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Estamated Rate?


Zemaduvant
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The Exchange Rate of Foreign Currency in Economic Feasibility Studies

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 re-appreciation by the competent authorities.

Edited by speculatorsRIDE
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Ok so if my math is correct this is what I get when they raise the 3 zeros. Now the rate is 1170.000 x 1usd per CBI now remove the zeros and 1.170 x 1usd. That's 0.83usd x 1iqd

I WILL TAKE THAT!!!!

Edited by brenman8
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Ok so if my math is correct this is what I get when they raise the 3 zeros. Now the rate is 1170.000 x 1usd per CBI now remove the zeros and 1.170 x 1usd. That's 0.83usd x 1iqd

I WILL TAKE THAT!!!!

Argh. Not very good at math, huh? English was your preference?

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Quickest way to a 1.13 without changing your monetary policy to ughh were going to back this currency with nothing but a promise (like the u.s.)

is to cut that Money supply (bye bye millions)

LOP

And with the excellent security and economy they currently have oh yeah they got that RV in the bag.... :rolleyes:

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Quickest way to a 1.13 without changing your monetary policy to ughh were going to back this currency with nothing but a promise (like the u.s.)

is to cut that Money supply (bye bye millions)

LOP

And with the excellent security and economy they currently have oh yeah they got that RV in the bag.... :rolleyes:

Negatives? It sounds like sarcasm to me ... why negatives? Hmmmmm

;)

smee2

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Quickest way to a 1.13 without changing your monetary policy to ughh were going to back this currency with nothing but a promise (like the u.s.)

is to cut that Money supply (bye bye millions)

LOP

And with the excellent security and economy they currently have oh yeah they got that RV in the bag.... :rolleyes:

Un-like Americans no iraqi is 300% upside down in a house note or 100% up-side down in a car note and their GDP is balanced with what they project to spend un-like america that is 50%up-side down with there GDP and growing they can support any amount they want and pay it off in 1 year

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1. It is necessary to put central controls to amend the official exchange rate * to reflect the shadow price of the foreign currency,

Read more:

And what is the "foreign" currency in Iraq??? Sounds like a 1 to 1 exchange rate. The dollar is the preferred currency right now. The only way they will become a one currency nation is to do a 1 to 1 rv. Lop my arse. Okay, just for you lopheads, reserves at 60 plus billion right now. Add a few billion from the DFI, say 20, giving you the benefit of a doubt. Then, as per IMF, monetize assets.....oops. Looks like they can supprt not only a 1 to 1 straight rv, but maybe even a 3.22 to 1. You do the research. You do the math. I've already done it. Or you can slurp up the scraps from some wannabe researcher who Keeps you in the dark.

DUDE

That 60 billion dollars in reserves to back HOW MANY TRILLIONS OF DINAR? WHAT IS THE REPORTED M1 or M2 for IRAQ?!?!?? Wait, whats the exchange rate for the iraqi dinar again? :lol: :lol: :lol: :lol: I don't care that someone pulled 25 or 15trillion out of their hiney talkin a whole bunch of BS....ITS MORE THAN THAT! YOU SHOW ME DOCUMENTATION

go to cbi.iq, click on statistics and then key financials....thats what they report..."OH THEY ARE NOT BEING HONEST, THEY ARE LIEING...ugh ughh ughh..." Whatever! Thats the info we have or allowed to have.

YOU DO THE RESEARCH!

And while your at it cruise around to every central bank in the middle east website and compare their M1/M2/reserves to Iraq.....1000 times difference from 1 dinar to be 1 dollar without CUTTING THE MONEY SUPPLY (OUR MILLIONS)

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Everyone is different, but we are sitting good at a dime. At 3 dimes per Dinar someone will have to throw water on me to wake me up.

At .86 to a Dinar someone will need smelling salts or have to wait a long time for me to get up! :) :) :)

I truly believe in the range of .23 to 1.17 so who every wants to throw the water, please be ready! :D

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