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Economist: The International Monetary Fund suggested to Iraq that the exchange rate should remain at 1130


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The economist, Hakim Al-Adly, said on Monday that the government's insistence on keeping the exchange rate at what it is in the budget at 1445 is illogical.

Al-Adly said, in a statement to the information agency, that “what the exchange rates have witnessed of high may push the Iraqi citizen to return to the days of selling window curtains and home doors in order to provide a livelihood for children in light of the exorbitant price that Iraq will accept. when the price of 100 dollars reached 150 thousand Iraqi Dinar".

He added, “The government's insistence is illogical about the dollar’s exchange rate remaining the same, and there is no justification for its survival, especially since the International Monetary Bank proposed to Iraq. that the price of the dollar be at the limits of 1130 dinars and not as approved in the budget at 1445 ″.

He pointed out that "the coming days may witness a big jump in prices, and it is likely that they will increase when the budget reaches the Presidency of the Republic and is approved," indicating that "we will not be surprised if the dollar price reaches 1550 dinars, as it is a government desire to exhaust the citizen."

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6 minutes ago, Laid Back said:

“The government's insistence is illogical about the dollar’s exchange rate remaining the same, and there is no justification for its survival, especially since the International Monetary Bank proposed to Iraq. that the price of the dollar be at the limits of 1130 dinars and not as approved in the budget at 1445 ″.

 

Years ago the ministry of planning did a feasibility study about the dinar exchange rate $1.13 per dinar.

The IMF proposed to Iraq 1130 dinars per dollar

1130 dinars minus 000 = $1.13 dinars per dollar

What a coincidence.

 

Go New exchange rate

Go purchasing power

Go 2021

I remember that study now that you say it.. No coincidences!

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1 hour ago, GreedyDinar07 said:

WOW!!!! Thanks laid back!! It is right there in black and white!! Damn it Iraq what in the hell are you waiting on!! Pull in the 000's and lets get down to business!! Awesome post!! 

 

Greedy the feasibility study doc. was on the Ministry of Planning website ( MOP ) in 2008 , it was removed or taken down in either 2018 or 2019 and was never reposted , take it how you will ....  here is what i can post from the MOP document  all the best ........

 

Below are the central controls related to the exchange rate of the foreign currency to convert the project inputs and
outputs from foreign currency to its equivalent in the local currency, and that is by calculating the net discounted
present value standard and the internal return on investments in economic analysis that governs investment projects
that costs excess one million dinars.

Estimate the shadow price of foreign currency:
1. It is necessary to put central controls to amend the official exchange rate * to reflect the shadow
price of the foreign currency, and that is considered one of the necessary requirements to implement the net
discounted present value standard and the internal return rate on investment in the economic calculation stated in
the instructions, paragraph nine.

The central controls for adjusting market prices distinguished a group of outputs and inputs traded internationally,
where the projects production or usage of them is reflected on the abundance of foreign currency in the economy
and thus project outputs or inputs used of such are considered purely foreign currency outputs or inputs.

* What is meant by exchange rate: the number of units of foreign currency, expressed in
dollar per one dinar.
In particular the following outputs and inputs of foreign currency were distinguished:
• Export-outputs.
• Outputs marketed locally that substitute imports.
• Imported inputs.
• Inputs produced locally that usually go to exports.
• Foreign labor.
According to the pricing rules the value of the output and input (traded) is calculated using
export prices (FOB) and import prices (CIF), according to what is listed in the pricing rules.
In other words the pricing rules calculate what the project produces from foreign currency
(quantity of exports multiplied by the export price (FOB) in foreign currency or the quantity of
substitute imports multiplied by the import price (CIF) in foreign currency, as well as what the
project uses from foreign currency and imported inputs multiplied by the import price (CIF) in
foreign currency .... etc.).
In a later step, project outputs and inputs must be converted from the foreign currency to its
equivalent in local currency (dinars) by using a specific exchange rate for the foreign currency.

2. Justifications for exchange-rate adjustment: there are a number of important and powerful arguments
which support the view that the official exchange rate reduces the real value of foreign currency for purposes of
calculating the economic national profitability for investment projects and hence for the purposes of investment
planning. It is demonstrated in this context to call for assessing the dinar for less than (3.208) dollar (official
exchange rate) when assessing project outputs and inputs of traded goods of exports, substitute imports and
imports... etc.

The justifications to call for the use of an exchange rate that is lower than the official exchange rate are:
• The use of an exchange rate that is lower than the official rate is the appropriate action at the investment
planning level to translate the country’s economic strategy aiming at stimulating central investments in the
sectors that encourage the development of non-oil exports, as well as sectors that encourage the expansion of
domestic production base in order to reduce imports and compensate it with local commodities. This helps to
reduce reliance on foreign exchange earnings from crude oil exports and increases the share of non-oil sectors in
the local production.

