Thread: Iraq/Dinar News until 5/23/07 Midnight CST

UAE may revalue its currency following drop in dinar peg to dollar.



Chances of UAE revaluing its currency increase
By Babu Das Augustine, Banking Editor

Dubai: Kuwait's decision to peg its currency to a basket of currencies instead of the dollar has increased the chances that the UAE will revalue the dirham, economists and currency analysts said yesterday.
"We see a 25 per cent chance of the UAE revaluing its currency by the end of this year. Kuwait's decision to drop the dinar's peg to the dollar will put pressure on the UAE and other Gulf countries to revalue their currencies, but we see the UAE as the most likely candidate," said Steve Brice, an economist with Standard Chartered Bank.
Due to the growing frustration over the declining value of the dinar and the pressure of imported inflation, there was strong speculation that Kuwait would revalue the dinar. However, the change in the peg was least expected.
"The move towards an independent monetary policy would be tempting for many Gulf central banks, but I would still be surprised if we see any [other] Gulf country changing the value of its currency or nature of its peg," said Simon Williams, an economist with HSBC Middle East.
Although the UAE Central Bank did not officially comment on Kuwait's decision, central bank governors from across the region said Kuwait's move would not have any impact on currency pegs in other Gulf countries.
"Our position is clear, there is no change," Rash-eed Al Maraj, Bahrain's governor, said.
"In light of the change in the Kuwaiti dinar's exchange rate, the bank reaffirms that there is no intention to change the exchange rate of the riyal," Saudi governor Hamad Saud Al Sayyari said.
Before shifting to a currency peg against the dollar in January 2003, Kuwait managed its exchange rate on a trade-weighted basis. This model still holds some sway at the central bank.
In 2003, Kuwait allowed its dinar to trade in a 3.5 per cent band around the reference rate of 0.29963 per dollar. It revalued the currency in May 2006, allowing a 1 per cent appreciation against the dollar.
"The goal of the adjustment is clearly to fight imported inflation. However, the basket is expected to be dollar heavy. The nature of the basket can be judged only after we see how the currency moves in the next few days," said Williams.
"If the target is imported inflation, Kuwait should opt for an import-weighted index to benchmark its currency. In the import-weighted index dollar has a weightage of less than 30 per cent while in a trade-weighted index, the dollar still holds a weightage of more than 70 per cent," said Brice.

Iraq's Kurdistan opens its arms to Gulf investors
Gulfnews: Iraq's Kurdistan opens its arms to Gulf investors

