Thread: Iraq/Dinar News. 09/05 to 01/14/07

[QUOTE="GK";136653]As of October 19, the total IQD in circulation is 14.3T. 4.8T are in banks and 9.5T outside of banks. It's probably much smaller now since the CBI has been on a massive USD auction spree. My take on this, is they're reducing the amount of currency in circulation in preparation for a significant reval. They're reducing the amount in circulation to curb possible inflationary phenomenon that may occur because of the significant increase in exchange rate. Not because of the bogus idea of the need to back the currency in circulation with reserves just to reval. Too much currency at a higher exchange rate chasing the same goods will surely result in increased inflationary conditions.[/QUOTE]
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i concur.[/SIZE][/B]

Originally Posted by "GK"

Apollo, the gradual revaluation of the IQD has begun since September. What we're waiting on is when the big leap will be. Lots of events have taken place that points to a major adjustment of the IQD's exchange rate. Events that seem so disconnected with Iraq, but look closely and you'll see that the these events are directly linked. It's all good.

Yes, but the exchange rate has never jumped (in recent months), while at the same time the auction amounts been so high. This is a first for both of those.

110 million on the 13th? Of course this was the same day that the CBI had their press statement. And of course they increased the rate, which gave several banks in the auction a pretty good day.

You are right that the smallest thing could set the ball in motion, and by all of the news of late, it would appear that this is exactly what is happening.

I do believe that there will be a big leap. This should go hand in hand with "open market conditions". I just wonder if that leap needs to happen before the EU meetings on Monday?

I certainly think that Iraq needs to have a value set before they go into those meetings, however, is it possible that if nothing is done by Monday, that during those meetings any monitary amount discussed would be done in the USD or Euro?

Thanks,

Dan

Originally Posted by _Apollo_

Yes, but the exchange rate has never jumped (in recent months), while at the same time the auction amounts been so high. This is a first for both of those.

110 million on the 13th? Of course this was the same day that the CBI had their press statement. And of course they increased the rate, which gave several banks in the auction a pretty good day.

You are right that the smallest thing could set the ball in motion, and by all of the news of late, it would appear that this is exactly what is happening.

I do believe that there will be a big leap. This should go hand in hand with "open market conditions". I just wonder if that leap needs to happen before the EU meetings on Monday?

I certainly think that Iraq needs to have a value set before they go into those meetings, however, is it possible that if nothing is done by Monday, that during those meetings any monitary amount discussed would be done in the USD or Euro?

Thanks,

Dan

They're already at the second and final phase. There are only two options for the IQD I'm looking at. Maintain the USD peg or peg to the SDR. The first is status quo, the latter, the rest of the big dogs are much happier. I believe the latter will prevail. Others are already talking of joining this bandwagon. We'll see soon enough.

Originally Posted by "GK"

They're already at the second and final phase. There are only two options for the IQD I'm looking at. Maintain the USD peg or peg to the SDR. The first is status quo, the latter, the rest of the big dogs are much happier. I believe the latter will prevail. Others are already talking of joining this bandwagon. We'll see soon enough.

This, I believe, is why the GCC currency union will not come to fruition. It's already breaking apart. It's all good.

Originally Posted by wciappetta

I can't see that happening ever. They may pull them out of circulation but They must honor their worth if they are to have any credibility in the world market.

If I'm wrong the option then is to exchange your notes locally for lower iraqi denoms until you are ready to cash out. either way you won't lose.

Donald 1439 asked if "25 thousand dinar notes will be forsed to cash in and therefore be screwed?"

wciappetta is absolutley correct.

The Treasury no longer prints 5,000 or 10,000 USD notes but if you had some in a safety deposit box - do you think a bank would say, "sorry these are worthless now."

Another important conference coming up, no specific date. Keep an eye on this, this is big!

Late November: Conference on Iraq's reconstruction; participants include US, UN, Japan, and Saudi Arabia

Originally Posted by worf

I understand your point about starting low, but isn't there a 2 edged sword in play here? If they r/v too low (lets say .01 - .05) that won't be high enough to discourage the black marketers who would still get their items in Iraq and go over the boarder and sell them for a profit in neighboring countries. True it will have moved up considerably from where it is currently but probably not enough to cut off the black market. If they don't address the black market, then their few precious consumable items will still go accross the boarder for profit and out of the hand of the Iraqis for whom it is intended.

