AdminBob: 27 May, 2013 The Central Bank announced the sale of $ 263 million at auction for buying and selling foreign currency.
The Bulletin of the aggregate demand Bank auction for dollars distributed by 72425000 million in cash and $ 190, 666, 000 million dollars in foreign remittances covered the entire Bank exchange rate reached 1179 dinars to the dollar, including the Central Bank Commission 13 dinars to the dollar, while the cash purchase price of $ 1171 DT.
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This is the Iraqi Central Bank sales of the dollar in the first meetings of the week low compared with 282701000 million dollars recorded at the last session last Thursday.
Dr. Nan: Thanks, Bob! "Life is a series of new beginnings!"
ZenMav: Like it or not, the CBI is buying back dinar from Iran & Syria. The merchants won't accept the dinar for payment, so the only business that dinar from Iran & Syria has inside Iraq is to be exchanged for USD and smuggled out.
And, the spigot is wide open, Iranian dinar coming in a fast as possible. I suspect that we will see a dramatic drop in the auctions once the Iranian supply of authentic IQD has run out, a drop commensurate with what is actually required to run Iraq, not an amount required to keep two pariah states afloat. Who has the latest tally for the auctions in May? Tripp? OOTW? BlueyesinLevis?
Tlar: You are correct Zen. An argument could also be made that there is a mixture of both good dinar and counterfeit dinar being brought into the country, and at these levels that could be a massive problem right around the corner.
If this current scenario continues for any long period of time it also potentially could cause damage to Iraq's economy. Theoretically the CBI is sucking in almost all of the good non counterfeit dinars only. The bad stuff is left circulating in the market because it would be confiscated if presented to the bank..
If this goes on a lot longer, eventually the CBI would have bought most all the good dinar and most of the currency left circulating will be the bad dinar.
This presents itself as what should be another major problem for the CBI in that if they were to delete the zeros, a lot of the circulating dinar would become immediately worthless because it is counterfeit, and would not be able to be traded in for the new lower denoms.
The damage to the average Iraqi holding these bogus bills is obvious because Iraq is predominately still a cash society. It would be the same as someone telling you that the money you think you have is bogus and worthless and you find out you are broke overnight.
I would hope that the CBI understands this and does not take too long to make a move so as not to exacerbate this problem any worse than it already is. In this case what the CBI may think of as the cure long term itself, could have some very nasty side effects.
Kaperoni: Tlar, this is a very good point and is a huge problem. As you said, it ends up being circulated amongst neighborhoods, tribes, etc. And they know it is counterfeit. Yet, as long as it remains, it is of value to them.
These are the very same neighborhoods, or tribes that are very vocal against the plan of changing of the currency because they know those dinars cannot be removed from circulation or they lose their wealth. That pressure appears to be winning at the moment.