CBI Currency Auction 5/8/2011

[Striker]

I think we need to look at the overall trend during the past two weeks. They have publicly stated that they are sterilyzing the currency. This could be the beginning of an upward trend, or more of an aberration. We do know that they have been suffering from low currency auctions and one day of a higher auction doesn't wipe out the lower auctions if that makes sense. I think we just wait a little longer than we thought.

I could not have said it better myself. Anyone who studies and makes a living trading currency knows that this is what we call coming up for a big gulp before a big change happens. This usually happens when things are setting up to make a large move up or down. I personally look for these signs in trading. Some people call it the rubber band method. It generally is a very strong indicator. Stay calm and continue enjoying this ride b/c this is an investment that doesn't happen everyday year after year. This is one of those once in a life time investments. Normal rules do not apply in this investment either. It is easy to see this on the trading platform and know when to get in and get out, but not even the most experienced trader knows what is going to happen with this but there is only one way to go from the bottom and that is up. I do hope this auction after having such low auctions is an indicator. If it where live on the forex I would be getting in today after a movement like this.

[taxguy]

A couple of questions on this.

1) Somewhere recently, I read that the CBI was actually selling USD, buying back the dinar large denoms. Is that true?

2) What other possible reasons could there be for this increased auction today?

3) If they are selling dinar, could it now be the lower denoms?

4) Could it be a surge on last minute investors buying?

Just some questions looking for educated answers, that's all.

Some answers to your questions:

1) Yes. At the auctions, the CBI is always selling IQD and buying dollars at the official exchange rate. This is how the CBI has been able to maintain a stable rate for the past few years.

2) The CBI said that the low auction volume last week was due to newly imposed requirements that the banks participating in the auction provide tax information about their customers for whom the banks were buying dollars. This primarily impacted the "transfers out" portion of the auction, where the CBI is basically selling foreign remittances - converting dollars to IQD and then transferring the dollars out of Iraq. It seems that the imposition of this requirement caused the banks and their customers to pause and not participate in the "transfers out" portion of the auctions last week. As the IQD can't be used for international transactions, this part of the auction is vital to Iraq to be able to import needed goods and services.

3) The CBI never sells dinar at the auctions. The CBI is always selling dollars at the auction. The Iraqi government has lots of dollars from oil revenues, which are always paid in dollars. I had this confirmed by a top Iraqi government economist, who meets with Shabibi and the minister of finance and is in a position to know this.

4) Based on the answer to number 3, the answer to this question is "no."

i hope this helps.

Edited May 8, 2011 by taxguy

[Carrello]

Taxguy,

I am trying to understand your answers. Are not #1 and #3 contradicting themselves regarding buy and selling dollars and IQD. Or it is too early and I need a cup of Joe?

1) Yes. At the auctions, the CBI is always selling IQD and buying dollars at the official exchange rate.

3) The CBI never sells dinar at the auctions. The CBI is always selling dollars at the auction.

Just a rookie trying to understand your statements.

Thanks.

[skepticaldinar]

I think you are correct. They are still buying back the large denominations. The more of the dinar they can get back before the RV, the less they will have to redeem at the higher rate. Maybe the 12 banks are trying to get enough USD to cash in for some of their customers as well. I am sure there will be some people who will go to Iraq to cash in, and they will want USD. JMO

I am afraid that you may want to read outside the forums to understand why countries hold currency auctions.The things you have mentioned do not come into play. If you went to Iraq to cash in with as much as most of us have,it would probably be confiscated and there wouldn't be anything we could do about it.

[Gibbs427]

Taxguy,

I am trying to understand your answers. Are not #1 and #3 contradicting themselves regarding buy and selling dollars and IQD. Or it is too early and I need a cup of Joe?

1) Yes. At the auctions, the CBI is always selling IQD and buying dollars at the official exchange rate.

3) The CBI never sells dinar at the auctions. The CBI is always selling dollars at the auction.

Just a rookie trying to understand your statements.

Thanks.

It does seem contradicting to me as well

[Sucma]

^^^^^^^^^ HISSEYFIT happening right now! €£¥%#<>€*£^£+£*£?!?!',{}][]#^,||.~,<?>!€'k,l?!!!!

[Danneedsrvnow]

I thought the cbi made a law stating they wouldn't sell more than $50 mil a day? Wtf!!!!!

I don't recall a law on this(could be, but not sure)......however I believe it was stated in an article that this would be the case(supposedly sterilization).

My guess is that it was not a sterilization process that was taking place, or the sterilization process completed for a purpose other than the rv. No one knows for sure.

[ChrisA70]

Darn..... I thought I was closer to going home to Massachusetts and getting the heck out of FL..... Still being patient. hoping for IT to happen for all of us soon.

[Danneedsrvnow]

Yikes! Not what we wanted to see...

Thanks for the post.

You got that right!!

Funny how a chat from Athena from some other site. She was telling all of her nieve followers that her contact from CBI said they were no longer selling dinar....& the very next day it's a pretty big auction.

But sadly her followers will still believe her every lie. Something like this & many other rumors cannot be classified as bad intel, a mistake, it was right on that specific day & now it isn't.........no, it's just a flat out lie.

I do really hope we are close.......

Dan

[zaborniake]

Maybe they were selling lower denoms to the banks.

They also starved the market out the past two weeks. This may be catch up. Who knows?

[taxguy]

Taxguy,

I am trying to understand your answers. Are not #1 and #3 contradicting themselves regarding buy and selling dollars and IQD. Or it is too early and I need a cup of Joe?

1) Yes. At the auctions, the CBI is always selling IQD and buying dollars at the official exchange rate.

3) The CBI never sells dinar at the auctions. The CBI is always selling dollars at the auction.

Just a rookie trying to understand your statements.

Thanks.

You are right, my mistake. I meant to say that the CBI is always buying dinar at the auctions. Its buying dinar / selling dollars. I got it backwards. Sorry!

[M.D.]

thanks for the post ......... I guess we'll just have to wait and see