KAPERONI: I personally think this is a very good article...we see that the authorization has been given to raise the value..and it's in Turki's hand. It literally could raise in value at any moment.
BAGHDAD - Iraq News Network: parliamentary Finance Committee confirmed on Thursday that the situation of the Iraqi dinar against the U.S. dollar is stable, noting that raise the price against the dollar was possible.
A member of the Finance Committee secretary Hadi said that "the central bank administered by the new managed to control the situation and stabilize the exchange rate after witnessed tension during the crisis raised against the previous administration and suspicions of corruption that kept the bank governor and his deputy and a group of employees, but the situation this period has become more stable. "
He added that "the central bank governor received authorization to raise the price of the dinar safety of the dollar due to the fact that the option mentioned possible at the present time as well as the presence of the bank's intentions to raise the value of the Iraqi dinar long as previous years have seen a rise in value against the dollar."
Read More Link On Right
He pointed out that "the central bank governor will have the option under this authorization in choosing the appropriate time to raise the price of the dinar and it will determine when and how this step is done based on his experience in his field." LINK
CARRELLO: Thank you Kap!!! This sounds great and indicates a new vision for Maliki and the value of the dinar.
"...and it will determine when and how this step is done based on his experience in his field." If this is true, I hope Turki picks a life line.
Turki is Maliki's hand puppet. Is Maliki finally realizing he is in an extremely perilous position and ready to be pushed off the cliff at Dictator's Point?
Will revaluing the currency make him a hero again in the eyes of the people? Or has the IMF and US had their come to Jesus moment with Maliki and leading him around by the collar telling him what is going to take place and when?
We, the IMF and US will let you, Maliki, save face and stay in office until the end of your term, but here is the only condition ........ behave. The Iran counterfeiting is openly exposed as we saw this morning and is probably coming to a close, so what does Maliki have to offer Iran? More sand and camels?
No matter the questions, this looks wonderful. Right now I would sell my first born, if I had one, to sit in the IMF meeting in Jordan today and just take it all in.
ENORRSTE: I agree 100% with Kaperoni. It seems evident now that the World Bank/IMF/UN have put significant pressure on Maliki to keep his hands out of the issue.
Notice also that the Finance Committee of PARLIAMENT has stepped back to the forefront where they belong.
The article that we read the other night in which the World Bank stated unequivocally that the GOI was to stay out of the business of the CBI obviously carried some weight.
Then it was backed up the next day by the IMF and the UN reminded the GOI that Iraq is still under Chapter VII, meaning that the UN can step in any time it wants. Add to that, finally, the fact that US troops are now back in Iraq and you can see that the "squeeze play" on Maliki is beginning to bear fruit.
Recall also that we are aware that a contract was signed last September. The CBI is committed to this process and I believe it will be shown shortly that this recent debacle is only a temporary setback. I also believe that January 1 is a key date.' Enorrste
BLUEYESINLEVIS: Remember that the UNSC meets soon... and on the 17th Iraq / Kuwait is on their agenda. It is possible that lifting the rate is a precursor to release from chapter 7.. not an official requirement... but an advisement from the UN behind the scenes. ?
KAPERONI: There is a press release on the Arabic side of the CBI pertaining to this information. I sent it to the translator. Will post when I get it back.
Press Release on the decision of the Board of Directors of this Bank of many decisions in the framework of the keenness and the pursuit of the Central Bank of Iraq in the development of his tools in the monetary policy and support the national economy stable market 12/11/2012
Here is from the Arabic translator....
Hi Kap, This is a three clause decision by the Iraqi Central Bank on 12/6/12
- The first and second clauses are meant to encourage the approved banks and currency exchange institutions to increase their engagement in the so called US$ exchange auctions and increase their weekly allotments.
- The third clause allows the Governor of the Central Bank to shore up the value of the ID by decreasing the current 1,179 ID vs. the US$ (it does not specify by how much) in accordance with the market's demand..
It seems to be an internal memo (among government agencies and the banks/exchange institutions)..
ART: professor (Enorrste) you are right on target this is what i have believed right along......sticking my neck out a little i wouldnt be supprised if they came out at .86 then float the currency
it would be more understandable to the average iraqu in doing day to day business and encourage them to use the dinar....neck out a little farther possible reinstatement of shabibi ...in addition it would give the dinar immediate useable value to be applied to the huge backlog of projects and investmates and investors jmo thanks to everyone for this great intell
granted shabibi being reinstated is a long shot but i do believe because of shabibis reputation he has been in constant contact with the big money players and has devulged much on miliki the thug to the powers that matter and may be in fact heavlly involved in the current actions taking place in the cbi
REVBO: "the central bank governor received authorization to raise the price of the dinar safety of the dollar..."
What I like most about this statement is, there's absolutely nothing lop-ish about it. Usually, these kind of statements are qualified with some kind of "delete three zeros" or "mbangamesh" gobbledygook nonsense nearby that seems like it was only tossed in there to mess with our heads. Nothing like that in this article. Raise the value. Plain. Simple. Straightforward. Now, freakin' do it, Turki.
MUSTANG: You are very precise in your words. Enorrste ,,, My Question if you could answer please..
With the Authorization being handed to the Governor of the CBI Which is Dr. Shabibi do you think he will wait till after the election to pull the trigger ,, this way insuring that Maliki is out...and can do less harm to the people of Iraq,,, Or would he risk his own people? Thank you in advance. and many Blessings on you.
