{"id":15140,"date":"2018-02-27T11:37:06","date_gmt":"2018-02-27T17:37:06","guid":{"rendered":"http:\/\/www.dinarupdates.com\/observer\/?p=15140"},"modified":"2018-02-28T10:47:16","modified_gmt":"2018-02-28T16:47:16","slug":"dinar-observer-daily-feb-27th-2","status":"publish","type":"post","link":"https:\/\/dinarupdates.com\/observer\/?p=15140","title":{"rendered":"DINAR OBSERVER DAILY \u2013 Feb. 27th"},"content":{"rendered":"

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The stability of the dollar exchange rate against the Iraqi dinar<\/strong><\/span><\/h1>\n

(Independent) …<\/strong> The prices of the dollar exchange rate stabilized on the Stock Exchange and local markets on Tuesday (February 27, 2018).<\/p>\n

Kifah Stock Exchange – Baghdad 122,000 dinars, the same price for Monday.<\/p>\n

Selling and buying prices in banking shops:<\/p>\n

Selling price of the dollar = 122,500 dinars.<\/p>\n

The price of buying the dollar = 121.500 dinars.<\/p>\n

Article Credit: mustaqila.com<\/a><\/strong><\/em><\/p>\n

BGG ~ This was from yesterday… I haven’t seen anything further on the OR\/MR parity yet today (it’s what I’ll be watching close for a few days).<\/em><\/span><\/h2>\n

It’s is basically saying that after a few days of gains – the value of the Dinar has stabilized for now.<\/em><\/span><\/h2>\n

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Kaperoni (Dinar Guru) –<\/span>\u00a0<\/strong>\u00a0…Banks don\u2019t want to lose money<\/u>.\u00a0 They want to know what the spread is from day to day.\u00a0 They want to know how much it\u2019s going up and how much it\u2019s going down and so on<\/strong>\u2026this has always been an issue since I\u2019ve been in this investment.\u00a0 The Central Bank had to reduce the spread\u2026Shabibi actually did a wonderful job.<\/strong>\u00a0\u00a0He lowered the spread within the conditions set forth in their article IV consultations.\u00a0\u00a0He got it down to 1200 or so on the street and held it there for 10 months<\/u>.\u00a0 In September of 2012 he announced he was going to begin currency reform so we assumed he was going to Article VIII at that point.\u00a0<\/strong>\u00a0Then of course PM Maliki at the time said No, we\u2019re not ready.\u00a0 We don\u2019t want this to occur\u2026When Shabibi was out of the country for a conference Maliki put out a warrant for his arrest.\u00a0\u00a0Which in essence kept him out of the country and stopped the process in it\u2019s tracks.<\/u><\/strong>
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Kaperoni (Dinar Guru) –<\/span>\u00a0 …The market rate is in essence the rate on the street<\/u>\u2026the dinar is a little weaker than the actual value from the CBI which is pegged to the US dollar which is part of Article 14<\/strong>.\u00a0 In order to meet the stipulations of IMF Article VIII you [Iraq]\u00a0need to simplify your foreign exchange and reduce the market rate spread which is the spread on the street\u2026The rest of the world\u2019s banking system for the most part is in Article VIII\u2026they have expertise in managing their currency and meet the conditions.<\/u><\/strong>\u00a0 This is important because if you\u2019re ever going to accept article VIII and make the dinar internationally convertible you need to maintain that exchange rate for international transactions…
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Kaperoni\u00a0(Dinar Guru) –<\/span><\/strong>\u00a0 …IMF:\u00a0\u00a0\u00a0“Although performance under the Stand-By Arrangement has been weak in some key areas, understandings on sufficient corrective actions have been reached to keep the program on track. Against this background,\u00a0Directors encouraged resolute implementation of the authorities\u2019 program including continued efforts toward fiscal consolidation, strengthening the financial sector, and implementing structural reforms to promote private sector activity and improve the business environment.<\/u>”\u00a0\u00a0\u00a0<\/em>Very key…That is about as stern as I have ever seen from the IMF.<\/u>\u00a0\u00a0 I just think were in a good place finally.\u00a0With the help of the UST and IMF it looks like they got a plan to reduce the spread.\u00a0\u00a0And with at 1220 now we are only 7 dinars away from 2%. \u00a0So by end of week maybe.<\/u>\u00a0\u00a0Can they hold it<\/em>?\u00a0Well I think there is to much riding on it to not to<\/u>.<\/strong>
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Nusseiri: The implementation of the strategy of the Central Bank contributed to the improvement of the dinar exchange rate against the dollar<\/strong><\/span><\/h1>\n

