Thread: Iraq/Dinar News Before Febuary 12th, 2006

Do you have the link to this article? Thank you.

Originally Posted by kiko

Here is article from budget at 1260 + $ 0.50 oil, was asked for it!

Strike expected increase dinar rate

Originally Posted by AlwaysDreaming

WmKnowles: I have not seen the CBI fail to cover bids before. I would value your opinion on this.
Thanks

Iraq-Currency Bank fails to cover bids for dollar in Iraqi auction-trader By Dergham Mohammed Ali Baghdad, Feb 12, (VOI) - Dollar demand was sharply lower on Monday in the central bank daily auction to $33.380 million compared to $63.200 million on Sunday as the bank failed to cover bids for dollar. In its daily statement on Monday the bank said it only covered bids which were $33.365 million in cash at an exchange rate of 1,288 dinars per dollar, unchanged from Tuesday. The bank said in the statement it failed to cover bids for $15,000 in today's session. Fifteen banks participated in Monday's auction and none offered to sell dollar. Ali al-Yaseri, a trader at the auction, blamed the decline in today's demand for dollar for what he described as "the central bank's failure to cover bids made in the daily auction for dollar."

Hello everyone. I agree, this is unusal and trying to respond places me on thin ice. But here goes. All in good faith. "fails to cover bids for the dollar".
My impression is that the CBI only wanted to spend a certain amount (i.e. 1288) for the dinar today. Failing to cover the bids might imply that bids for the dollar were more expensive than the CBI wanted to spend. Maybe some of the banks wanted a better rate and the CBI just wasn't going to pay up. I am sure willing to listen to anyone else who might have a opinion. But keep in mind that several of the iraqi banks are private and therefore might see the auction as more within a free economic view than the state banks. IMHO. Thank You.

Originally Posted by Wm.Knowles

Hello everyone. I agree, this is unusal and trying to respond places me on thin ice. But here goes. All in good faith. "fails to cover bids for the dollar".
My impression is that the CBI only wanted to spend a certain amount (i.e. 1288) for the dinar today. Failing to cover the bids might imply that bids for the dollar were more expensive than the CBI wanted to spend. Maybe some of the banks wanted a better rate and the CBI just wasn't going to pay up. I am sure willing to listen to anyone else who might have a opinion. But keep in mind that several of the iraqi banks are private and therefore might see the auction as more within a free economic view than the state banks. IMHO. Thank You.

I would like to add an additional thought. Some speculation in an implied question. What if the banks begin to demand a better rate than the CBI is quoting? This adds another "pressure" on the exchange rate, and if true, certainly works for us. Any Comments? Thank You.

(Media-Newswire.com) - Washington -- Days into the implementation of a new security plan, a senior U.S military official said Iraqi forces are meeting their commitments amidst signs of early progress toward breaking the cycle of sectarian violence in Iraq?s capital.

Besides the arrival of a brigade of additional Iraqi troops to reinforce security in Baghdad, Army Lieutenant General Douglas Lute cited other positive evidence like the creation of a single unified chain of command for all Iraq?s army and police forces and the establishment of new Iraqi-U.S. neighborhood security stations that will provide a round-the-clock presence. Speaking to reporters at the Pentagon February 9, he said 10 joint security stations are in place and plans are to triple that number.

Mark Kimmitt, deputy assistant secretary of defense for the Middle East, who briefed with Lute, said additional U.S. military and civilian assets are being dedicated to the mission to quell the violence so the Iraqi government can concentrate on political and economic development. Assets and resources, including boosting the number of provincial reconstruction teams, are focused on ensuring success, he said.


?We are provisioned and resourced sufficiently with both physical resources and support from the Maliki government to move forward with the plan,? Kimmitt said. Once the violence abates, the government can deal with unresolved issues like political reconciliation, amnesty, pressing budget needs and passing hydrocarbon legislation, he added.
Media-Newswire.com - Press Release Distribution - PR Agency

Originally Posted by Wm.Knowles

Hello everyone. I agree, this is unusal and trying to respond places me on thin ice. But here goes. All in good faith. "fails to cover bids for the dollar".
My impression is that the CBI only wanted to spend a certain amount (i.e. 1288) for the dinar today. Failing to cover the bids might imply that bids for the dollar were more expensive than the CBI wanted to spend. Maybe some of the banks wanted a better rate and the CBI just wasn't going to pay up. I am sure willing to listen to anyone else who might have a opinion. But keep in mind that several of the iraqi banks are private and therefore might see the auction as more within a free economic view than the state banks. IMHO. Thank You.

Let me see if I am understanding this...from what I can tell, you are speculating and I can understand the caution....so I will use caution in my question...

Are you saying in your statement that one theory could be that the private banks may be perceiving a different/higher value than what CBI is asking?

I know this would only be a speculative theory.

Originally Posted by Wm.Knowles

I would like to add an additional thought. Some speculation in an implied question. What if the banks begin to demand a better rate than the CBI is quoting? This adds another "pressure" on the exchange rate, and if true, certainly works for us. Any Comments? Thank You.

Ok, now my question is answered.

Originally Posted by Inscrutable

Do you have the link to this article? Thank you.

here you go:

AlSharqiya TV

Originally Posted by Maddawg

Great Find Kiko! This should put a smile on some faces. I know it did mine. Keep up the Great Investigative Work

dought it, we would have heard something by now

Originally Posted by noced71

Let me see if I am understanding this...from what I can tell, you are speculating and I can understand the caution....so I will use caution in my question...

Are you saying in your statement that one theory could be that the private banks may be perceiving a different/higher value than what CBI is asking?

I know this would only be a speculative theory.

Yes. It is speculation, but some of the banks may begin to demand a "better deal". A dimension of the problem that we have not thought or discussed before, but an interesting one. If we continue to see "failed to cover bids" in the next auctions, we may build a basis for this. Thank You.

Originally Posted by kiko

here you go:

AlSharqiya TV

Here's also an interesting point, If you apply the Frankel theory ie 1/3 USD, 1/3 EURO, 1/100 price of a barrel of oil [Following the 50 dollar oil and fractional percentages rounded down all figures USD]

you end up with:

.43 EURO
.33 USD
.50 OIL

1.260

Things that make you go Hmmmmm....