CARRELLO: I hope they don't wait for the election because Maliki won't be out until 2014.
Although Dr. Shabibi did not get to pull the final lever, I think in a way he is, and for that I would be glad as he has done so much for the improvement of Iraq.
I believe he is still heavily involved in this process, walking hand in hand with the IMF, and has been for years.....since the beggining of the plan. I would think that the good Dr. would be in great demand as a consultant for financial institutions and governments around the world and at a very fine consultation fee.
TLAR: Every article that I've indicates to me that they are authorizing the CBI to adjust the program rate. I think they will move the rate down which in and of itself is great. I think they will see if they can hold and support the dinar at the new level for a period, then adjust it again.
This is not to argue with you Kap or the professor but I fail to see where any of the articles suggest a float. I just see them saying it is to the CBI to say when and how much.
The how much to me implies that it will be a fixed rate not a float necessarily, because with a float the how much is determined by the market and is an unknown.
At best I think they will move the dinar a couple of hundred pips. I would love to see them do either because it most likely means no lop. If they move the rate to 1000 to 1, the LOP may again plaque this investment as a possibility.
If they move the rate either more or less than 1000 to 1 to me would most likely exclude the possibilty of a LOP because the rate would take at least an additional step to be 1 to 1. We are all just speculating. I hope we have the answer shortly. IMHO.
KAPERONI: tlar, there are many references in recent months of a float. Here is one from yesterday...
"the Board of Directors authorized the Iraqi Central Bank Governor the power to reduce the sale price of the dollar and of 1179 dinars to the dollar to enhance the value of the Iraqi dinar based on market demands."
If you read that carefully they are giving Turki the authority to free float the currency...How do I know? Look at this explination from the Arab Monetary Fund this summer...
"He Alkrasna adopt all of Iraq, Tunisia, Algeria, Mauritania and Sudan system "floating orbit of exchange", where value is determined currency in the market, according to the forces of supply and demand, and the government to intervene when necessary to re-route the exchange rate, in line with a set of criteria including the status of the current account and currency reserves foreign, depends both Egypt and Yemen floating exchange system.
He pointed out that "free-floating" leaves the freedom of exchange rate change continuously over time, consistent with market forces, and only the intervention of the authorities in this case to influence the pace of change in the exchange rate only, and not to limit that change.
Now here is where this gets good...
"He pointed out that "free-floating" leaves the freedom of exchange rate change continuously over time, consistent with market forces, and only the intervention of the authorities in this case to influence the pace of change in the exchange rate only, and not to limit that change. "
The bottom line is Iraq can make a lot of money with a float. The process "intervention" above means they will play in the game along with the global banks/speculators. The way they control "pace" is to increase or decrease liquidity in the market.
That is achieved by the CBI purchasing (remove) or selling (releasing) there own currency. In other words, they make money as the dinar rises. Something that they would be foolish not to play in. IMO, That is why this is not a RV but a free float.
ROCKINRICH: tlar i found a couple quotes from an article posted the other day heres the first The Bank said it had also decided to "authorize the Central Bank to reduce the selling price of the dollar at present 1179 dinars to the dollar, saying that" the aim of this is to promote the value of Iraqi dinar according to market requirements.
and the second quote,Central Bank of Iraq, Tuesday, allowing Iraqi banks to open documentary Alaatmadt, while also decided to increase the share of the weekly auction and given to the exchange companies and money transfer, also adopted a resolution authorizing the Governor of the Bank to reduce the sale price of the dollar as the market demands.
now the words they use "market requirements" and "market demands" wouldn't that indicate a float somehow?
TLAR: I yield to the class. It's going to be a float with no chance of a LOP. Woo hoo. Now I'm officially one of you. Kap nice argument. Rockinrich, you to. TallBaldFat, uh huh.
TLAR: rockinrich, I didn't take your response as sarcastic at all, in fact I respect both your thoughts and Kaps. Both are good arguments well supported.
As far as the term "market demands" goes, I concede that this could mean a float. I don't think so though. That term could also mean that the market now demands a stronger dinar.
The study in 2008 that was done for the CBI specifically states that the CBI could support the dinar at $1.13. It also suggests that they hold it at that rate and support it for 2 years before they let it go to a float and let it drift to wherever it is to go.
The test that the IMF requested of the CBI through 2009 was to do the exact same thing. Hold the rate at 1170. Don't let it fluctuate up or down. Shabibi appeared to be following this plan to a T until Maliki waylaid not only the plan but Shabibi himself.
The IMF supported this plan back in 2008 and I believe they are still behind it, albeit a little more cautious due to the problems with Maliki and the government.
I said yesterday that I believe that our Treasury and the IMF are the driving force behind the CBI. I also think that there are many articles that support this supposition.
I think they, the IMF and our Treasury, also got shocked by the sudden unexpected release of Shabibi just as we were. It came out of left field.
My personal belief, is that they will test the support level of the dinar before it is ever released to float in the market.
I believe this in particular because at best, Turki is an unknown. Moving the auctions to the other banks, backing the LOC's by the CBI, the CBI being charged with the timing and the amount all suggest to me that this will be a fixed movement in the program rate..
These are my thoughts only. No one has an absolute lock on when or how or how much any currency change will be. Certainly not me. If I'm off base then so be it. Speculation is just that. It is speculation