So don't they have to r/v high enough to try and knock out the black market so their consumables stay in Iraq for the Iraqis? Personally I don't think .01 is nearly enough. My thought has been around .30 to start (similar to Saudi Arabia, Egypt, Iran, Turkey, Isreal etc.) (like you say to try and get as much dinar back into the country as cheap as possible) and then raise it up steadily until it reaches the neighboring rate (Jordan, Kuwait, Qtar etc.) or at least 1:1. Again, you dealing with a proud people who have a recent history of a much more valuable dinar then it is currently. So I hope you are too low Wm. on your inital est. of course no offense intended just a disagreement in initial starting rate. (I hope I am right. )

But in a further effort to pick your brain, once it does r/v at some lower rate, based on your experience how long will they leave it low to try and get as much overseas currency cheaply, and how long will it take to raise to the 1:1 figure in your opinion? I realize no one really knows but you probably have a far better educated guess than the rest of us. Thanks for your reply,

worf

If i may add something here - the exchange rate, if not openly traded of the FOREX market, is easily under control of the central bank. If the RV at say, 0.05 and it is not on the FOREX, then the rate is still "artificial". The key, IMO, is a freely traded currency that adjusts according to the market.

So, how long would it take to get to 1:1 then? FX traders watch all the nws coming out a country. Unemployment, inflation, housing, retail sales... any and everything to gauge how the market is performing. Also, security and stability play a huge role in the value.

So, trying to guess what the dinar will do after becoming openly traded (if that's part of the plan) is pretty difficult. But, if it "opens" too low it will appreaciate to a level that everyone the economic world is comfortable with. A growing dinar rate will go hand in hand with a growing local economy.

Sean

PS. Some great posts here today - thanks everyone.

The currency of Iraq is the Dinar (ID, sometimes referred to as the New Iraqi Dinar NID since a new currency was introduced over the last quarter of 2003 and first months of 2004). Iraq’s current exchange system is characterized as follows:

• Free foreign exchange system, with no restrictions on purchases or sales of foreign currencies. The Iraqi currency is fully convertible and can be exchanged freely with any other currency.

• Free movement of capital with no restrictions on capital inflows and outflows.

• A multi-currency system in which foreign currencies circulate in the market, which is accessible to all (as a result, checks are officially cleared at the CBI not only in Iraqi Dinar, but also in other major foreign currencies particularly the US$).

CBI Law No. 56 of 2004 includes no restrictions on foreign exchange or restrictions on exchange remittance. Bank customers can obtain foreign currency from Iraqi banks who purchase it at auction organized by the CBI.

There are in law no formal restrictions on foreign investors in transferring investment revenues. However, the CBI requires that it authorize all transfers of funds outside of Iraq in amounts over $10,000. This is a requirement of authorization not merely reporting.

Paragraph 2-d, Section 7 of the Law of Foreign Investment (CPA Order No. 39 of 2003) provides that “a foreign investor” can transfer abroad without delay all funds associated with its foreign investment including:
• Shares or profits and dividends;
• Proceeds from the sale or other disposition of its foreign investment or a portion thereof;
• Interest, royalty payments, management fees, other fees and payments made under a contract; and
• Other transfers approved by the Ministry of Trade.

Originally Posted by _Apollo_

Fellow Dinar Investors,

First of all let me say that I have read ALL of Mr. Knowles posts. I believe that he might be a little more on the conservative side than most, but his points are valid.

When I first got into this venture the idea of the Dinar going to a penny floored me. WOW, 10 times on my investment? Where else could you get that kind of return? And even though the rate was really closer to .32 cents when we invaded, I couldn’t even imagine the possibility that my $1,000 investment could turn into $320,000. That was just not possible!!!

Now here it is 2 years later and I toy with the idea that it could open at $1.47…. Have I gone mad????

However, if Sunday comes along and the CBI posts new rates at .32 cents then are we really going to get on this forum and write about how pissed we are?

I mean, really… If your buddy come up to you and say, “Hey, I heard the Dinar opened up at .32 cents, doesn’t that make you a millionaire?” Are you going scoff and say, “Yeah, but it should have been more…..” as you pout and walk off?

When I sit back and really think about what has occurred in Iraq, and that many of our men and woman have died over there, I get humbled real fast. (Amen!) Yes this is a great investment, and yes, if we didn’t get involved, someone else would. I just think that sometimes we (myself included) lose our perspective.

Just my opinion..

Dan “Apollo”
CEO
Ompus / FreeDinar

This is so true...this is turning into something so much more than I ever expected It is all good and we should be grateful for what ever it STARTS at, knowing that it is going to rise over the years. We can get our original investment back plus interest and then wait for the big bucks to flow as the oil develops and produces, or invest some in the ISX if we want to risk it.

Thanks for your common sense....this is NOT all about money....people, civilizations, soldiers, children have paid a high price for the freedom that they really don't know what to do with YET. I pray the Lord will have mercy on this country and all the evil will come to a swift end soon.

Originally Posted by _Apollo_

Lets give this a try...

Here is the middle portion of the email that we sent out tonight.


.......However over the last few days we have found that the cost of Dinar has risen and has become harder to get.