Economy News _ Baghdad –<\/strong> The economic and banking adviser to the Association of Iraqi Private Banks Samir Nusairi, said that the central bank and the banking sector played a key role in overcoming the economic and financial crisis, and support the state treasury and methods and procedures and new instruments in the applications of monetary policy.<\/p>\n

Al-Nusairi said in an interview with “Economy News” that “the Central Bank has worked mainly on combating money laundering and financing of terrorism, strict adherence to international regulations, rules and standards, re-evaluation and classification of banks in light of their compliance with compliance regulations and determining the last beneficiary in the window of sale of foreign currency and work mechanisms New in the proactive control internally and externally led to higher value and purchasing power of the Iraqi dinar against the dollar exchange rate, “noting that” the most prominent reasons for the recovery of the Iraqi dinar is the plan and procedures of the Central Bank and cooperation with the banking sector and the commitment to Died and standards issued by the Central Bank. ”<\/p>\n

“The Iraqi banking sector is the first major link in the economic circles of Iraq and occupies a fundamental and important aspect as the financial and investment sector, which is the main part of the financing and management of economies.”…<\/p>\n

Read Full Text:\u00a0http:\/\/www.dinarupdates.com\/showthread.php?56381-The-implementation-of-the-strategy-of-the-CBI-contributed-to-the-Dinar-improvement<\/a><\/em><\/strong><\/p>\n

(Special Thanks to Vernell)<\/strong>
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Kaperoni (Dinar Guru) –<\/span><\/strong>\u00a0 \u00a0From the IMF last Sept…\u00a0 “25. The government will gradually remove remaining exchange restrictions and a multiple currency practice (MCP) with a view to eliminating exchange rate distortions.Such a move towards acceptance of the obligations under Article VIII of the IMF\u2019s Articles of Agreement will send a positive signal to the investor community that Iraq is committed to maintain an exchange system that is free of MCPs and restrictions for current international transactions and thus facilitate creation of a favorable business climate<\/u>.<\/em>”\u00a0\u00a0\u00a0So it’s coming. \u00a0That should perpetuate a new exchange rate regime as well causing the dinar to rise<\/u>.\u00a0 …I believe once it starts, it won’t take more than a year to rise to a value we are comfortable with<\/u>.<\/strong>
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Enorrste (Dinar Guru) –<\/span><\/strong>\u00a0<\/span>\u00a0\u00a0…Once the ball starts rolling it will proceed quickly to a value that we can all enjoy<\/strong>.\u00a0\u00a0The simple fact is that there are now a vast majority of factors in our favor versus the few left that seem to be holding this back.<\/u>\u00a0<\/strong>\u00a0ISIS is decimated in Iraq;\u00a0the banking structure is becoming more internationally connected;\u00a0<\/u>interest in investing has risen even if actual investment has not yet begun;\u00a0the CBI has finally tackled the problem with the spread (this is really key)<\/strong>;\u00a0<\/u>the CBI is officially on the record now for some time to move toward a floating currency;\u00a0talk of ending the auctions has risen to the point that it will become a reality soon;<\/strong>\u00a0<\/u>the IMF is trustee over the CBI and is on record to move Iraq into the real world; etc.\u00a0\u00a0I will be surprised if we don’t see the float begin sometime this year.<\/strong><\/u>
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Kaperoni (Dinar Guru) –<\/span><\/strong>\u00a0<\/span>\u00a0Article:\u00a0 “A new drop for the dollar today in Iraq<\/em>”\u00a0 \u00a0Quote:\u00a0\u00a0 “The exchange rate of the US dollar against the Iraqi dinar continues to decline for the second month in a row<\/strong><\/u>.\u00a0 The foreign exchange markets in Baghdad, on Monday morning, the decline in the dollar exchange rate against the Iraqi dinar. The market price in the Kifah Stock Exchange in Baghdad was\u00a01220 dinars per dollar<\/u><\/span><\/strong>, or 122 thousand dinars for one hundred dollars<\/em>.”\u00a0\u00a0…All we can do is wait and see each day what they report for the auction.\u00a0\u00a01220 is close…let’s give it another week and see if they are in compliance.<\/strong><\/u>
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BGG Q & A:<\/span><\/h1>\n

