Archive News - Iraqi Dinar Think Tank - 06/10/2010 - 24/01/2011

18th October 2010

Bank capital increase deadlines a red herring

On October 6, the Central Bank of Iraq (CBI) announced new deadlines for the private sector banks to reach the capital targets it set for them last March. According to the CBI’s original timetable, the banks had until the end of this year to bring their capital up to ID 100 bn (US$ 85 mn), until the end of next year to get to ID 150 bn (US$ 128 mn), and until the end of 2012 to reach ID 250 bn (US$ 213). The new announcement keeps the amounts the same but moves up the deadlines by six months—to June 30 of 2011, 2012, and 2013.

This reprieve is understandable as many banks were clearly not going to be able to reach this year’s target by the end of December. Indeed six more months may not even be enough given the difficulty of raising money under the existing securities law, which does not allow for underwriting and requires all new shares to be issued at par (ID 1). At a minimum, you would think these capital increase requirements would be postponed at least until the new securities law can be passed, which obviously won’t be any time soon given that a new government has yet to be formed.

In any case, it’s not really clear why the CBI’s targets are necessary in the first place. Presumably the central bank’s goal is to force the banks to lend more, or, alternatively, to sell themselves to foreign institutions that would be more active lenders. But most banks have more than enough capital to support the tiny amount of lending they do, which means that if they could profitably grow their lending businesses they would already be doing so. And simply bringing in foreign investors may make little difference—loan-deposit ratios at the existing foreign-invested banks are well below those at many of their locally-owned counterparts. (See my September 7 post for more on this.)

It seems to me that there’s actually no need for the CBI to specify any capital increase timetable at all, which implies that it is free to extend its deadlines repeatedly. Indeed the specter of bank capital increases that has been hanging over the stock market all year may turn out to have been something of a red herring. As long as the banks are having difficulty raising capital, the central bank seems willing to give them more time. And once conditions become more favorable, meeting the CBI’s targets shouldn’t really be much of a problem given the relatively small amounts of money involved.

http://www.iraq-businessnews.com/201...a-red-herring/

Oil is planning to develop the College of Petroleum and expansion of the training cadre

The representative of the Ministry of Higher Education and Scientific Research in the Oil Ministry said on Tuesday that the ministry is preparing a plan for the development of the College of Petroleum in Basra for the preparation of cadres of scientific journals in this vital area, while an oil official said that the ministry is preparing a plan for expansion in the training cadre and rehabilitation.

Said Mohammed Saleh Jawad told (Voices of Iraq) that the Ministry of Oil, "has formed a working group three years ago, a study for the development of specialized faculty oil subsidiary and according to academic standards the world to supplement this industry specialists qualified scientifically," adding that the college "will include six sections, namely oil, process engineering, geology, geophysics, energy economics, industrial management and a specialized division of oil and gas laws of Iraq and the world."

He added that opening the doors of college students "will be in September 2012", noting that the college "will contribute to the elimination of unemployment through the creation of special programs to convert the engineers and university graduates unemployed to disciplines useful oil industry about the benefit for themselves and their oil industry and the national economy that is both".

For his part, said director of Oil Training Institute, the Merciful, the Ministry of Oil, "is preparing a plan to expand the Institute and developed according to international standards, including those accredited by the American Petroleum Institute," adding, "as the Ministry seeks to benefit from the expertise of specialized companies to raise the skills of its members and their abilities using internal and external expertise available."

http://radionawa.com/Ar/NewsDetailN....268&LinkID=155

18th October 2010

Iraq Output “Will Double”

The Iraq Central Bank said that the survival of a high oil price will double Iraq GDP, helping it to achieve its goals by improving the value of the dinar through economic growth.

Speaking to IKHNews, adviser of the Central Bank, Mudhir Saleh, predicted the survival of oil prices in the $80-$85 range, which will double GDP and be reflected in government revenues. The proposed government budget, which should see a budget surplus by 2012, is based on a modest oil price of $70 per barrel.

Saleh said that “All the indications are that the Iraqi economy will shift dramatically during the next two years, improving the value of the dinar.” He pointed out that this will help to develop the oil sector further and push productivity to four million barrels per day, up from the current 2m to 2.5m.

