BLC Admin tlm724 Chat IMF 03/20/2015
[tlm724] so I have had some quiet time among the trees for the last week and was thinking, scarey I know lol. The other the day the IMF came out with it's report on Iraq, remember ?
[Mikey] yup, well sorta
[tlm724] and they were all whiney about the rate spread, oh mikey wait I'll show the part I'm talking about
“The foreign exchange market has remained stable in 2014 following steps taken by the CBI to liberalize it, and the parallel market spread had declined to 3.5 percent at the end of the year.
However, the authorities should reconsider the caps on CBI foreign exchange sales and the collection of custom duties through commercial banks.
These measures are effectively restricting the supply of foreign exchange to the Iraqi economy and have boosted the parallel market rates to record levels in the past weeks.
[tlm724] being crybabies about it lol sooooo like I said I was thinkin about that and came to the conclusion I don't care ... let me splain it too you Lucy . We have always heard Iraq has to be within 2% bla bla bla and to be honest I thought so too
[tlm724] hang on let me find something real quick , k here it is
[tlm724] how come everyone forgets to mention this fact when they repeatedly talk about it ! Wouldn't it be responsible to remind people of this ? The exchange rate may fluctuate within narrow margins of less than ±1 percent around a central rate.
That means its not a firm 2% *slap* plus or minus 1% means exactly that ! I take that to mean they can go up to a 3% spread or down to a 1% spread and still be good. And another thing
[tlm724] why does no one ever mention the fact that the IMF said that certain flexibilty can be arranged with individual states as needed and requested ?? and how come no one ever told us that the IMF uses 1170 dinars per dollar for ALL their calculations for Iraq ???
[tlm724] I'll show you:
For purposes of monitoring under the program, a program exchange rate will be used. This program exchange rate will be set at ID 1,170 per U.S. dollar.
The program exchange rate will be used to convert into Iraqi dinars the U.S. dollar value of all CBI foreign assets and liabilities denominated in U.S. dollars, as required.
[tlm724] so how important is this 2% thingy? Not very important in my opinion, let me pose this question: has Iraq ever changed their exchange rate ? the answer is yes and how many times in the last say 60 years ? you can guess this isn't a test lol
[Cutter1] tlm724 two
[tlm724] your getting warm cutter, lil higher
[Cutter1] tlm724 ok 3
[tlm724] Cutter lol let me show you and I am not going into details and talking about gradual increases and all that stuff, just using these examples, lets not complicate things life is hard enough already lol
1. 1959 the peg was switched to the United States dollar at the rate of 1 Dinar = $2.8 dollars.
2. 1971 and 1973, the Dinar rose to a value of US$3.3778, before a 5 percent devaluation reduced the value of the Dinar to US$3.2169
3. late 1995, US$1 was valued at 3,000 dinars
4. Between October 15, 2003, and January 15, 2004, the Coalition Provisional Authority issued new Iraqi dinar coins and notes. Old banknotes were exchanged for new at a one-to-one rate, except for the Swiss dinars, which were exchanged at a rate of 150 new dinars for one Swiss dinar
5. The Dinar is currently pegged to the dollar at a rate of 1166/1164 (sell/buy) dinars per dollar
[Cutter1] tlm724 cool
[tlm724] soooooooooo the CPA and the CBI changed the rate 5 times all without all this hub bub about the IMF ! I just wanted to show that Iraq does not need all that to change their rate is all and if someone doesn't give you ALL the facts and just insists it MUST be 2 %
don't believe it as I did for quite some time until I took the time to really study as I was taught too. So Iraq doesn't HAVE to be in IMF article VIII "compliance" to change the value, ok ?
It's not that Iraq doesn't want to be in article 8 because they do and have been working on it for many years just as they are the WTO but they are going to make sure they have everything right before they commit to that !
No turning back once they accept, well they can turn back but not without repercussions to their economy.
They have to get it right and that may take more time but I am no longer concerned about that part. I guess I just had to prove it myself and decided to share what I found . Thanks, thats is all, carry on lol