Q:<\/strong> What is this 90 day 2 % everyone talking about has it started and does it mean we have to have 2 % for 90 days before a rv ?<\/em><\/h3>\n

A:<\/strong> If I recall correctly, the “IMF 2% rule” refers to the spread between the Official rate and Market rate of the currency on any given day.<\/h3>\n

The rule is, basically – they must maintain this 2% (or less) gap for at least 90 days prior to accepting IMF Article 8 general obligations (as a member country) and concurrently from then on. Now – would the IMF allow them some latitude on the 90 day entry point? Possibly.<\/h3>\n

However, the real issue everyone is stewing over is this…<\/h3>\n

Does this recent closing of the gap between the “Official rate” and “Market rate” forecast some coming change or is it much ado about nothing?<\/h3>\n

There are articles regularly touting the tightening of this gap… or the “Strengthening of the Dinar against the Dollar” or some other various titles along those same lines. Ask yourself why? Because they know what it means.<\/h3>\n

Whichever side of the fence you are on here, this tightening of the OR\/MR gap is the single most visible, interesting and encouraging “data point” we’ve seen in a very, very long time…<\/h3>\n

Read More:\u00a0http:\/\/www.dinarupdates.com\/blog\/<\/a><\/strong><\/em>
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Kaperoni (Dinar Guru) –<\/span><\/strong>\u00a0\u00a0<\/span>\u00a0Article: “Alnasiri: Implementation of the Central Bank’s strategy contributed to the improvement of the dinar’s exchange rate against the dollar<\/em>”\u00a0\u00a0They had a few months with the UST and IMF to figure out a plan to reduce the spread.\u00a0\u00a0It seems likely they are on track to compliance<\/u>. We all know the investment won’t come if they do not get the market economy going.<\/strong>\u00a0 Time is running out.
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Kaperoni (Dinar Guru) –<\/span>\u00a0<\/strong>\u00a0…We need to see the spread (the official rate to the market rate) go down within 2%.\u00a0 When it\u2019s within 2% then they are within compliance.<\/strong>\u00a0 Then it puts them into a position to accept the conditions of article VIII and launch their currency internationally. \u00a0\u00a0And more importantly exit the peg that they are on and go to some kind of float.\u00a0 Which would let the world set the exchange rate based on supply and demand<\/u><\/strong>\u2026They need to be in compliance for 90 days<\/u>\u2026They might get an exception from that simply because Iraq is in dire consequences.\u00a0 The recent war.\u00a0 You have a lot of unemployed people\u2026There is a certain amount of expedience needed in Iraq so therefor they may give them an exception.\u00a0 Maybe not and the IMF is going to hold them to a full 90 days of compliance.\u00a0 If they get in compliance in the next week it creates a window in March and the end of May which would be the 90 days\u00a0where Iraq could accept Article VIII and begin it\u2019s transition to engage with the world financial system.\u00a0 That is the step we want to see occur.\u00a0<\/u><\/strong>
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mike (Dinar Guru) –<\/span><\/strong>\u00a0\u00a0 Article:\u00a0 “Kurdistan Alliance confirms the continuation of the boycott budget<\/em>”\u00a0\u00a0\u00a0Why are they stalling<\/em>?\u00a0They want 17%, if Iraq’s political leadership would just take a peek at the Iraqi Constitution, it clearly states the Kurd’s are to receive 17% of Iraq’s budget, outside of sovereign responsibilities<\/strong>…They don’t need to re-invent the wheel, just follow the legal and constitutional requirements of Iraq’s existing laws and pay the Kurd’s their 17%…\u00a0after a while, they’re going to say enough is enough and make another mess that takes three years and billions of dollars to correct.
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