This growth can be expected to improve national income, the value of the dinar, wages, and GDP per capita. Saleh noted that the dinar and the Central Bank’s reserves are stable, helping with monetary policy.

http://www.iraq-businessnews.com/201...t-will-double/

18th October 2010

Did Iraq Lie About Oil Reserves?

Two weeks ago Iraq revised its estimates of oil reserves upwards, and this was immediately followed by Iran doing the same.

Now Reuters reports that a former oil minister has cast doubt on the numbers and on the motivation of the governments in issuing the figures, saying that the estimates are politically motivated and not justified by the evidence. :blush:

Mr Issam Al Chalabi, who served as Iraqi oil minister in the government of Mr Saddam Hussein, said Iraq’s announcement last week that its proven oil reserves were 25% higher was ‘unreliable’. Unfortunately the announcement that was made last week has not been substantiated by proper evidence; he said that it is not a reliable figure. This is not the way to handle the reserves. I think it was made for political reasons.

According to BP data, Iraq raised its total estimate of proven oil reserves to 143 billion barrels making it the holder of the world’s third largest reserves after Saudi Arabia and Venezuela.

Iraqi officials said that the figures had been inflated by new estimates for the West Qurna and Zubair oilfields. But Mr Chalabi, who was Iraqi oil minister from 1987 to 1990, questioned the motivation for the new estimate.

http://www.iraq-businessnews.com/201...-oil-reserves/

Melkert urges Iraqis to hold unconditioned talks

UN Chief envoy to Iraq Ad Melkert met with Sayyed Ali Al Sistani in the holy City of Najaf.

Melkert urged all political parties to hold unconditioned talks on government formation.

The present situation in Iraq requires from all parties to put people’s interest above all personal interests, Melkert told reporters.

Melkert affirmed that he is visiting Grand Ayatollah Ali Sistani to get his point of view on government delay.

Al Sistani is keen on pushing political parties’ talks forward in order to boost the political process, Melkert said.

The United Nations will advise Iraqi politicians to accelerate the government formation in what serves the country’s interest, he added.

http://www.alsumaria.tv/en/Iraq-News...ned-talks.html

Maliki: President Mubarak issued directives to increase the contribution of Egyptian companies in the realization of Iraq

Prime Minister Nouri al-Maliki that his visit to Egypt and his meeting with President Hosni Mubarak holds many meanings emanating from a common interest in the relationship and enable the two countries in various fields.

Maliki said - in remarks after his meeting with President Hosni Mubarak today, he said Wednesday - that the constant consultations between Egypt and Iraq is not modern but a continuation of close relations and mutual visits between the leaders of the two countries, stressing that we in Iraq are proud of just relations with Egypt.

He pointed out that during the meeting to discuss the political situation in Iraq in detail, saying, We put our efforts and trends to form a government of national unity in order to be a logo next phase is the construction, reconstruction and installation of security.

He pointed out that this requires the strengthening of relations and the signing of agreements with the brotherly and friendly countries to be partners of the reconstruction process in Iraq, where Iraq's reconstruction needs to be comprehensive.

http://www.ipairaq.com/index.php?nam...itics&id=31576

Mr. Sistani will direct an urgent meeting of the blocks in Baghdad or Irbil in the light of the request Melkert

Informed source close to the reference Najaf (Khaleej Times) The top Shi'ite cleric Ali al-Sistani will be asked by representatives of his political blocs which is locked in a struggle to win under the chairmanship of the Government to hold urgent meeting in Baghdad or Irbil to discuss the political crisis and to make concessions in an effort to bring their views and agreement on government .

He explained that references the four adults prefer the formation of Vice President Adel Abdul-Mahdi, the government will be distributed with the Iraqi List and the Supreme Council of Islamic political forces today a draft calling for an alliance to join them.

The source added in a telephone interview that the President of the United Nations mission in Iraq, Ad Melkert, told al-Sistani during a meeting with him in Najaf (160 km) south of Baghdad during the last hours annoyance of visits by the Prime Minister, leader of a coalition of state law and the candidate of the National Coalition for a second term Nuri neighboring countries and the region, taking advantage of political office in search of support for the continuation of the prime minister.

He pointed out that Melkert asked Sistani move in order to collect the political forces and discuss the political crisis and to seek consensus leads to a solution.

