Popular Post vrnorth Posted June 2, 2011 Popular Post Report Share Posted June 2, 2011 Good read. This is in the chat area at DD. DFI (Development Fund for Iraq) runs out June 30 2011, this is not rumor: http://articlesofinterest-kelley.blogspot.com/2010/12/june-30th-2011-times-up-iraq-and-un.html CBI Country report from march, states that the revaluation of currency has to be done before the end of June of 2011, search the document for revalue: http://www.imf.org/external/pubs/ft/scr/2011/cr1175.pdf There is a bunch of stuff they need to do after the currency revalues, so yeah, has to happen real soon. They can not wait till the last minute and still get the work done that has to be done after the RV and before June 30th. The UN Recognizes the Iraq currency as a viable up and coming international currency, but they will not post a real Rate change until it actually happens: http://treasury.un.org/operationalrates/OperationalRates.aspx Just being posted as having an operational exchange rate is a solid indication that it will become an international exchange currency. This chart will reflect that value change after it happens. There are numerous contracts that have to be paid and these are being filled by international companies, they are not going to continue for too long getting paid in currency that they can not spend outside of Iraq, especially when they are dependent on bringing in materials from the outside to fill these contracts. Don’t be fooled by estimated rates for future planning. These are rates that are being used to make planning closer to ball park figures. http://www.mop.gov.iq/mop/index.jsp?sid=1&id=308&pid=295&lng=en This site is as it says so that they can make future plans with an estimate of possible revalued dinar. An actual RV will supersede these rates. This is significant as we get links to contracts and budget information that is based on this standardized estimate until the currency really assumes it’s true value, like: http://dinartrade.org/the-recent-iraq-2011-budget-may-have-leaked-the-coming-currency-revaluation/ or the Dam contract for 11 Bln IQD These are based on feasibility estimates which will be lower then the actual RV in order to secure the feasibility of the project after the RV. If they did their estimates based on say 7 USD to 1 IQD and the RV came in at say 4 instead of 7 they would be way under budgeted and come up short on being able to pay off projects after the RV, so the estimate is low in order to insure the feasibility of being able to accomplish the end results post RV. Thought I would do a preemptive post before someone tried posting the RV is going to be 1.134 or 1.168 USD to 1 IQD. Any post that states the RV is coming in this low or lower is bad intel based on official public documentation. The feasibility article actually explains the justification for using a rate lower then 3.20 an accepted estimated rate of exchange, also not the RV rate. You can not plan or estimate feasibility on “I don’t know what it is worth” so they have set low-ball figures to be able to begin planning that has a reasonable chance of success. The Rate will be absolutely higher then the Estimated feasibility rate and probably higher then the additionally quoted estimated rate, when the RV actually happens. I am no Guru, and have no inside sources, this is not protected secret information, just using reasonable logic to analyze public information. Based on Iraq Government and Banking documents posted in public view, we should see an RV before the end of June, probably as soon as they can now and the rate should be over 3.20 USD to 1 IQD. This is not based on inside information or some hidden inside source, this is based on Public documentation. No guess work, it is what the Iraq government and CBI have already told us. If this does not happen, it is not bad intel received by a guru, it is the government and the bank of Iraq that will have failed to achieve their publicly stated plan of action. If this does not happen it does not mean it will never happen, just that the plan may fall behind schedule. Ask any contractor, they make their estimates on large projects padding cost and time, then adding a percentage to make sure they can get it done in budget and on time, but sometimes things happen and they still go over budget or past the project deadline, life is not perfectly predictable. I wonder if Vegas has a spread on the DATE and RATE … Totally agreed 24 Link to comment Share on other sites More sharing options...
af4mi Posted June 2, 2011 Report Share Posted June 2, 2011 Solid post...I wonder what it will actually come out at? Link to comment Share on other sites More sharing options...
dinarmamma Posted June 2, 2011 Report Share Posted June 2, 2011 Great read! Thanks for the post. Link to comment Share on other sites More sharing options...
nettie Posted June 2, 2011 Report Share Posted June 2, 2011 Great find! Awesome read! Thank You! Link to comment Share on other sites More sharing options...
preston Posted June 2, 2011 Report Share Posted June 2, 2011 Thanks for the excellent post! ROLL RV! Link to comment Share on other sites More sharing options...
