Thread: My Turn With My Source. {Friend}

With regards to the IMF's Article 4...do you all remember that on April 30th at the meeting in Jordan between the IMF and the Iraqis they mentioned a follow up meeting for mid may and

also, remember that on the 28th of April the Finance Minister gave that long interview about solving unemployment - which included the progress on RV and he said that their would be a meeting of staff from the Finance Ministry, Interior Ministry and the CBI in mid may to follow up his request that the CBI put the dinar in pariety with the USD??

I think that meeting we did see a press conference where the parties mentioned by the Finance Minister's April comments did met - this is the one where the announced that there had been 140B USD forgiven on Iraq's debt and the CBI President said that he had 21B USD in hard currency reserves...

But, the IMF Meeting?

Not a clue...not a post?

ANY CLUES...as this was the important final meeting on article 4...

Please if someone can track this meeting down...

there we will find an answer to...the clue...the key to when there will be an RV!

TIA!

I do remember that, i'm looking on IMF right now, i did find this from the 7th, more data then anything else, but interesting.

Iraq Moves to Stabilize, Reform Economy
By Erik de Vrijer, Edward Gemayel, and Udo Kock
IMF Middle East and Central Asia Department


May 7, 2007

Iraq entering crucial period in its economic stabilization
Continued violence hampering recovery
Strong policy response to sharp jump in inflation
When the IMF Executive Board approved a 15-month, precautionary Stand-By Arrangement for Iraq in December 2005, the country set out on a broad economic reform program.

Under the program, the government aimed to rebuild the oil sector, which represents two-thirds of Iraq's GDP; gradually reduce pervasive and inefficient subsidies while making more resources available to improve such public services as infrastructure, education, health care, and security; and keep the Iraqi dinar broadly stable against the U.S. dollar as an anchor for macroeconomic stability. Fifteen months later, in March 2007, the IMF reviewed Iraq's reform program. Here we assess how the economy has fared.

Oil sector

The unforeseen deterioration in the security situation, especially in the second half of 2006, resulted in a dramatic increase in human suffering and the displacement of large numbers of people. The authorities have also struggled to maintain macroeconomic stability and create the conditions for sustainable growth over the medium term.

In 2006, the authorities put in place a budget that aimed to control the growth of current spending and reduce fuel subsidies so that they could concentrate resources on reconstruction, in particular in the oil sector. Despite very difficult circumstances, they largely succeeded in achieving several of their goals.

However, because of the prevailing violence, weak implementation capacity, and difficulties with procuring oil-related investment goods in a tight world market, the investment execution rate was only about 40 percent. Although the government had an overall budget surplus of about 11 percent of GDP, this came at the expense of much-needed investment, especially in the oil sector.

The lack of investment prevented an expansion of oil output, which remained unchanged from the previous year at about 2 million barrels a day. Real GDP growth, which was initially projected at more than 10 percent, ended the year at only 3 percent.

Ambitious reform program

To spur Iraq's transition to a market economy, the authorities also embarked on an ambitious agenda of structural reforms. In the fiscal area, they introduced a modern financial management information system, and the Iraqi parliament is reviewing amendments to make the pension law sustainable. Because of the lack of security and capacity constraints, some other measures were delayed. These include a census of public service employees and the adoption of a new budget classification system, in line with IMF guidelines.

In the financial sector, the authorities, with assistance from the IMF, set up a modern payment system and initiated an overhaul of the central bank's accounting, reporting, and auditing systems. Simultaneously, they are working on restructuring the state-owned banks and on implementing a new banking supervisory system.

Oil sector reforms included enacting legislation to liberalize the imports of fuel products; approval by the Council of Ministers of a much-needed draft hydrocarbon law; and, starting this year, elimination of all direct budgetary fuel subsidies, except on kerosene.