He said that the authority had supported the request Melkert, but he said he has no right to intervene and put pressure on these powers, but would give her advice and counseling should be on a round table meeting as soon as possible.

The source said that Sistani Melkert promised to move toward the political blocs through his representatives and demand of the convening of the meeting is expected in the presence of a representative of the reference in Baghdad or Irbil, capital of the Kurdistan region.

Compass heading toward the nomination Abdul-Mahdi

The source said that the impression left by his Melkert of his meeting with Sistani and other Shiite authorities preference for Abdul-Mahdi, leader of the Islamic Supreme Council at the head the next government is expected to support the Sadrist movement in the last minute nomination of Abdul-Mahdi.

In this context, leader of the Liberal block of the Sadrist MP Bahaa al-Sadr's movement that generally would not stand if Abdul-Mahdi, has been nominated for a broader coalition of the National Alliance.

He added that the Constitution stipulates that presidential candidate, the government should be the biggest bloc, the National Alliance and currently is the largest, if either was the formation of a broader coalition and nominated him to the alliance Abdul-Mahdi, that it would be constitutional and will not stand deduced from it.

He stressed that the Sadrists did not have any reservations to the Mahdi will not stand at all general nominated to head the government.

For his part, denied the leader of the Iraqi Vice President Tariq al-Hashimi of Iraq in the presence of regional pressure behind the decision to list the backing of Abdul-Mahdi as prime minister.

The al-Hashemi told reporters in Doha, which is on a visit that the decision to support the Mahdi came after re-reading of the political scene, pointing out that Maliki's nomination is still pending.

He stressed that there is acceptance of the Mahdi, who enjoys an excellent relationship with the Kurds, saying that the national interest to support his candidacy.

The search Melkert over 3 hours with Sistani, the government crisis and the ongoing negotiations between the political blocs to solve it and said after the meeting that the time has now come for the meeting of the political blocs around the same table in accordance with constitutional principles and without conditions and poses of their issues and form the new Iraqi government without delay.

And invited them to put their interests above the interests of Iraq. Melkert did not give any details about discussions at the meeting, saying only that what happened between him and al-Sistani of the discussions will remain confidential in nature. He stressed that the current situation in Iraq requires that all political parties favoring the interest of the Iraqi people to any special interests.

He stressed the need to be aware of all the political parties the need for Iraq to form a new Iraqi government, despite our respect for its caretaker government work. He explained that he discussed with al-Sistani's views on the political process as well as exchange views on various issues and listen to the advice of the reference.

For his part, the reference Sheikh Mohammed al-Yacoubi during a meeting with Melkert that "the role the United Nations Mission in Iraq is important and effective because it is a mediator acceptable to all," adding that "the role of the United Nations as weakness or retreat in Iraq allows the emergence of regional interventions and strongly over the conflicts and intersections."

He added that "the practice of the United Nations Mission for the positive role the actor leads to decline in the impact of interventions and succeed in the diaspora to gather Iraqi political parties."

He warned that "attempts to form a majority government policy does not contribute to solve problems and remove the nodes that experienced by the country, even more complicated."

The representative of Sistani warned in a sermon last Friday, the risk of delay in forming the government, hinting at the possibility of interference reference in this matter.

Tours and Iraqi politicians refuse to neighboring countries and the region to discuss the issue of government formation and invited them to hold their meetings inside the country and understanding between them on the solutions to the crisis, stressing that the decision in this regard must be an Iraqi national.

He also expressed the UN Security Council during its last summer of the situation in Iraq's political concern about the delay in forming the government calling for political forces to speed up agreement on the declaration of the Government of national partnership.

In this context, the search Massoud Barzani, head of the Kurdistan region in four separate phone calls negotiations on a future Iraqi government.

Barzani has discussed with U.S. Vice President Joe Biden, the current political situation in Iraq and the process of negotiations between the political parties to form a new government and the recent changes that have taken place on the attitude of political parties.

Barzani also held contacts with President Jalal Talabani and Prime Minister Nuri al-Maliki and President of the Iraqi List, won in the elections, Iyad Allawi.

Has been discussed latest developments in the political situation of the country and talks between the political blocs to form a government, stressing the importance of access to a government that includes all the components of the Iraqi people to serve the aspirations and stability in the country.