05/20/2007 11:16 PM | By Mayada Al Askari, Staff Reporter
This is not Switzerland. But in its most enchanting spirit, high up in the Iraqi clouds and skies, is the Kurdistan province in Iraq. It has witnessed so much pain and misery throughout its history, we actually applaud its perfect beauty today.
With stability, peace and a willingness to develop the area, the Kurdish Regional Government put down the Kurdish Regional Investment Law No 4, which was issued in mid-2006.
According to Eamad Jamil Mazouri, the Kurdish Regional Government's General Representative to the UAE, the process to attract investment to Kurdistan started as early as 1992.
"When the Kurdish Parliament elections took place in 1992, we started building our regional state's establishments, we decided to tread the road of free enterprise as opposed to so******m, which did not work in Iraq as a whole. We also had to mend our devastated infrastructure," he told Gulf News.
According to Mazouri, when Nechirvan Barzani became prime minister in 1998, he introduced a whole new vision.
"He was highly interested in Dubai as a superb model of a dynamic fast-growing metropolis," Mazouri said.
After the end of Saddam Hussain's regime, Iraq voted on the constitution that approved a federal model for Iraq. In 2005, the Kurdish region constitution was issued.
Growing interest
The recent months have witnessed a growing interest in Kurdistan. In a recent economic conference in the UAE, a number of Gulf investors expressed their interest in energy supply, road and water projects, Mazouri said.
"We have actually finalised some contracts [with UAE entity] such as Dana Gas, Sharjah, which signed agreements with the Kurdistan Regional Government to study gas development and utilisation potential in Iraqi Kurdistan," he said.
The total cost of the project is $400 million.
Dana Gas and its Crescent Petroleum affiliate will launch an industrial gas complex concept called "Kurdistan Gas City", designed to promote private sector investment and employment.
Under a separate service contract, Dana Gas will develop, process and transport gas from the Khor Mor field on a fast-track basis. Dana Gas will also appraise Chemchemal gas field, which is needed to supply power plants under construction near the cities of Erbil and Suleymania, by January 2008.
The Kurdish regional government may also establish a free zone to attract more investments.
"The free zone will be established close to the Kurdish-Turkish borders in Zakho" Mazouri said.
A new $300 million airport is being built in the city of Erbil, which will be able to handle the biggest aircraft in the world, including the Russian Antonov 225 cargo plane and the American C-5 Galaxy.
The airport's new runway 18/36 will be one of the longest in the world at 4,800 metres.
Additionally, the Iraqi Kurdish regional government and a Dubai firm are also to build a $400 million "Media City" in Erbil.
Under the deal to create the Erbil City Media Company, the regional government will have a 60 per cent stake and a Dubai-based TV and cinema production company will hold the remaining 40 per cent. Six satellite television stations currently air from Kurdistan, which is home to hundreds of foreign companies, including 400 Turkish ones. This project is to see light in two years' time.
Specific draft
The Kurdistan Company for Real Estate Development presented the specifications draft for the construction of a mall in Kurdistan valued at $120 million and on an area of 104,000 square metres; it is expected to be completed within four years.
According to the plan proposed, the mall will include a hotel, a commercial offices complex, big retail market, large shopping centre, three buildings of residential apartments and a recreational area.
Kurdistan and the rest of Iraq have become even more dramatic. The plains around Erbil are the location for luxury housing developments. They have names like the British Village, which resembles a gated-California suburb, and the Dream City, which will have a conference centre, supermarket and a American-style school.
The Turkish developers of Naz City, a high-rise condominium complex, are trying to sell house-proud Kurds on modern apartment living. An American company is planning to build Iraq's first ski resort in the mountains near the Turkish and Iranian borders.
Mazouri was optimistic about the future. "The new policy has opened great opportunities for Kurdistan Al Iraq. We will soon see a tourist destination open to all the people in the area, a prosperous entity with open arms for all," he said with a smile.

والسيIraq will soon be a breakthrough in the political and security files
الملف File
Sunday, 20 May 2007Sunday, 20 May 2007
علمAware of the file from important sources refused to be identified, that the Iraqi arena will witness during the next few days relaxation militarily and politically significant impact reached Talks between the government and armed forces to significant results at the level of containment of the Sunni militia, and at the level of synergies between the political parties Sunni and Shiite participation in the political process


sources explained that the joint declaration formally put either m media expression of reaching agreements included a wider participation of the forces in Sunni circles and state institutions, and drafting of decisions affecting Iraq


.On the other hand, the trend related to the same sources confirmed that the meeting scheduled on the 28th of this month between the Iranian and American sides will yield good results in curbing the violence in Iraq, these sources - pointing - that penetrated the groundwork for this meeting has been completed in a matter of much optimism.

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Description of Industry and Minerals Minister Fawzi Hariri Francois the Iraq reconstruction conference, which was held recently in Amman as a demonstration for expanded economic inform global companies and businessmen and investors on the opportunities for work in IraqIncluding an attempt to attract capital through Iraqi immigrant sustain communication and the exchange of ideas and promote common convictions that contribute to the renaissance of the Iraqi industrial sector and its development in order to ensure the rights associated institutions in which to invest, and promote stability and safety of those funds

Minister Hariri said in a press conference held in Amman, that those interested in investing in Iraq should not wait for the security situation to the appropriate hire their capital in productive projects, as this will lessen the chances of Iraq. and who wants to enter the real work begins now directly or through companies or representatives in Iraq, especially in light of the existence of several provinces enjoy a stable security, stressing the need of industrial companies Iraqi pressing for liquidity and funding for the rehabilitation and economic reform to adapt to the new environment they face.