Unwelcome development

However, a surprise jump in inflation from 32 percent at end-2005 to 65 percent a year later raised serious concerns (see Chart 1). The increase was caused mainly by shortages of key commodities, especially fuel products, which were largely the result of the continuing lack of security in Iraq. In a recent poll, 62 percent of Iraqi respondents complained about the availability of basic household goods, up from 38 percent in 2005.

But underlying inflation (excluding fuel and transportation costs) was also stubbornly high, at about 30 percent. Given that the Central Bank of Iraq (CBI) maintained a tight grip on Iraqi dinars in circulation while the budget was in surplus, the high inflation appears to have been accommodated by the pervasive cash dollarization of the economy.
In mid-November 2006, the authorities initiated a strong policy response to the inflationary pressures. One of the objectives of the government budget for 2007 was to prevent current spending from putting further inflationary pressure on the small non-oil economy. The CBI, meanwhile, raised its policy interest rates sharply and allowed the dinar to appreciate against the dollar, which was possible in view of Iraq's comfortable level of international reserves (almost six months of import cover).

These measures were intended to dedollarize the economy to enhance the CBI's control over monetary conditions and also to reduce imported inflation. This policy appears to have had some success in increasing the demand for local currency. Moreover, in February 2007, overall inflation came down to 37 percent, and core inflation fell to 24 percent. Similar rates of inflation were recorded for March. But it is too soon to declare victory over inflation.


Fuel price adjustments

Despite strong initial political resistance, the authorities began in December 2005 to increase fuel prices gradually. Before the adjustments, fuel prices were extremely low, even by regional standards, with regular gasoline selling in Baghdad for 3 cents a liter and, outside the capital, for less than half that price. But fuel shortages worsened and inflation increased during 2006, making it an urgent priority to ease supply bottlenecks in the fuel market.

The authorities took action on two fronts: first, raising the price of fuel products to reduce the incentive for smuggling; and second, allowing the private sector to import fuel products. By March 2007, the prices of regular and premium gasoline were near the average levels in other oil-exporting countries in the Middle East and North Africa, and prices for diesel exceeded the regional average (see Chart 2).


One important outcome of the price increases was a reduction in budgetary subsidies, which allowed budgetary resources to be shifted to priority public services. Despite the increases, official fuel prices are still lower than the black market prices that most people have to pay. By and large, Iraqis seem to have largely accepted the higher prices because they consider it more important to have a regular supply of fuel.

With the passage of new legislation last October to allow private fuel imports, the increase in fuel prices is expected to make it more attractive for the private sector to become active in this area. It is hoped that better fuel availability in 2007 would help reduce black market prices and ease inflationary pressures.

The way forward

Iraq is entering a crucial period in its economic stabilization and recovery. Over the past 15 months, encouraging progress was made in strengthening economic policies and implementing structural reforms. However, much remains to be done. In the period ahead, the economic policy framework supported by the Stand-By Arrangement will also contribute to the International Compact with Iraq. It is hoped that this new partnership with the international community will help improve the political and security situation, which is essential to securing Iraq's future economic development.
IMF Survey: Iraq Moves to Stabilize, Reform Economy

I don't remember seeing this either

International Compact with Iraq
Statement by Mr. Takatoshi Kato
Deputy Managing Director of the International Monetary Fund
Sharm el-Sheikh, Egypt
May 3, 2007

As Prepared for Delivery

Mr. Secretary General, Prime Minister Maliki, Vice-President Mahdi, your excellencies, ladies and gentlemen, it is a great pleasure for me to address this important meeting on the occasion of the launching of the International Compact with Iraq. I congratulate the Government of Iraq, together with the United Nations and Iraq's partners, for their work in developing the Compact. The medium-term framework for political, security, and economic reform endorsed by the Compact aims to secure a better future for the Iraqi people. It is certainly encouraging that the Compact enjoys the strong support of the international community as demonstrated by the large gathering present here today.