Pilgrim Posted June 2, 2011 Report Share Posted June 2, 2011 You know people post things with links and others just believe them. I don't really blame you for taking some ones word, It is what I would like to do. However, the original post claims that within the IMF report that they link to it states that they (Iraq) must revalue before the end of june. Well it certainly does NOT say that in fact in regards to the IMF file they say: Page10 point 15. The CBI will continue to aim at keeping inflation low, predominantly by maintaining a stable exchange rate. The low level and the relative stability of inflation do not suggest any significant over- or undervaluation of the Iraqi dinar. Also, a stable exchange rate continues to provide a solid anchor for the public’s expectations in an otherwise highly uncertain environment and in an economy with a very low level of financial intermediation. Meanwhile, the CBI will continue to keep its policy interest rate positive in real terms. To enhance mobilization of domestic financing, limitations on state-owned banks’ use of government deposits for investing in Treasury bills have been reduced, while the pension fund has also been allowed to invest in Treasury bills and to participate in auctions directly. This is either a mistake by the original poster (whoever they are from PD) or a gross misrepresentation (lie). If i am mistaken and somewhere else in the document it actually does state this please let me and everyone else know. 2 1 Link to comment Share on other sites More sharing options...
countryroads Posted June 2, 2011 Report Share Posted June 2, 2011 Okay Iraq, 28 days left and counting. TIC TOC, TIC TOC, TIC TOC. GO RV Link to comment Share on other sites More sharing options...
Psych Posted June 2, 2011 Report Share Posted June 2, 2011 You know people post things with links and others just believe them. I don't really blame you for taking some ones word, It is what I would like to do. However, the original post claims that within the IMF report that they link to it states that they (Iraq) must revalue before the end of june. Well it certainly does NOT say that in fact in regards to the IMF file they say: Page10 point 15. The CBI will continue to aim at keeping inflation low, predominantly by maintaining a stable exchange rate. The low level and the relative stability of inflation do not suggest any significant over- or undervaluation of the Iraqi dinar. Also, a stable exchange rate continues to provide a solid anchor for the public’s expectations in an otherwise highly uncertain environment and in an economy with a very low level of financial intermediation. Meanwhile, the CBI will continue to keep its policy interest rate positive in real terms. To enhance mobilization of domestic financing, limitations on state-owned banks’ use of government deposits for investing in Treasury bills have been reduced, while the pension fund has also been allowed to invest in Treasury bills and to participate in auctions directly. This is either a mistake by the original poster (whoever they are from PD) or a gross misrepresentation (lie). If i am mistaken and somewhere else in the document it actually does state this please let me and everyone else know. This is the section that is being referred to... A critical step will be to complete the financial restructuring of the two largest stateowned banks, Rafidain and Rasheed, based on their completed financial and operational audits. In this regard, we formed a Bank Reconciliation Unit that comprises technical level staff from the banks, the CBI and the Ministry of Finance, and with the assistance of Ernst and Young (who were the agents of the Ministry of Finance in the external debt restructuring process) to: (i) deal with all legacy external liabilities taking into account the government’s actions in the context of Iraq’s external debt restructuring (ii) indentify and propose to write-off non-performing loans to defunct state-owned enterprises; (iii) propose a course of action for other remaining unreconciled accounts; and (iv) after the balance sheets have been cleaned up, revalue the remaining foreign currency denominated balance sheet items. The BRU will work under the supervision of the Restructuring Oversight Committee (ROC), consisting of the Minister of Finance, the Governor of the CBI, and the Chairman of the BSA. The BRU will send its recommendations for final approval to the respective boards of the two banks. Through this process, we aim to complete the restructuring of the balance sheets of Rafidain and Rasheed by end-June 2011 (a structural benchmark). 1 Link to comment Share on other sites More sharing options...
BanG Posted June 2, 2011 Report Share Posted June 2, 2011 Super find and great post! Very much enjoyed the read and it does appear that the GOI is running out of time quickly IMO. Would be interesting to see Scooters thoughts on a drive-by on this particular article do you not agree? Very subject for healthy debate IMO. Peace. 2 Link to comment Share on other sites More sharing options...
Markinsa Posted June 2, 2011 Report Share Posted June 2, 2011 This is the section that is being referred to... A critical step will be to complete the financial restructuring of the two largest stateowned banks, Rafidain and Rasheed, based on their completed financial and operational audits. In this regard, we formed a Bank Reconciliation Unit that comprises technical level staff from the banks, the CBI and the Ministry of Finance, and with the assistance of Ernst and Young (who were the agents of the Ministry of Finance in the external debt restructuring process) to: (i) deal with all legacy external liabilities taking into account the government’s actions in the context of Iraq’s external debt restructuring (ii) indentify and propose to write-off non-performing loans to defunct state-owned enterprises; (iii) propose a course of action for other remaining unreconciled accounts; and (iv) after the balance sheets have been cleaned up, revalue the remaining foreign currency denominated balance sheet items. The BRU will work under the supervision of the Restructuring Oversight Committee (ROC), consisting of the Minister of Finance, the Governor of the CBI, and the Chairman of the BSA. The BRU will send its recommendations for final approval to the respective boards of the two banks. Through this process, we aim to complete the restructuring of the balance sheets of Rafidain and Rasheed by end-June 2011 (a structural benchmark). I would like to point out, I don't believe this is talking about the Dinar, but rather, Currency that is Foreign to Iraq, IE US Dollar, Franc, Pound, Yen, etc... 3 1 Link to comment Share on other sites More sharing options...
