I found this report of defenselink, quartly report from 30/11/2006 with a very interesting part about the inflation, economy and Dinar!
Chapter "Inflation" (page 12/13):
"Inflation
Iraq’s high rate of inflation is a serious obstacle to progress under the IMF’s Stand- By Arrangement (SBA). Sustained progress
under the SBA is necessary to secure donor support for the International Compact, and failure to meet the terms of the SBA would complicate negotiations for a new IMF program in 2007. Satisfactory progress under an IMF program for three years is required for the final 20% of Paris Club debt relief.
High inflation—a result of disruptions in the supply of food and fuel, price deregulation, spending by the Government of Iraq and
donors, and growth of the money supply—is threatening progress toward economic stability in Iraq.
Unlike in previous years, when inflation was confined mainly to rents, fuel, and transport, prices are now increasing rapidly in all sectors. According to Iraq’s Central Organization for Statistics and information Technology, the annual inflation rate from October 2005 to October 2006 was 53%. It is widely believed that the official
inflation rate underestimates the actual inflation rate.
Runaway inflation exacerbates the government’s
decline in purchasing power and increases wage and pension demands, placing added pressure on the budget.
Over the past three months, the Central Bank
of Iraq has taken steps to try to stem inflation.
• The bank raised interest rates from 7% to 12%, but the weak banking sector and the significant influence of the dollar rendered
this move largely symbolic.
• The bank also slowly appreciated the dinar. The exchange rate is now approximately 1,455 Iraqi dinar to US$1.
However, a much faster rate of appreciation will be necessary to fight inflation. By increasing the dinar’s value, the Central Bank of Iraq could encourage more Iraqis to hold onto dinars as opposed to converting them to dollars.
Appreciation of the dinar would also reduce the dinar value of the Government of Iraq’s dollar denominated revenue (more than 90% of revenues is from oil), but, as appreciation succeeds in controlling inflation, the government would require fewer dinars to pay for its expenditures.
Appreciation of the dinar would not harm the competitiveness
of Iraqi exports—non-oil exports are negligible—but it could impair the ability of domestic industries like agriculture to compete with foreign imports.
However, the bank has been reluctant to take the necessary stronger measures."
Link: http://www.defenselink.mil/pubs/pdfs...t-20061216.pdf
Raising interest rates just symbolic, not helping!
Decline in purchasing power, increasing wages is pressuring the budget. They have raised salaries by 60% from january and I believe 80% for retirements. I cannot believe that the current rise in points or the mentioned 1260 will cover all this and curb that inflation.
They want that Iraqis to hold on to the dinar to reduce the use of dollars. I cannot believe that this rate or the proposed 1260 dinars will be enough to realize this. They have to appreciate the dinar a lot more to realize this I think.
Then yesterday the article about the only using the dinar exclusively for GoI.
We have HCL/FIL enacted begin January that opens the doors to Iraq.
Personally I cannot imagine that they will start with a rate of 1260 or this rate of 1325 if this all happens.
Then that inflation is a big problem and at this moment only a increase in the exchange rate seems to be the solution that is why it is adviced to do it "much faster".
As we read is inflation a very big problem and can even give a hell of lot problems more then they already do by obstructing the SBA of the IMF which ends the first quarter of 2007 and which is very important to the donor countries.
Personally I go for the bold adjust of a minimun of 1:1 lever, I also think 1:1 euro level.
If it will be a further appreciation then it has to be with big steps and rapidly.
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28-12-2006, 02:33 PM #35421
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Good read and an opinion!
"There is a paragraph about investment in this year's budget which provides for having the Iraqi dinar as the main currency in the 2007 budget," Sulagh said (Minister of Finance).
The head of the Research and Statistics, Dr. Mohamed Saleh:
The rate of 75% of the real exchange rate of the dollar to improve...
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28-12-2006, 02:34 PM #35422
CBI Bills Auctions!!
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28-12-2006, 02:36 PM #35423
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The Agricultural Bank continues to grant facilities and loans and advances to staff and citizens
).The Agricultural Cooperative Bank, the Ministry of Finance grant facilities and loans and advances, especially for the staff of the Ministries of Youth and Sports, Trade, municipal works, environment, interior).
