DINAR UPDATES 3-29-16
Post From Dinar Updates
Chat Room Excerpts & Highlights
Dinar Updates Tuesday AM Chat 3-29-16 Part 2 of 3
rcookie says to da58():Quantitative conditions. Member countries’ progress is monitored using quantitative program targets (quantitative performance criteria and indicative targets).
Fund disbursements are conditional on the observance of quantitative performance criteria, unless the Executive Board decides to waive them. Examples include targets for international reserves and government deficits or borrowing, consistent with program goals.
rcookie says to da58():Structural measures. The new SBA framework has eliminated structural performance criteria. Instead, progress in implementing structural measures that are critical to achieving the objectives of the program are assessed in a holistic way, including via benchmarks in key policy areas, in the context of program reviews.
rcookie says to da58():Frequency of reviews. Regular reviews by the IMF’s Executive Board play a critical role in assessing performance under the program and allowing the program to adapt to economic developments. The SBA framework allows flexibility in the frequency of reviews based on the strength of the country’s policies and the nature of its financing needs.
rcookie says to da58():Lending terms Repayment. Repayment of borrowed resources under the SBA are due within 31⁄4-5 years of disbursement, which means each disbursement is repaid in eight equal quarterly installments beginning 31⁄4 years after the date of each disbursement.
rcookie says to da58():Lending rate. The lending rate comprises (1) the market-determined Special Drawing Rights (SDR) interest rate—which has a minimum floor of 5 basis points—and a margin (currently 100 basis points), together known as the basic rate of charge, and (2) surcharges, which depend on the amount and time that credit is outstanding.
A surcharge of 200 basis points is paid on the amount of credit outstanding above 187.5 percent of quota. If credit remains above 187.5 percent of quota after three years, this surcharge rises to 300 basis points. These surcharges surcharges are designed to discourage large and prolonged use of IMF resources.
rcookie says to da58():Commitment fee. Resources committed under all SBAs are subject to a commitment fee levied at the beginning of each 12-month period on amounts that could be drawn in the period (15 basis points for committed amounts up to 115 percent of quota, 30 basis points on committed amounts above 115 percent and up to 575 percent of quota and 60 basis points on amounts exceeding 575 percent of quota).
These fees are refunded pro rata if the amounts are drawn during the course of the relevant period. As a result, if the country borrows the entire amount committed under an SBA, the commitment fee is fully refunded. However, no refund is made under a precautionary SBA under which countries do not draw.
rcookie says to da58():Service charge. A service charge of 50 basis points is applied on each amount drawn.
rcookie says to da58():that is directly from the imf sba fact sheet 2016......
jeffjane says to rcookie():Seems IRAQ would need to come out with a real rate very soon to build confidence before they need the loan
da58 says to rcookie():thanks for all of this.. sure clears some of the fog.. Rcookie, assuming they revalue, enter the global market - don't you think they would still have a need for some of this right away, to pump their infastructure into warp speed? Beyond the loans that are in place right now by not yet funded.. ?
imo - this seems like it would be more assurance to the success, long term success of Iraq.. the sooner that infastructure is in hi gear, the larger the income to the country.
Loop says():Borrowing terms. Access to IMF financial resources under SBAs is guided by a member country’s need for financing, capacity to repay, (y)
Loop says():capacity to repay,
Pablo says():Aren't they supposed to be repaying the oil companies starting next month?
R&R says():When a country borrows from the IMF, it agrees to ADJUST ITS ECONOMIC POLICIES to overcome the problems that led it to seek funding in the first place.
These commitments, including specific conditionality, are described in the member country’s LETTER OF INTENT (which often includes memorandum of economic and financial policies --- MEFP). <---- references the MOU, LOI, MEFP
R&R says():recall that Iraq tried to raise int'l capital on its own to the tune of $6 billion last year, but s****ped the plan on 10/11/15 due to "high yields" (interest rates were too high)
R&R says():We know they went to the "lender of last resort" the IMF to make up the shortfall, and hence, the LOI that was signed in December 2015 .... which told them what they had to accomplish to get an SBA
R&R says():They had their review with the IMF in Amman, Jordan yesterday with Alak, Saleh, Zebari, and other big wigs to discuss progress... looks like things are positive according to that article
rcookie says to da58():yes i do.....these are short term stop gap measures....
R&R says():Question is... what do they have to do prior to the April 15th IMF Spring Conference meeting, in order to get a "nod" that their request has preliminary approval to go before the Board in June?
R&R says():And, no, I am not implying RV necessarily
rcookie says to Pablo():yes $2 billion in april......