The Fund has been closely engaged with Iraq since 2003. Initial work focused on setting up a macroeconomic database, including the preparation of a debt sustainability analysis, and on providing technical assistance and policy advice, mainly on monetary and fiscal policies and key structural reforms. In September 2004 the Fund approved Emergency Post-Conflict Assistance for Iraq, and this—in combination with the debt sustainability analysis—paved the way for the critical November 2004 debt reduction agreement with Paris Club creditors.

The current Stand-By Arrangement was approved in December 2005. It supports the authorities' broad economic reform program, aimed at maintaining macroeconomic stability and improving the conditions for sustainable growth over the medium term. The macroeconomic framework of the Stand-By Arrangement underlies the economic component of the Compact.

Despite extremely difficult circumstances, the Iraqi authorities have continued to implement their economic program. They have taken some courageous measures, including the gradual increase in domestic fuel prices and, starting in 2007, the elimination of all direct budgetary fuel subsidies, except for kerosene. Iraq has also embarked on an ambitious structural reform program, in order to make the transition to a more market-based economy. The government is working to modernize public financial management, streamline the social safety net, and amend the pension law to make it fiscally sustainable. The central bank is overhauling its accounting, reporting and auditing systems, and a modern payments system was established. Steps are also being taken to restructure state-owned banks and to bring the banking supervisory system in line with international best practice. In the oil sector, legislation was enacted to liberalize imports of fuel products and progress is being made in establishing a modern and transparent legal and regulatory framework. In that context, Iraq has indicated that it intends to participate in the Extractive Industries Transparency Initiative.

The sharp deterioration in the security situation during the past year was not foreseen at the outset of the program. As the daily news brings home to all of us, this has precipitated a dramatic increase in human suffering, directly as a result of the violence, as well as through the worsening of living conditions and the displacement of large numbers of people.

The unstable security situation has also exacted a heavy toll on the economy by disrupting its normal functioning and increasing the emigration of skilled labor. It has also hampered the execution of reconstruction and investment projects, and worsened shortages of key commodities, especially fuel products. The shortfall of investments in the oil sector together with the interruptions caused by the insurgency prevented the expected expansion of oil production, keeping economic growth low at 3 percent in 2006. Fuel shortages were a major factor behind the jump in inflation from 32 percent at end-2005 to a dangerously high rate of 65 percent at end-2006.

In response to these developments, and against the background of efforts to improve the security situation, the immediate challenges that Iraq faces in establishing a stable macroeconomic framework are lowering inflation and expanding oil-related investments. To combat inflation, action has been initiated on three fronts. First, the Central Bank of Iraq raised its policy interest rates sharply and allowed a gradual appreciation of the dinar. These measures aimed to de-dollarize the economy in order to enhance the central bank's control over monetary conditions, and also to reduce imported inflation. Second, the government budget for 2007 aims to contain current spending so as to limit inflationary pressures on the small non-oil economy. And third, the government is in the process of facilitating private fuel imports to ease shortages and help reduce black market prices. The first signs of the effects of these policies are encouraging: the annual inflation rate in February and March 2007 has fallen to about 37 percent. Of course, it is yet too soon to know whether this recent outcome represents the beginning of a sustained downward trend, and the authorities remain committed to continued action to reduce inflation further. The 2007 budget envisages a high level of oil-related investments and practical steps are being taken to improve project implementation.

In view of the encouraging progress made by the Iraqi authorities in strengthening economic policies and undertaking structural reforms, the IMF Executive Board completed the third and fourth reviews under the Stand-By Arrangement in early March 2007. At that meeting, the period covered by the arrangement was also extended by six months through September 2007, in order to provide more time for the program to achieve its growth and inflation objectives.

Looking ahead, the discussions on the fifth and final review under the current Stand-By Arrangement and on the 2007 Article IV consultation are scheduled to begin this summer. The Iraqi authorities have also indicated that they intend to request a successor arrangement to cover the period needed to reach the last stage of the Paris Club debt reduction agreement by December 2008. In the meantime, it will also be important to make further progress in reaching debt reduction agreements with non-Paris Club creditors.