.Similarly, the Agricultural Bank buying and selling of the dollar by the Central Bank of Iraq for the benefit of customers of the bank and also is conducting the sale and purchase of shares of companies listed in Iraq's market of securities by two per week in addition Aliamlyat settlement after each meeting
Translated version of http://www.sotaliraq.com/headlines.html
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28-12-2006, 02:37 PM #35424
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Are we sure that there will be no auctions next week or is this an interpretation of an article. According to the recently posted article a few posts back it said will hold at rate 27/12/2006 until end of business day on Jan 7, 2007. Sounds like there will still be auctions but the rate itself will not move during next weeks auctions. I wasn't sure if we had a definite confirmation of no business dealings/auctions next week.
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28-12-2006, 02:42 PM #35425
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Charmed i found this one this morn, it's just a rehash but does mention rates not changing
Central Bank of Iraq announces adoption buying and selling rates of the dollar to the day yesterday, Wednesday, until the end of office hours on Sunday, the seventh of next month.
:The Central Bank made buying and selling rates of the dollar to the day yesterday, Wednesday, until the end of office hours on Sunday, the seventh of next month, came in a statement issued today by the Central Bank with the text :
.Declaring the Iraqi Central Bank adopted buying and selling rates for the dollar on Wednesday, which falls on 27 / 12 / 2006 and set out below for subsequent days until the end of office hours on Sunday, which falls on January 7, 2007, and pledged to meet the demand for the demand for foreign currency without limit and regardless of the quantities required and all its customers.
.It also undertakes to purchase all the quantities offered by banks with the same rates and maintain unchanged for subsequent days.
أ*- .ا*-price basis for the yacht auction Wednesday, which falls on 27 / 12 / 2006 (1325) sell dinars / $.
ب*- (1323) دينار/ دولار.ب*-sale price of remittances dinars (1323) / $.
ج(1336) دينار/ دولار.C-cash sales price (1336) dinars / $.
د- (1334) دينار/ دولارD-cash purchase price (1334) dinars / $
Translated version of http://www.sotaliraq.com/headlines.html
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28-12-2006, 02:48 PM #35426
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28-12-2006, 02:48 PM #35427
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The draft budget for 2007, the development of the private sector in the area of trade in foodstuffs, oil horizons of cooperation between Iraq and Russia in 2007
اعداد و تقديم: ناظم ياسينPreparation and submission : Nazim Yasin
07.Welcome to this episode of the new (economic report), prepared by Nazim Yassin, and includes an interview with the chairman of the Economic Committee of the House of the Iraqi Haidar Al-Ebadi on the draft general budget for 2007.
.In today's episode another interview with the head (the Association of foodstuff merchants in Iraq), in addition to economic analysis on the prospects of oil cooperation between Iraq and Russia.
- مشروع الميزانية العامة لسنة 2007- The draft budget for 2007
.The Presidency announced in the House of Representatives recently that the Iraqi government submitted a draft budget for 2007 of Forty-one billion dollars, an increase of eleven billion dollars from the budget last year. It is scheduled to discuss the parliament the draft budget at its first meeting of after Eid Al-Adha holiday.
وفي.In an exclusive statement to Radio Free Iraq on the proposed budget, which he described as (explosive), the head of the Economic Committee in the House of the Iraqi Haidar Abbadi said that next year would witness the economic prosperous and advanced in the area of services and the standard of living of its citizens. .With comes listen to the audio report, which has given us our correspondent in Baghdad Leith Ahmed and includes interview with the Chairman of the Economic Committee in the Iraqi Parliament in addition to the statement of a member of the House of Representatives from the (Kurdistan Alliance) Mahmoud Othman, in the portion of the budget allocated to the region of Kurdistan.
()(Report myself with the statements)
- - Development of the private sector in the area of trade in foodstuffs
في the context of steps aimed at the development of the Iraqi private sector in the area of trade in foodstuffs, one of the organizations seeking local economic and
(.(Traders Association of foodstuffs in Iraq) seeks to educate traders and awareness through meetings and sessions of their importance at this stage to the point where Iraq toward a market economy.
