Kaperoni: Governor of the Central Bank: Bank reserves exceed 80 billion dollars by the end of July
06/13/2013 - 15:11 Author: Ahmad Valley, Muhannad Muhammad
Central Bank Governor Abdul Basit Turki Alsumaria News / Baghdad
The Central Bank Governor agency Abdul Basit Turki, the bank reserves will exceed $ 80 billion at the end of next July, indicating that there is a review of the development of mechanisms to use for this reserve bank, regardless of the existence of the current government or not for specific purposes.
Turki said the program "brackets" which aired on "Alsumaria", "The Central Bank reserves now of money and gold exceeded $ 75 billion," he said, adding that "the Bank reserves will exceed $ 80 billion by the end of next July."
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Turki added that "bank reserves with the end of the year 2013 will exceed this figure much," pointing out that "Iraq's gold reserves managed by the Bank for International Settlements in Switzerland."
The central bank governor that "under current law, the bank can not contribute one dollar in support of the government," adding that "there is a review of the development of mechanisms to use the bank to the reserve, regardless of the existence of the current government or not for specific purposes."
A banking source was early in the detector (11 May 2013), that the size of the Iraqi Central Bank reserves of foreign currency amounted to $ 74 billion, noting that it is the highest achieved by the bank reserves in the country's history.
It is noteworthy that the central bank refused, (the fifth of May 2009), the government's efforts to borrow from the Reserve Bank's funds to meet the shortfall in the budget, arguing that such a step contrary to the law and a violation of the independence of the bank.
It is noteworthy that the central bank adviser appearance of Mohammed Saleh confirmed, in May 2009, that Iraq's stockpile of money liquidity has covered over the years, and so is out of the financial power of the government.
Calling for the adoption of alternative ways to cover the deficit, including recourse to the application of secondary-market policies that have been agreed upon with the government. LINK
Punisher: Holy cow, RV already. Soon it will be 100 Billion.
Bglong: Wow. And no debt to speak of, or at least to worry about since the US has extended the protection of her funds.
Tgirl: The Governor of the Central Bank: the Bank reserves would exceed $ 80 billion at the end of July
1 hour 46 min
Central Bank Governor Abdel Basset Turki Agency, Bank reserves would exceed $ 80 billion at the end of July next year
He said in a press statement today that the Central Bank now reserve funds and gold exceeded $ 75 billion that the Bank's reserves would exceed $ 80 billion by the end of next month
The Reserve Bank with the end of the year 2013 will exceed this number much pointing out that "Iraq's gold reserve is managed by the Bank for international settlements in Switzerland
Central Bank Governor explained that under current law the Bank can't contribute $ 1 to support the Government, noting that there is a review of the mechanisms for the use of the Reserve Bank regardless of whether the current Government for specific purposes. LINK
I report...you decide.
bye the sea: $80 Billion in reserves with a published currency rate of 1/12 of a penny, and a street rate of almost 1/14th of a penny. Sounds logical to me........NOT!
Tlar: Part one
They are continuing to build the reserves. If this were just to build the reserves and that was the end goal, to continue stockpiling cash reserves, this ultimately will hurt the economy.
The bank cannot continue to suck cash out of the economy at this rate.
The shear fact that they are continuing to stockpile money that they admittedly in this article say they will not spend one dollar on the government or their projects, should convince the most skeptical of speculators that either the bank is on a mission to end up with all the money in Iraq or that the bank must have a plan that includes the neutralization of this asset.
That neutralization can only come from a drastic increase in the value of the dinar. Fractional banking although not uniformly applied, is generally between 1.5% and 10%.
It depends on a number of different factors. Irag would probably fall somewhere below 10% because of the valuation of their oil and gold reserves. As the CBI continues to stock pile their reserves (x), they are also reducing the number of dinars in circulation (y).
There is a point at which the x and y lines must cross which will be the trigger point. If they cross this line and they still have not changed the value of their currency, the CBI will begin to take on an adversarial position to the Iraqi economy. It is another point of convergence.
Corvetteman: thanks tlar,
Drsuzn: Good to have you back, tlar. Excellent explanation of another point of convergence, a more poetic way of saying that numerous factors are coming together. I am so thankful for the intelligent moderators and members of Dinaralert. May we all do noble acts with the bounty at hand.
Corvetteman : drsuzn, that was nice of you to say!!
Tlar: Part two.
The CBI's plan must be to raise the value at the convergence point. The 80 billion that the CBI is anticipating the value of the reserves by the end of next July, meaning about a month and a half from, now even at 10% fractional banking would cover 800 billion in real USD terms.
Iraq started this mission to buy dinars back months ago now. Their estimates when they started was that the total number of dinar ever let out was approximately 30 trillion of which 4 trillion were circulating in Iraq (stated by Saleh first part 2012).
We know they have been buying back trillions since October of 2012 when the rate disparage first appeared.