I would like to emphasize that with the launching today of the International Compact with Iraq, the country is entering a crucial period in its political and economic recovery. Much remains to be done. It is our hope that this new partnership with the international community will help to improve the political and security situation, which is an indispensable condition for future economic development. The Fund is ready to contribute to the success of the International Compact with Iraq through the medium-term macroeconomic policy framework supported under the Stand-By Arrangement and its possible successor arrangement, as well as by providing policy advice and technical assistance in the areas of our expertise. The medium-term framework and the reviews of the Stand-By Arrangement can provide valuable information on economic developments in Iraq for donor countries subscribing to the International Compact with Iraq.

In conclusion, we wish the Iraqi authorities much success in the implementation of the measures envisaged under the Compact.
International Compact with Iraq, Statement by Mr. Takatoshi Kato, Deputy Managing Director of the International Monetary Fund, Sharm el-Sheikh, Egypt, May 3, 2007

Hello friends! My first post here. I have a dumb question. If ISX opens for us foreigners around June 2007, will the dinar revalue then? Sorry i don't know much yet about investing in to currency. Thanks in advance! Good luck to all...

Originally Posted by mrbizman

Hello friends! My first post here. I have a dumb question. If ISX opens for us foreigners around June 2007, will the dinar revalue then? Sorry i don't know much yet about investing in to currency. Thanks in advance! Good luck to all...

That is the million dollar question!

thats IF they open the stock exchange as they say they will.....would not surprise me one bit if they delay the opening.....this Iraqi government is good at saying things,but terrible at carrying them out....I hope they do open the stock exchange when they say they will because i believe that they will have to revel just before or right after opening....IMHO...Pat

Originally Posted by mrbizman

Hello friends! My first post here. I have a dumb question. If ISX opens for us foreigners around June 2007, will the dinar revalue then? Sorry i don't know much yet about investing in to currency. Thanks in advance! Good luck to all...

Get use to long Delays. Patience is a dinar value

One of the things I like about this investment, is we will at the very minimum get our initial investment and more back. It is an investment not speculation or gamble as some want to say. It may not be the millions we want but then again it could. As the dinar increases in value that many more of us will break even and then start to earn a return. Those of us that have been holding dinar for a couple of years know what it's like to sit with no rate change at all. Like it or not this is progress. If someone would have told you, before you knew about the dinar, that you would be a very rich person in 5 or 6 years, would you not be excited? What we're talking about is patients and understanding that this machine might run a little slower than we would like. I also know some are in a greater need for a large reval now and for those I truly wish that it would come sooner rather than later. My rant here is to point out the dinar is moving in the right direction we are not losing money, but are slowly earning. Years ago when I became a contract negotiator I had to learn patients. That was a hard lesson. I also had to learn that not all involved in negotiations saw problems as I saw them. Heck, we would fight like dogs within our own team. Another thing was the bigger the dollar sign the harder it was to make progress on an agreement. We are dealing with folks with some very different beliefs and values as well as some very big dollar signs. It will take time.

Thanks so much for the info everyone! I appreciate it! I only have 150,000 dinar so far...hehehe. I know it's not much compare to what you guys have invested. But to me if it revalue to at least 1:1 now I would be happy with that. It would make me a millionaire if i take that money to my poor country and just run my a small business over there. Anyway, I bought little by little at Ebay, started last Oct. 2006 once i had some extra money. Until now i can't even afford to get some more dinar because i have no other income. I had to give up my 1 p-time job so i can take care of my 2 yr old daughter and now i got laid off on my other part time job. So i wish they would do it now so i can pay off bills and also save my car for being repo...Good luck to all!

Thank you for your post, Neno. You had to post this info - good or bad. But, as is sadly the case, the rumors on this forum have not fared too well. That being said, I appreciate your input here. Personally, I think there's no way the dinar won't revalue. And I don't think it will be at less than $1.00. Doesn't make sense they would keep the value so low. Just my opinion. Sure hope this rumor is a bust.