وفي.In talking to (economic report) on the importance of these steps in the rehabilitation of the private sector to play its role to be part of the public sector in the marketing of foodstuffs, the President of the Association, Dr. Aziz that the members of the traders and academics are trying to put controls studied to improve the work free trade in general and improving the Iraqi economy.
.With comes listen to his interview with the correspondent of Radio Free Iraq in Baghdad Jassim talked first about the objectives of the Association.
()(Interview with the President of the Association of Traders foodstuffs in Iraq)
- آفاق 2007Oil-horizons of cooperation between Iraq and Russia in 2007
.Finally, announced in Moscow that the Director of the company (Lukoil) Russian oil intends to visit Iraq next year to hold meetings with officials in the Iraqi oil ministry for the development of bilateral cooperation between the two countries.
:In follow-up to this topic, a correspondent of Radio Free Iraq Mikhail Alandarenko an interview with the Analyst economic, political and Dr. Elena Subonina Wavana period acoustic follows :
"."The director of the company (Lukoil) Russian oil and one Akbirov that are expected to visit Iraq in 2007 to hold meetings with the leadership of the country and discuss bilateral cooperation in the field of oil extraction.
.He had earlier made Akbirov permission last month that (Lukoil) is determined to develop cooperation with Iraq. Akbirov stated that he had met with Iraqi Oil Minister Hussein Shahrastani in the last period to discuss the work of the Russian company in the field of West Qurna-2. The Russian official expressed hope to increase Iraqi-Russian relations in the field of oil extraction to a higher level.
."One Akbirov was optimistic in his views and estimates of future prospects of cooperation with Iraq. However, the Analyst Russian political and economic Dr. us Subonina expressed in an interview with Radio Free Iraq pessimistic of cooperation between Moscow and Baghdad. "
()(Interview with the Russian economic Analyst)
Translated version of http://www.iraqhurr.org/
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28-12-2006, 02:50 PM #35428
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28-12-2006, 02:52 PM #35429
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Looking to the East
By Mizgin Yilmaz
--------------------------------------------------------------------------------
28 December 2006 (KurdishMedia)
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Exactly a year ago next week, The Jamestown Foundation published a short analysis of China's Kurdish policy, in which it outlined steps taken by the two main Southern Kurdish parties to engage China. The desire for engagement appears to be a mutual one fueled by China's growing energy needs.
Given his Marxist ideological roots, it's not surprising that Jalal Talabani was the first Kurdish leader to arrive in Beijing in early August 2003 as chairman of the Patriotic Union of Kurdistan (PUK) and member of the Iraqi Interim Governing Council. Talabani was "invited by the Chinese People’s Association for Friendship with Foreign Countries, an official “unofficial” instrument, and headed the first Iraqi delegation to visit China after the war." (Al-Ittihad [Baghdad], May 11, 2005).
After Talabani was appointed as Iraqi president, the Chinese made their first visit to Kurdistan when the "Chinese Communist Party (CCP) delegation led by Ding Lifen [.] arrived in early May 2005 through the Al-Munziriyah Crossing near Khanaqin (on the Iranian border). The delegation was received by the heads of the PUK Khanaqin media office and organization center."
Within days of the arrival of the Chinese delegation, Massuad Barzani met with Chinese officials, including the Chinese ambassador to Iraq, and was invited to make an official visit to China. The Chinese ambassador, "Stressing the Chinese people’s appreciation for the many sacrifices endured by the Kurdistan people, [he] expressed his hope for closer relations between the two peoples through expanded ties between the PRC and the Kurdistan Regional Government and especially between the CCP and the KDP. He underlined the important role of the Kurdistan people in rebuilding a federal and democratic Iraq. In response Barzani expressed his hope that the Chinese government would play its role in rebuilding Kurdistan." (Khabat [Arbil], May 16, 2005)
The Communist Party of Iraqi Kurdistan also seems to have endorsed the Sino-Kurdish engagement. In October, 2005, China hosted another PUK delegation, headed by politburo member, Kosrat Rasul Ali.