• The application of the amended exchange rate on project imported inputs will assist in directing investments
away from aggregated sectors dependent on imported inputs and the preference of those sectors that rely on
locally produced inputs.

• The use of the amended exchange rate helps to correct the balance in favor of the traded goods sectors
compared to non-traded goods.

• The real exchange rate has declined rapidly since the early seventies, through rapid rise of the level of prices
and local costs which led by the steadiness of the official exchange rate to change in prices and actual local rate
costs that gave an advantage for imported goods at the expense of locally produced goods, meaning that it led to
deterioration of the competitiveness of alternative replacement goods and export commodities.

• This action shows that the official exchange rate overestimates the value of the dinar, compared to the
foreign currency and from the promoting goods substituting imports and export commodities point of view of.
And in support to this view is the state’s utilization and in a broad approach to the customs and quantitative
protection policies especially for consumer goods, as well as export subsidies that exports have through an
amended export exchange rate.

3. Estimate the amended exchange rate of the Iraqi dinar to be used in technical and economical feasibility studies and for (1.134) dollar per dinar. This price should be approved for 3 years until reappreciation by the competent authorities.
 

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So this explains it all!! They are on no. 2 and they need to move to no. 3 ASAP!! This is why even though I get discouraged with the time line of this happening it is kind of hard for me to believe they will wait a "Longtime" to increase the exchange rate. That $1.13 will be life changing!!! Go Iraq!! Go RV!!  

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50 minutes ago, WheresmyRV? said:

That study was done back in 2013. Fast forward to now with Iraq having more gold in their reserves, they should be closer to coming out to 2 bucks.


Boy oh boy!!!!! Talk about teasing me with a good time  :lol:

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1 hour ago, WheresmyRV? said:

That study was done back in 2013. Fast forward to now with Iraq having more gold in their reserves, they should be closer to coming out to 2 bucks.

 

@ wheresmyrv Not that any of this even matters but here is a post from DV dated 10 / 5 / 2010 about the topic discussed in this thread I first read it in 2008 it has since been removed off the web , but hey here we sit in 2021 🤣 , when the british pound peg to the iqd stopped and it pegged to the usd the iqd was never below 2 to 1 , i'm not speaking of saddam's self imposed inflated value of over 3 to 1 , iraq rolls from one crisis after another they never seem to get on the right side of forward motion ( leadership )  but im still looking to the future ... all the best

 

 

 

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11 minutes ago, 3n1 said:

 

@ wheresmyrv Not that any of this even matters but here is a post from DV dated 10 / 5 / 2010 about the topic discussed in this thread I first read it in 2008 it has since been removed off the web , but hey here we sit in 2021 🤣 , when the british pound peg to the iqd stopped and it pegged to the usd the iqd was never below 2 to 1 , i'm not speaking of saddam's self imposed inflated value of over 3 to 1 , iraq rolls from one crisis after another they never seem to get on the right side of forward motion ( leadership )  but im still looking to the future ... all the best

 

 

 

I firmly believe that a 1.13 was the rate Shabs was going to come out back in 2013 before Malaki got rid of him.  Stupid Malaki :facepalm:

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  It's hard to calculate dinar versus USD when up is down and down is up . Down is up. There are some pip movements , from 1,484 to 1,432 

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13 hours ago, 3n1 said:

2. Justifications for exchange-rate adjustment: It is demonstrated in this context to call for assessing the dinar for less than (3.208) dollar (official exchange rate) 

 

 
3. Estimate the amended exchange rate of the Iraqi dinar to be used in technical and economical feasibility studies and for (1.134) dollar per dinar. This price should be approved for 3 years until reappreciation by the competent authorities.

i can live with the rate between 1.134 usd - 3.208 usd. 3 years from what year? don't you think the date was already expired?  or is there the newest feasibility study document ( year 2020 or 2021 ) that has already been updated?

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4 hours ago, 3 bucks new rv rate said:

i can live with the rate between 1.134 usd - 3.208 usd. 3 years from what year? don't you think the date was already expired?  or is there the newest feasibility study document ( year 2020 or 2021 ) that has already been updated?

 

that feasibility study was done 13 years ago ( time flies when ur having a good time ) :facepalm3: , not sure why that figure was used at the time , that is one of the carrots that kept speculators engaged . cheers

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1 hour ago, 3n1 said:

 

that feasibility study was done 13 years ago ( time flies when ur having a good time ) :facepalm3: , not sure why that figure was used at the time , that is one of the carrots that kept speculators engaged . cheers

Hopefully , the minister of planning ( back in 2008 ) will bring it up again when the time is right ( hopefully before they want to delete 3 zeros and release lower denoms ). 

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