R&R says():But that LOI has benchmarks that must be met in order for them to obtain a loan approval (or even a preliminary approval)... two of them are "eliminating exchage rate distortions" and ending "multiple currency practices"....
rcookie says to R&R():meetcompliance with their smp...loi...and article iv consultation...
R&R says to rcookie():and it looks like they are on target (y)
rcookie says to R&R(10):they are absolutely on target and ready to accept article viii obligations.....
Pablo says():That being said, do you think they will be Article 8 by the 1st?
rcookie says to Pablo():youre not actually asking me to commit to their action by a specific date are you pablo.....
subgirl says to rcookie():lol
Pablo says():Merely asking your opinion. :)
R&R says to Pablo():what he said
Movack says():glad to see them finislly start cleaning up the banks
subgirl says to Movack():yes and to come down with only 1 auction a week is big!! IMO:)
subgirl says to Movack():good reading in the forum!
Movack says():concerns me tho with what the kurds are saying these days what you think
subgirl says to Movack():and what rcookie brot in about the IMF WOW!
rcookie says to Pablo():anyone remember what iraq was in breach of concerning article viiii in 2013...
subgirl says to Movack():well I think it will all come together! IMF has guides for Iraq!
Pablo says():I wasn't around back then.
subgirl says to Movack():rcookie just told us not long ago! UGH what was it?
Movack says():what imf piece you talking about so many these days
NWBeauty says():I always wondered what the penalty was for that breach....
rcookie says to NWBeauty():there was none!!!
NWBeauty says():they're in a 3year time-out
subgirl says to Movack():look in the logs when you have time. He brot in a bunch of news of what the IMF is saying...
rcookie says to NWBeauty():no...not at all...
NWBeauty says():I'm kidding They have been moving at lightening speed, esp for Arabs !!
larrykn says():I have a question because I didn't see the article that stated that Ababi was going to do it this week, does anyone have that article? please :)
NWBeauty says():I know we won't see this until June but I'm hoping it won't be x-mas AGAIN 7 in a row ...
clay says to NWBeauty():me too
subgirl says to NWBeauty():it wont be christmas and IMO I think it will be before june...
subgirl says to NWBeauty():that is my opinion...
NWBeauty says():woo-hoo!!! Praise Allah
rcookie says to NWBeauty():and there was no remedial actions taken or suggested...
subgirl says to NWBeauty():we have to keep watching IMF!!!
NWBeauty says():I just keep wondering WHEN our banks willl muster the confidence to deal with their currency ...
rcookie says to NWBeauty():the breach had to do with failure to report issues from section 5 of article viii....
Movack says():when it is on the forex lol
larrykn says to NWBeauty():when they go international
NWBeauty says():I could ask the boss to send me to Jordan, but ... I've still got an 11 y/o at home & widowed, so ...
NWBeauty says():RC - they either didn't KNOW or thought they were under the radarOR legitimately did not understand their role
NWBeauty says():PTSD from finding my husband (after IRaq & Suicide) now MINE I manage
NWBeauty says():I'm better It has been many years It doesn't go away really
NWBeauty says():RUNNING helps !!
NWBeauty says():I'm blessed because my health is good (Italian genes)
subgirl says to NWBeauty():well that is good! Keep on staying strong!!
rcookie says():no they were unable to get certain reports and requested data for analysis....and commited to strenghten its capacity to supply the required information in a timely and transparent manner....and provided technical assistance to do so....think about the imf metac workshop they just completed titled..."fiscal reporting &transparency march 13-16)...which was there 2nd workshop snce 2015 in the regard....
NWBeauty says():RC - something they really needed because I think the expertise just isn't there
NWBeauty says():and they can't feign ignorance any longer !!
David212 says to rcookie():I think that article 8 , multiple loans and the WB program to provide the ME a a $40 billion restructurng practice with Iraq being the foundation to build the ME fuutre on is huge. Having said that I, and others are not expects in their operating proceedures are know the only experts.
All the funding planned makes non experts worry if the impotance of a strong IQD currency is as urgent as it was 1yr ago. Vietname made an incredible annoucement today that there financials have blown the world away on the upside. wmawhite doesnt see a VNm RV because they are export driven.
Sorry back to Iraq is the need for an international strong single currencies still as critical to their econ growth, loan repayment capability , and diversification as ever? Everyone has said ann RV is independent of parliment, Shabibi, Sahr on and on but it has to because stability is still uncertain. Is this statement wrong.
NWBeauty says():well, power to the people and enlightenment to Parliament - are they named & seated? I have to go look....
da58 says to NWBeauty():no
da58 says():HYSTERICAL Loop!! (lol)
clay says to Loop():Where do I sign then (lol)