The Jamestown Foundation notes the following as reasons for Chinese interest in South Kurdistan: as leverage against Turkish support of Uighur separatists in China's Xinjiang region; as an effort to gain a foothold in the Middle East; and, of course, as a source to help satisfy future Chinese energy needs. With such a need for energy resources to drive the Chinese economy, would China lend support to the KRG in a showdown over Xanaqin, if needed, or over Kerkuk? If Iraqi "territorial integrity" were maintained through federalism, then Chinese support for Kurdish control of Kerkuk could be the beginning of a mutually beneficial alliance, especially since the Norwegian DNO Company subcontracted the construction of the drilling rig outside of Zaxo to a Chinese company.
From all this activity, it appears that China is ready to accept a federal status for Kurdistan within the Iraqi state. If so, would China also support a similar arrangement within the other states that continue to repress their own Kurdish populations? For a number of years the PKK has emphasized its desire to work within a framework that would guarantee Turkish "territorial integrity," repeating this position as recently as the end of August, 2006. A PKK ceasefire was called on October 1, 2006, in response to PKK-KRG negotiations. Both the ceasefire and calls for negotiation that would allow PKK to work legally and politically within North Kurdistan have been rejected by both Ankara and Washington.
Given the PKK's position vis-a-vis Turkish territorial integrity, there is no reason why access to Kurdish oil by China, or by the wider Shanghai Cooperation Organization (SCO), cannot be linked to Kurdish political rights in Turkey. The Russian Duma has expressed support for the cause of the Kurdish people in North Kurdistan in the past. As a member of the SCO, Russia might also bring pressure against Turkey and the US to negotiate a peaceful, political solution with the PKK. Pressure may also be brought against severe Iranian repression of Kurds, since Iran recently received observer status with the SCO.
As a reminder, there is oil in North Kurdistan as well as in the South.
Washington rejects a political solution to the Kurdish situation in North Kurdistan for the business interests of its own defense industry, as is obvious from the appointment of Lockheed Martin board of directors' member, Joseph Ralston, as the PKK "coordinator." Also listed with the US Senate as a lobbyist for Lockheed Martin, working for The Cohen Group, and as a member of the American Turkish Council's advisory board, the appointment of Ralston is another example of US intentions to control the oil-rich region. Another indication was the visit of Condoleezza Rice to Ankara at the end of April, 2006, as the Turkish army massed along the border between North and South Kurdistan, fired weaponry upon South Kurdistan, and infiltrated more JITEM operatives into South Kurdistan.
Such attacks against the so-called American ally in "Northern Iraq" while the Secretary of State was on an official visit to Ankara indicate just how valuable the Southern Kurdish "allies" are.
With the publication of the Iraq Study Group recommendations, we know how other influences in the US establishment view Iraq and Kurdistan. These influences desire to return to the pre-Gulf War status quo, no matter how badly that status quo treated the Kurdish people. All hot air expended for the facade of concern for human rights aside, these influences are interested in returning to the good old days for the sake of their personal involvement in the oil industry. In connection with the ISG, we have Tony Blair's earlier announcement, in the Sunday Telegraph, that Kurds should "acquiesc[e] in their treatment." Then there was the EU's utter silence over the Amed Serhildan and the Amed Bombing, a silence which also urges the Kurdish people to "acquiesce." Of course, these are only the most recent betrayals of Kurds by the West.
In an article from the beginning of December, 2006, JINSA takes an openly hypocritical stand against the SCO, citing human rights violations and crying for the sake of "democracy" worldwide, without any hint that the US itself only uses the "democracy" argument as a shell game to further its own national interests. The result is an extreme case of the pot calling the kettle black.
It is time that Kurdistan began to explore other options, with its own national interests in mind. It may be that there are others, in the East, with whom alliances can be made that will be mutually satisfying. To that end, there should be a conference of the Kurdish people worldwide, represented by the executive council of the Koma Komalan Kurdistan and Kongra-Gel, the KRG, DTP, KNK, any other regional parties or organizations, intellectuals from Kurdistan and from Diaspora. This conference should stress the fact that the leadership must follow a policy that will maximize Kurdish interests in all parts of Kurdistan.
Anything less is unacceptable.
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28-12-2006, 02:55 PM #35430
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