 per cent

 
December 21, 2020 at 1:39 pm | Published in: Iraq, Middle East, News
Iraqi dinar banknotes [Ali Choukeir/AFP/Getty Images]
An Iraqi counts his dinar banknotes on 22 June 2017 [Ali Choukeir/AFP/Getty Images]
 
December 21, 2020 at 1:39 pm
 

Iraq has seen the biggest devaluation of its currency since the 2003 US led invasion with the Central Bank announcing on Saturday that it was devaluing the dinar by 22 per cent. The desperate measure, undertaken in response to a severe liquidity crisis brought on by low oil prices, has sparked public outrage.

According to the AP, riot police were dispatched outside the central bank headquarters in central Baghdad prior to the announcement in the event news of the devaluation sparked protests. A leaked draft of the state budget law for 2021 caused furore on the Iraqi street last week as it confirmed plans to devalue the dinar.

The new rates represent a dramatic reduction from the previous official rate of 1,182 IQD (Iraqi dinar). It is the first reduction in exchange rates that the Iraqi government has made in decades.

In a statement, the Central Bank set the new rate for the dinar, which is pegged to the US dollar, at 1,450 IQD when selling to the Iraqi Finance Ministry. The dinar will be sold to the public at 1,470 IQD and to other banks at 1,460 IQD.

Since an oil price crash earlier this year, Iraq has been grappling with an unprecedented liquidity crisis. The crude-exporting country has had to borrow from the bank's dollar reserves to pay the nearly $5 billion in monthly fees for public salaries and pensions. Oil revenues, which account for 90 per cent of the budget, have brought in an average of $3.5 billion.

Iraq: Foreign exchange reserves down 12.5% in Q1 of 2020

Iraq's public sector has trebled in size since the 2003 invasion, and the government is easily the country's biggest employer.

The World Bank is expecting poverty to rise sharply as its oil-dependent economy shrinks, said a report in the Financial Times. War-fatigued Iraq's financial situation is said to be so grave that Baghdad is in talks with the IMF for support.

Devaluation "sends a signal to the IMF and others about how desperate the situation has become and Iraq is ready to take some of these painful steps" towards more fiscal austerity, Sajad Jiyad, a Baghdad-based fellow with the Century Foundation, is reported saying in the FT. 

With Iraq relying on imports, Jiyad warned of the pain the potential inflation would cause. "For the general population there's a worry that food prices will increase, we still import most of our foodstuff," said Jiyad.

Iraq's Finance Minister Ali Allawi has warned of the wider corruption fuelling the financial crises saying that Iraq must take serious measures to reform its spending, which has ballooned as politicians used public hiring to buy votes and loyalty.

  • Thanks 1
  • Upvote 1
Link to post
Share on other sites

Rikabi: The government has no control and raising the dollar represents a blow to the markets

%D9%83%D8%A7%D8%B7%D8%B9-%D8%A7%D9%84%D8

Information / Baghdad

On Monday, MP Kata Al-Rikabi described the decision of the Ministry of Finance and the Central Bank to raise the exchange rate of the dollar, a hasty step that dealt a heavy blow to the Iraqi markets.

Al-Rikabi said in an interview with Al-Maalouma, “The raising of the US dollar’s exchange rate surprised everyone, whether politicians or even observers of economic activity. "Unprecedented for prices and for foodstuffs."

He added that "any government approval to raise the exchange rate must be matched by alternatives that secure immunity to the poor and the simple from the flame of prices in the markets, which unfortunately the government does not have any control frameworks over if prices are on a continuous rise in a manner that constitutes another burden on the shoulders of the poor and the simple." Reconsidering the financial and central bank decisions and looking for economic solutions that contribute to overcoming the financial crisis without any impacts on the markets, especially basic foodstuffs.

The Iraqi market witnessed a steady increase in prices after the day of raising the exchange rate of the US dollar at high rates. ”25 P

  • Thanks 1
  • Upvote 2
Link to post
Share on other sites

Finance Minister: We made a change in the dollar exchange rate to protect the economy

Finance Minister: We made a change in the dollar exchange rate to protect the economy
 

Finance Minister Ali Allawi:
We made a change in the exchange rate of the dollar to protect the economy. The
revenue difference by changing the exchange rate will be allocated to support vulnerable groups in society. The 
budget is the first step in the path of economic reform.

Minister of Planning Khaled Al-Battal: The
volume of investment spending will be around 8 trillion dinars. The
budget included the suspension train project, the Faw port and a number of projects

 

  • Upvote 2
Link to post
Share on other sites
5 hours ago, rvmydinar said:

Yep, 680 fold is much better than today rate=0.00068 still a worthless currency. Unless iraq launch a second rate at=$3.23, let's say 3 month later,  then i think some people prefer wait to cash in for second rate. Don't you think?

That theory is pretty much guru talk and will never happen IMO. But if you want to wait and hope nothing else happens like a war or something that could effect value that’s the gamble you take. However I can tell you this the reason why that is guru talk is because they don’t know how the process works! All of our dinar outside of Iraq will never go back to Iraq they go to our federal reserves and we hold them as a reserve currency so Iraq never has to pay for all the dinars outside of Iraq! Iraq Only has to cover the dinar that is circulating Inside of Iraq!! That’s why this is a big move to devalue the currency to get the citizens to bring their dinar into the banks and get as Much dinar off the streets as possible right before they RV!!! So no I absolutely do not think we will ever see a sucker rate period and then a higher rate 90 days later because that is not how the process works since Iraq never has to cover what’s outside of Iraq. Inside Iraq a dinar is a dinar they don’t exchange for anything it just increases their purchasing power.

Edited by Dinarrock
  • Like 1
  • Thanks 1
  • Upvote 6
  • Pow! 2
Link to post
Share on other sites
1 hour ago, Dinarrock said:

so Iraq never has to pay for all the dinars outside of Iraq! Iraq Only has to cover the dinar that is circulating Inside of Iraq

Actually any change or decline in value is just value or loss of value taken out of thin air.

The covering of dinar by gold or oil only effects what can reasonably put into circulation.

 

Ill give you an example, if the cbi had to cover and positive rv somehow, then what happens if it decreases in value? Do we have to send the cbi a check?

Sounds ridiculouss right.

 

 

  • Thanks 1
Link to post
Share on other sites
Guest
This topic is now closed to further replies.
  • Recently Browsing   0 members

    No registered users viewing this page.




  • Testing the Rocker Badge!

  • Live Exchange Rate

×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.