The question you have to ask yourself is why? The answer is what we have been waiting for. The Dinar revaluation is upon us! But don’t take our word for it; take a look for yourself…

On November 13th, the Central Bank of Iraq issued a statement regarding increasing the value of the Dinar. An official source with the CBI said, “…the Iraqi Central Bank will adopt a tight monetary policy…aimed at reducing the inflation base through improved exchange rate of the Iraqi dinar and raise the purchasing power of the Iraqi dinar and make cash more attractive means…” You can read the full article HERE.

We have also noticed a trend at the Central Bank of Iraq that goes hand-in-hand with a revaluation. Since November 1st of this year the Central Bank of Iraq has bought back Iraqi Dinar from their local banks at a tune of over $720 Million Dollars! That’s over 1 Trillion Iraqi Dinar (1,055,373,700 to be exact). This means that they have taken a large chunk of their currency out of circulation. They have also been improving the exchange rate from 1470 Dinars to the Dollar to 1454 as of yesterday. LINK

Why would they do this? Well if you were the Central Bank of Iraq, which is operated similar to the United States Treasury, and you knew that your currency was about to increase in value, for whatever reason, you would want to pull as much out of circulation as possible before it cost you more. This is one of the reasons we believe that we have seen this dramatic move from the CBI. We also know from the statement by the CBI, that they have tried all other means to combat inflation, and that they are going to improve the exchange rate.

However, does a move from 1470 to 1454 do enough? Let’s look at this from an Iraqi’s point of view. Lets say a child’s pair of shoes in Iraq cost around $6.99 USD. At the old rate of 1470 that’s 10,275 Dinars. With the new rate of 1454, those shoes are now 10,163 Dinars. If you convert it the other way, it brings the shoes down to $6.91 for a total savings of 8 cents. Is that enough of an increase in the rate to combat inflation? No way…

We believe that this slight change in the exchange rate is just to attract the local banks to sell back their Dinar. At over $720 million bought by the CBI, the combined profit for the banks could be as high as 8 million dollars.

If the Dinar was going to increase, then why would the banks sell theirs back? Wouldn’t they stand to make much more than 8 million? The answer is that the local banks need US dollars for project funding. Most if not all of the reconstruction projects are paid in US dollars, not to mention ALL of their imports. Of course this will change once the Dinar becomes internationally traded.

One other thing to note, a recent article in an Iraqi paper alludes to the release of the lower denominations. This same article also states that the CBI has no plans to change the currency. Here is a snippet: “According to an official source at the Central Bank of Iraq…there is no intention at this time to change the Iraqi currency is expected that the issuance of new categories of transactions…” This is a rough Google translation, but when we hear, “new categories of transactions”, we think this is in regards to the lower denominations. You can read the article HERE.

Here are a few other links to news of interest..

Bush Meeting with Iraq Panel Offers Hope

Norway Finds Huge Amounts of Oil in Iraq!

CBI Officials Attend Advanced Training this Week

Dollar Demand Down at the CBI

And let’s not forget this important link in regards to Monday’s big trade meeting between Iraq and the European Union LINK

I think those links will work....

Dan "Apollo"

Thanks Dan, you are a great part of this forum and I love the way you simplify all the important info into some concise comments. I know many others here do too. Adster started with Free Dinar as did I and others. So thanks for helping us into this investment and for ROL and all these great people who keep us so well informed. This is what a group effort can do....so much more than one alone. Cheers to all of the hardworking believers in a new tomorrow for all of us.

I don't know if this is the right place but wasn't Dr. Shabibi one of your contacts before he was involved with the CBI? I know he kept saying low R/V and float up. Haven't heard anything from him any thoughts?

Has anyone looked at this and tried to get it translated the right way...
I tried and could not either...

Here is the post it was posted in the rumor section posted by BDD

http://www.rolclub.com/rumors-predic...tml#post136660

Urgent! All Arabic Translators Needed ASAP!!!

Guys, I know there are some people here who have done a great job finding resources that can translate Arabic into English. Well, here's an urgent project that may have some clues about the current monetary policy.

The CBI has recently issued a statement about inflation, on this page (in Arabic): ÇáÇÎÈÇÑ

The introduction to a PDF exhibit on this page says the following (which I got from using Google Translator):

"A press statement from the Iraqi Central Bank on the phenomenon of inflation (witness annex):"

On the Arabic page, this is followed by a PDF of the announcement, here. It's a scanned document, available only in Arabic.

http://cbiraq.org/News_Ar-12-2006.pdf

For some reason, the English version of this page DOES NOT HAVE A TRANSLATED VERSION OF THE ANNEX THAT THE ARABIC PAGE DOES. Perhaps they haven't had time to translate it, yet, or perhaps they don't want it widely disseminated in the West.

I've tried everything I know in terms of copying the PDF, and trying to paste it into Google Translator. It won't work, mostly because the text is scanned text, and Adobe Acrobate doesn't recognize Arabic text.

Can anyone help? If anyone can find a way to translate this document, I'd love to know what it says. Thanks in advance for your help, maybe this can yield a big clue as to what's going on at the CBI with Iraqi monetary policy.