I thought at the time when this first started, that this disparity was intentionally caused by the CBI as part of a plan to motivate the population and Syria and Iran to sell their dinars for dollars back to the bank cheaper than they paid for them. This created an under the table profit on the buy back..
I still believe that the bank was behind this move but it may now be that they have set a fire that they have lost control of.
Their intention in Oct of last year, IMO was to repatriate the dinar from Syria and Iran and as much as they could from Iraqi citizens, and I stated at that time that I did not believe they could enhance the value of the dinar until the dinar stock piles in these rouge two countries were significantly reduced.
What was not anticipated was the length to which these countries would go to maintain their lifeline to the Iraqi economy. Counterfeiting has played a much bigger part then either the CBI or the international community had anticipated as we have seen.
I believe this latest push to get most of the rest of the dinars is a joint plan by the CBI and the IMF.
This will not go on long. At a burn rate of 300 million a day USD being flooded into the market and the banks non acceptance of counterfeit currency it will become very apparent that the circulating counterfeit bills will be less and less acceptable by the average Iraqi out of fear that what little dinar left in circulation is counterfeit.
Odds are they will pretty much discontinue using dinar altogether and just use USD out of safety. Shops are already beginning to take a hard look as to whether they wand to use dinar instead of USD. IMHO that will become the norm not the exception.
I will print part three later today. I just returned from vacation and have a lot of catching up to do.
TallBaldFat: Welcome back Tlar... you are an asset to the team and provide a fresh perspective to the rest of the team. We all look forward to all of the analysis that you, Kap, Steve, and all the rest provide. I for one cannot help to feel that this total dollarization is a good thing.
Loosing confidence in your own currency is usually a bad thing but on the doorstep of a float, it is the best thing possible. The citizens will regain confidence after the float when they see the international community embracing the Dinar and watch its value rise day to day.
I don't believe the smart ones will wait until it is on par with the dollar to start using the Dinar again. If they see it rising every day, they will see the potential for proffit just like they saw in the dollar. My Hopeium pipe is full and burning bright. I know that upsets Joeg but I'm sure he will deal with it ok.
If it doesn't, happen soon, I will be surprised (sort of). To many good things comming to a head for this to go on mutch longer. I would hate to see that Joeg was right after all but stranger things could and have happend.
When this thing happens, I'm going to buy all of the Negitive Nellies a cookie.
I'm ready to toss my Hopeium Pipe in the trash and exchange it for my Floatium Pipe.
BelievingInTheBest: Welcome back tlar. Thank you for your insight. Seems like they could have a concern on their hands if that convergence point falls during Ramadan or some time during the middle of a financial quarter.
These times would be highly likely as Ramadan is a month long and the quarters only begin every three months. Could they have an estimated date in mind where these two points will converge?
With the number of variables in play, how much control can we believe that they might have over the timing? Will they say, forget the financial quarters and just act when the numbers come together? Or could they be at the point now and are just aligning things for a July move?
Just some questions that come to my mind and I imagine others might have similar thoughts.
Again, thank you to everyone who contribute to all of our understanding. Kap, Bob and you moderators, a special appreciation for all you do.
Punisher: Yes, things to seem to be coming to some kind of head...maybe not a conclusion, but a head...which is good :) And welcome back Tlar :)
Russ: Thanks tlar, that's full Dollarisation of Iraq......Three zeros deleted on the street.......Now time to bring the IQD value up to match. :)
BNA13: Lemme see. Shabibi; 10 years, $68B in reserves Turki; 9 months (in July), $12B more
Shabibi; stable exchange rate, dinar grows in value Turki; dinar tanks.
Turki has already been accused of putting CBI profit over the needs of the people. Now he's doin' the Ickey Shuffle when his team is down 42 zip.
Russ: This is way bigger than Shabibi and Turki......
Corvetteman: Russ-I think you are wright,I think the BIG boys are tired of all the BS and told them to do it,
Punisher: This entire thing with Kuwait is playing a huge role imho.
Russ: Shabs and the Turki are Project Managers. They manage, measure, report, and impliment the Project Owners requests. They are clever people and their expertise is critical to a successful completed on time project. But they are still just employees. My opinion is that Turki is more a figure head at this stage of the game.
Russ: Punisher..Kuwait is just another component in the reconstruction of Iraq. Just as revaluing the IQD, is another part. All have their place in the big picture and will be handled in the right sequence and timeframe. You cannot put the roof on a house until the walls are up!
The problem is that sometimes it rains and your project can get delayed through events beyond the P Managers control.
OutOfTheWoods: BNA13, I would just like to add that the integrity committee has "called in" every governmental post holder's financial records. So far, Turki has not handed his in and they were due two days ago. Could turn out he handed it in late..we'll see.
"Faith consists in believing when it is beyond the power of reason to believe." Voltaire
Punisher: Russ, I know it is part of the BIG picture ;) Outofthewoods, what significance does that hold?
Recaps Note: As of the time of posting this Tlar had not posted his Part 3 - We will get posted as soon as he delivers his Part 3 thoughts - Thank you