JuryPicker Posted June 3, 2011 Report Share Posted June 3, 2011 I would like to point out, I don't believe this is talking about the Dinar, but rather, Currency that is Foreign to Iraq, IE US Dollar, Franc, Pound, Yen, etc... I would like to point out that I don't believe anybody knows what is going on. Not out all. Armchair experts galore 1 Link to comment Share on other sites More sharing options...
zaborniake Posted June 3, 2011 Report Share Posted June 3, 2011 The balance sheets are going to be zeroed out and the banks will be recapitalized via the IMF. Scooter discussed this in chat on 6/1. Link to comment Share on other sites More sharing options...
zaborniake Posted June 3, 2011 Report Share Posted June 3, 2011 And unless the dinar revalued, why would the foreign currencies need to be revalued? If the rate stays the same, at 1170, they already know the rates of exchange. 4 Link to comment Share on other sites More sharing options...
proteus Posted June 3, 2011 Report Share Posted June 3, 2011 This is what the above mentioned IMF document states should happen on or before JUNE 30th: Financial Sector 12. Financial intermediation is at a very low level in Iraq. A functioning banking sector is essential for the development of a strong private sector. We have begun to embark on our banking sector reform strategy: A critical step will be to complete the financial restructuring of the two largest stateowned banks, Rafidain and Rasheed, based on their completed financial and operational audits. In this regard, we formed a Bank Reconciliation Unit that comprises technical level staff from the banks, the CBI and the Ministry of Finance, and with the assistance of Ernst and Young (who were the agents of the Ministry of Finance in the external debt restructuring process) to: (i) deal with all legacy external liabilities taking into account the government’s actions in the context of Iraq’s external debt restructuring (ii) indentify and propose to write-off non-performing loans to defunct state-owned enterprises; (iii) propose a course of action for other remaining unreconciled accounts; and (iv) after the balance sheets have been cleaned up, revalue the remaining foreign currency denominated balance sheet items. The BRU will work under the supervision of the Restructuring Oversight Committee (ROC), consisting of the Minister of Finance, the Governor of the CBI, and the Chairman of the BSA. The BRU will send its recommendations for final approval to the respective boards of the two banks. Through this process, we aim to complete the restructuring of the balance sheets of Rafidain and Rasheed by end-June 2011 (a structural benchmark). Meanwhile, the Ministry of Finance will continue to work closely with the World Bank under its banking sector project to modernize these banks by moving ahead with the plans for their operational restructuring. These banks will operate on a fully commercial basis, on market terms, and the government will refrain from directing any lending. Decisions on the recapitalization of Rafidain and Rasheed will not be made until the restructuring of their balance sheets has been completed and adequate progress has been made in their operational restructuring, especially by establishing an appropriate governance structure and strengthening risk management and control functions. More generally, given the vulnerabilities these (and other) banks face due to operational risks, the CBI will continue to improve its oversight systems and monitor closely the activities of the banks, particularly during the transition process. The new set of prudential regulations for commercial banks, including those related to minimum capital requirements, liquidity risk, and anti-money laundering, are being implemented. Work on the relevant reporting tables for the banks will be completed soon in consultation with the IMF and other technical assistance providers. Under the auspices of the World Bank banking sector project, we have conducted a full assessment of the banking supervision department, and this report will form the basis of improving this department. 38 The CBI will continue to strengthen the management of its international reserves in line with the adopted reserves management guidelines. The CBI will follow the guidelines to diversify currency composition and establish an appropriate duration and credit risk profile, and build capacity for risk analysis. We will continue to provide monthly reports to the CBI board (and to the IMF) based on the investment criteria established in the guidelines. V. PROGRAM SAFEGUARDS AND MONITORING, DEBT AND DATA ISSUES 13. As we did for the program approval and first review disbursements, we intend to continue to use the domestic counterpart of IMF resources for budget support. As before, the CBI—which is the fiscal agent—will request the IMF to disburse the resources directly into a government account at the CBI. To buttress program safeguards risks we have already taken or will take the following measures: The CBI appointed an external auditor to conduct special audits of its net international reserves and net domestic assets as of end-June 2010 and this work was completed by mid-January 2011 (a benchmark for end-October 2010). We have also already appointed an international audit firm to conduct the audit of the 2010 CBI financial accounts. In addition, we will request the auditor to also complete special audits of the CBI’s net international reserves and net domestic assets as of December 