The communication comes at a time waiting to see the next few days of intensive activities in order to form the new Iraqi government in Baghdad and Erbil.

http://www.shatnews.com/index.php?sh...article&id=668

Concern for Iraq Oil

Iraq’s oil pipelines are decades past their use-by-date. “We are afraid of anything happening to them,” said Deputy Oil Minister Ahmad Shamma, according to Iraq Oil Report.

US concerns for the ageing infrastructure were pushed as early as 2008, but now billions of dollars are being invested to create new pipelines to protect Iraqi oil exports. Shamma indicated that containment might have been lost due to corrosion, but said that “We will test them and see what we can do with them. We will operate them as long as it’s possible.”

Despite billions of dollars being invested in the oil industry in Iraq, no new pipelines have yet been developed. There have been reports of new pipelines to Turkey, routes to Israel, and connecting to Europe, and even pipeline deals with Iran.

One thing is for sure, with 95% of Iraq’s revenue coming from oil, a major shutdown of its existing pipelines before new ones are up-and-running would be a disaster.

http://www.iraq-businessnews.com/201...-for-iraq-oil/

Quote:

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Originally Posted by Seaview

Central Bank: delete three zeros would require consultation with the next government

Iraqi central bank said on Tuesday that the decision to remove the zeros from the currency needs to consult the next government, the process returned a strategic national project to reform the management system of currency.

He said bank consultant appearance of Mohammed Saleh, said that (deleting three zeros from the currency will negatively affect the Iraqi citizens, but will facilitate the exchange system transactions and bank deposit and withdrawal, particularly that Iraq does not deal Ertat but cash), adding that the (currency exchange comes to reform the management of the currency in Iraq) , stressing that the (change currency needs to be consultation between the Central Bank of Iraq and the next government and parliament and needs logistical support).

The news agency Voices of Iraq for the benefit of saying that the (mass of cash must be commensurate with the next stage and on this basis will be the reform of the currency by removing three zeros), explaining that the (mass current cash is the product of the stage of inflation prevailed in Iraq over the past twenty years and it is not the product of real economic development, but the result of loans and financing for inflation, the public budget).

He spoke of the Central Bank earlier in the long-term project to remove three zeros from the dinar in order to increase its capacity.

http://www.alsabaah.com/paper.php?so...age&sid=110360

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Same article, different news source

Central Bank: Changing the currency needs to consult with the next government

Adviser said the Iraqi Central Bank the appearance of Mohammed Saleh, Tuesday, that the process of lifting the zeros from the currency is a national project to reform the system of strategic management of the currency in Iraq and needs to be consultation between the bank and the next government.

He said Saleh told (Voices of Iraq) that "delete three zeros from the currency will negatively affect the Iraqi citizens, but will facilitate the exchange system transactions and deposit banking, retirement and we are a country that does not deal Ertat, but we deal in cash," adding that "the replacement of currency comes to reform the management of the currency in Iraq".

He said "change the currency status of national and needs to be consultation between the Central Bank of Iraq, the government and parliament next and needs to logistical support," noting that "the cluster of cash must be commensurate with the next stage and on this basis will reform the management of currency by deleting three zeros."

He said the central bank adviser to the current monetary bloc is "the product of inflationary phase prevailed in Iraq over the past 20 years and it is not the product of real economic development, but rather the result of loans to inflation and the financing of the public budget."

The Central Bank of Iraq announced earlier, for long-term project to delete the three zeroes from the Iraqi dinar in order to improve the situation of the Iraqi currency.

http://radionawa.com/Ar/NewsDetailN....225&LinkID=155

Lower central bank sales to 135 million dollars

Close Central Bank of Iraq on Wednesday Fourth DIFC Week sessions for the sale and purchase of foreign currency and the dollar increase in the level Sales of the dollar to 135.91 million dollars, after rising at its previous investigators 173.247 million dollars At a stable exchange rate was 1170 dinars per dollar.

The Information Office of the bank in the bulletin to the total sales The only amounts transferred out of the country reached 135.91 million dollars in cash and bank shot at a stable conversion reached 1179 dinars per dollar, including the commission of the bank of $ 9 dinars per dollar.

It was not the bank of any cash transactions of the sixth meeting Respectively .

http://al-iraqnews.net/new/economic-news/30977.html