In light of this reality comes the role of global companies and investors to integrate possibilities, in accordance with the principle of mutual benefits in the construction industry, which relies new Iraqi competitiveness and sustainable development of an important contribution to the diversification of the Iraqi economy-oil adding that the ministry, and after that announced the 11 files investment in important industries, the end of last March, is preparing to put a second end of June and the end of September third and fourth at the end of the year 2007 in the framework of joint cooperation aims to develop the product and service associate in the corporate and governorates, which are also sites for these companies, and Iraq in general
وزير الصناعة يدعو الشركات العربية والعالمية للاستثمار �ي العراق

The paper sets priorities reconstruction, development and economic reforms in Iraq

The Federation of Iraqi businessmen summary of a paper to the International Conference recently held in Sharm el-Sheikh under the heading "issues of reconstruction and development and economic reforms in Iraq." reviewed by which the nature of the circumstances that confronted Iraq over four decades of the rule of totalitarian regimes and of the negative consequences that faced the Iraqi economy, a result of wars and the siege and misguided economic policies and the growing dominance of segments and categories parasitic and marginal economic life, and looting the country's wealth and resources, It also touched upon the post-war circumstances and the recent change peroxide and the events that followed, including suffered from the ravages and destruction of infrastructure and economic projects, productivity and service, and the measures and procedures inept and rash adopted by the interim civil administration of the occupation and its contribution to the deterioration of the economic and social deterioration, and the unstable political environment and security in the country so that it is imperative to establish a new democratic, pluralistic rule is based on a gradual shift toward economy The market in the part of a national strategy for development and economic reforms, the central, and take the course executive is not centrally and very flexible, and are strongly dependent binding and institutional formula and comprehensive mobilization of the potential and human resources, material and technicaland the extensive participation of government and private sectors and experts and spe******ts.

و.And research paper identified a set of fundamental principles that should be made in the Account, including weighted to give priority to development issues and economic reforms without which they can not provide the political environment and stable security, as well as to reconsider the laws and regulations and instructions inherited from the former regime. also, the legal legacy of the interim civil administration of the occupation in order to create an integrated legal conform with the requirements of development, and, through the formation of a supreme council to address this task, and the trend towards determining the nature of the economic system adopted by the country's very clear and very accurate to overcome jurisprudence and ensure harmony and coherence of all efforts, activities and events and the measures and procedures in one direction, and work to overcome all the laws, regulations and administrative instructions and behaviors mouthpiece of the marginalized and ignored, and the exclusion of the private sector, in addition to indexing sound policies about the major issues in the economic, social, , including finance, investment and banking system, and privatization of industry, agriculture, tourism and construction, reconstruction, and poverty and unemployment, as well as the problems and crises of housing and services, and ways of activating economic sectors, productivity and service. .The paper identified the research highlighted the tendency to try to achieve these goals presented in future.


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Announcement No.(928)

D.G. of Foreign Exchange Control

The 928 daily currency auction was held in the Central Bank of Iraq day Monday 2007/5/21 so the results were as follows :

Details Notes
Number of banks 16 -----
Auction price selling dinar / US $ 1260 -----
Auction price buying dinar / US $ ------ -----
Amount sold at auction price (US $) 37.965.000 -----
Amount purchased at Auction price (US $) ------
Total offers for buying (US $) 37.965.000 -----
Total offers for selling (US $) ------ -----

Still 1260? mmm wonder how long they will hold this rate...do i smell something?!

Originally Posted by JudasPriest

Still 1260? mmm wonder how long they will hold this rate...do i smell something?!

Sorry, that might be me............beans on toast you know

Steve

theres no notice on the site about it being held steady like the last couple of times they posted a note to that effect then didnt chage it for a period.

2 days - same rate, todays is a low number as well.

too early to tell yet, but if we see three auctions in a row under 50, its definately drying up.

that and no rate change as well, for a week, definatelty we must be close.

let it be revealed!

Originally Posted by Stevethebrit

Sorry, that might be me............beans on toast you know

Steve

Thanks for that gross thought!