31, 2010 (a new benchmark for end-May 2011); and provide staff with the draft 2010 audited CBI financial statements and draft management letter (also a new benchmark for end-May 2011). The recently completed safeguards assessment update made a few recommendations that we will implement: (i) we took a decision and have changed the composition of the CBI’s internal audit committee to have a majority non-executive membership and to operate with a terms of reference in line with Fund recommendations (a benchmark for end-October 2010); (ii) we have appointed an external audit expert to help us assess our internal audit needs; and (iii) we are in the process of selecting a reputable accounting firm to conduct an internal audit of the CBI and to provide assistance to strengthen the CBI’s internal audit function (a benchmark for end-December 2010). We have amended the Memorandum of Understanding between the CBI and the Ministry of Finance to provide the CBI with the authority to appoint its external auditors and to include a provision that requires the Ministry of Finance to issue promissory notes payable on demand to the Fund promptly following each disbursement under the SBA and to deposit these promissory notes in the IMF securities account with the CBI. 14. Progress has been made in moving toward accepting the obligations of Article VIII, Sections 2(a), 3, and 4, of the IMF’s Articles of Agreement. We have worked with IMF staff to complete the review of exchange laws and regulations and are considering measures to remove the identified exchange restrictions on current international transactions. We remain 39 committed to avoid imposing any restrictions on the making of payments and transfers for current international transactions or introducing any multiple currency practices. 15. We will continue our efforts to resolve outstanding external claims under terms that are consistent with the 2004 Paris Club agreement. Bilateral agreements with thirteen non- Paris Club official creditors have already been signed and are being implemented. Regarding private creditors, most of the commercial debt has been restructured and is serviced as agreed. We also are close to finalizing an agreement with the United States government to settle claims of private US citizens and the Oil-for-Food program has been brought to a close. We expect that the proceeds of the liquidation of the London branch of Rafidain bank will be distributed shortly. 16. Recognizing that the Ministry of Finance and the Central Bank of Iraq have exclusive responsibility for settling Saddam era claims against Iraqi public sector obligors, the Ministry of Finance and the CBI shall appoint a reputable international law firm to perform the following tasks including: monitor the filing of lawsuits in foreign courts against Iraqi defendants seeking recovery of Saddam era claims or the enforcement against Iraqi assets of outstanding court judgments or arbitral awards rendered in respect of such claims; recommend the appointment of competent local counsel to defend such actions in the relevant jurisdictions; coordinate and supervise the activities of such local counsel; act as a central source for information on litigation defenses and strategies in these cases and make this information available to local counsel defending the actions; report regularly to the Ministry of Finance and the CBI on the status of these matters. 17. We will also continue our efforts to improve Iraq’s statistical database. We have recently updated the weights used for calculating the consumer price index using more recent household survey data. Efforts for further improvement will focus especially on government finance statistics, balance of payments statistics, and the sectoral classification in the monetary statistics. Lots of Blah Blah Blah ... but it does say REVALUE...! Link to comment Share on other sites More sharing options...
TheUnspoken Posted June 3, 2011 Report Share Posted June 3, 2011 It only said revalue in there once and that they wanted to have it done by end-June 2011. I am with a few others, it doesn't make sense that it says Foreign Currency. It doesn't make sense that they could revalue anyone else's currency unless they were about to revalue their own to do so. I could see how you could read between the lines here. 1 Link to comment Share on other sites More sharing options...
NWGUY Posted June 3, 2011 Report Share Posted June 3, 2011 Thank all of you for the information!!! I am feeling very good about this RVing in the month of June!!! I think Iraq will get their government officially formed soon, and the Dinar value is heading way "North" of where we are now. It is all good, and we are sitting on the edge of financial history! GO RV!! Link to comment Share on other sites More sharing options...
R Veyron Posted June 3, 2011 Report Share Posted June 3, 2011 Like my Grandfather always used to say "Strike while the iron is hot", and the iron is very hot. Link to comment Share on other sites More sharing options...
FatMan Posted June 3, 2011 Report Share Posted June 3, 2011 What a great post. Very well Presented!! I Like the way it was all tied together. I think they DID Leak some real info! Thank you for finding and sharing it with us! Anyone who can't see the GOOD in this post, Read it again... Click on the links and have an Opened mind. Gut Tells me this is right on, Krem Link to comment Share on other sites More sharing options...
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