BondLady] Good afternoon Bondlady's corner !! Ms timmy Shredd and I have been working hard in our research for our members and we want to keep every one up to date and informed as much as possible in this investment.
We are not about rumors or intel we deal only in fact and it doesn't get much better than the facts were about to bring to our members by our most awesome team so without further ado here we go...please know this is long and will require reading and thinking
[BondLady] lets begin:
[BondLady] IMF Mission Concludes Article IV Discussions with Iraq Press Release No. 13/87 March 21, 2013 An International Monetary Fund (IMF) mission, led by Mr. Carlo Sdralevich, met with an official Iraqi delegation headed by the Acting Minister of Finance, Dr. Ali Al Shukri, in Amman, Jordan, during March 2-12, 2013 to conduct the Article IV Consultation discussion.
The IMF mission met with the Acting Minister of Finance, the Acting Governor of the Central Bank of Iraq (CBI), head of the Board of Supreme Audit, AbdulBasit Al Turki Said, and other Iraqi officials from the ministries of finance, planning, and oil, and representatives from the Central Bank and the Board of Supreme Audit.
The team also met with representatives from the Iraqi banking and business community. At the conclusion of the mission, Mr. Sdralevich made the following statement: “Following the recent expiration of the Stand-By Arrangement with Iraq approved in 2010, the IMF is committed to continue close collaboration with Iraq to support its development and help the government improve the social conditions and employment opportunities of Iraqi citizens.
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“Despite a difficult security and political environment, Iraq managed to maintain macroeconomic stability over the past two years. On the back of rising oil production and robust non-oil activity, economic growth has remained strong at about 8 percent in 2012.
We expect activity to accelerate further to 9 percent in 2013, as oil production increases from just under 3 million barrels per day (mbpd) in 2012 to 3.3 mbpd in 2013. In 2012, inflation was contained at 6 percent, and we project it to decline slightly next year. On account of strong oil proceeds, CBI reserves reached US$70 billion at the end of 2012, while the Development Fund for Iraq (DFI) rose to US$18 billion.
[BondLady] this document comes straight from the IMF and its discussing article 4 of the IMF. This round table discussion is open now anytime your ready timmy and shredd and thank you both for helping me and our members
[BondLady] nice line up for this meeting huh
[Shredd] first of all, it was nice to see from the IMF that "Following the recent expiration of the Stand-By Arrangement ..."
[tlm724] confirms the conclusion
[Shredd] so I know some have questioned that so let's put that to bed
[BondLady] we felt like it had expired but there wasn't anything in print before now
[Shredd] a very encouraging summary by the IMF followes: Iraq managed to maintain macroeconomic stability over the past two years and "rising non-oil activity"
[BondLady] We expect activity to accelerate further to 9 percent in 2013, as oil production increases from just under 3 million barrels per day (mbpd) in 2012 to 3.3 mbpd in 2013.
[Shredd] right again, perfect confirmation of Iraq's strength.....from the IMF!
[tlm724] thats the big dogs
[BondLady] and inflation has been kept in check also due to the monetary policy, inflation was contained at 6 percent, and we project it to decline slightly next year. I also wanted to conclude this last part of the paragraph above" CBI reserves reached US$70 billion at the end of 2012, while the Development Fund for Iraq (DFI) rose to US$18 billion". so the CBI has 70 billion in reserves and 18 billion in the dfi fund 88 billion, huge reserves for sure
[Shredd] yes, that's not a LOP country with those kind of reserves
[BondLady] While we welcome the achievement of a budget surplus of about 4 percent of GDP in 2012, largely due higher-than expected oil revenues, the execution of the 2013 budget should be aligned with available financing and provide for the accumulation of adequate fiscal buffers in the DFI, which suggests to target a budget surplus in 2013.
Public financial management should be strengthened, notably by phasing out off-budgetary spending practices and reliance on state-owned bank financing to support public enterprises. Approval of additional spending commitments during the fiscal year should also be avoided.
“Financial sector policies are improving, but more remains to be done. The CBI’s ongoing efforts to refine monetary policy instruments, strengthen banking supervision, and accelerate the restructuring of the banking system are crucial. In this respect, the recent steps to clean up the balance sheets of Rasheed and Rafidain in preparation for their restructuring and recapitalization are key.
The CBI should also take measures to gradually liberalize the provision of foreign exchange through its auctions, with the objective of avoiding in future the turbulence experienced by the market in the past year. “Iraq will need to address serious medium-term challenges in order to be able to create the conditions for high and sustainable growth that is necessary to improve the living standards of its people.
The economy continues to suffer from severe structural weaknesses such as a small nonoil sector, high unemployment, public sector dominance, and a weak business environment. In this context, we discussed the role of economic policies in leveraging Iraq’s potential and creating an enabling environment.
[Shredd] next we see goals: phasing out off-budgetary spending practices and reliance on state-owned bank financing to support public enterprises "reliance on state-owned bank financing" so, just like I've been saying,,,,moving to the public enterprise for financing a recognized goal from the IMF and nice confirmation of what we have been watching for and another goal here: The CBI’s ongoing efforts to refine monetary policy instruments, strengthen banking supervision, and accelerate the restructuring of the banking system are crucial
[tlm724] the thing I find most encouraging in this statement is this : IMF Mission Concludes Article IV Discussions with Iraq " clearly stating imo that the discussions are over and the mission is ending and when we look at Article 4 of the IMF we will see the significance of this .
[BondLady] ***The CBI should also take measures to gradually liberalize the provision of foreign exchange through its auctions, with the objective of avoiding in future the turbulence experienced by the market in the past year. *** the run on the usd in iraq,
they dont want all this crazy up and down , they want the iraq dinar to stableize and**********to create the conditions for high and sustainable growth that is necessary to improve the living standards of its people.******
they do need to make the peoples lives better by giving them a currency to be proud of, as much as they love the usd, its only because of the purchasing power, they would love to use there own currency to buy things with, and the imf is telling them, they do need to do something per this IMO
[Shredd] yes, that is the biggie in this portion!! taking measures to gradually liberalize the provision of foreign exchange via auctions
[BondLady] also ******The economy continues to suffer from severe structural weaknesses ***** pass that infrastructure law and other countries will flock in and help them rebuild much of this as well
[Shredd] yes and I' know we've talked about it recently in another chat,
[BondLady] yes we have shredd. The economy continues to suffer from severe structural weaknesses
[Shredd] but the demand and gap between the dollar and dinar can't swing too far between pricing and official rate.....before it pushes a rate change the "gradually liberalize" is very interesting here
[BondLady] slow grow ? or is that whats been done
[Shredd] seems to imply, perhaps
[BondLady] like set it to 1000 then float?
[Shredd] the context says.... the CBI should take measures to gradually liberalize, yes, i believe so
[Shredd] a continued managing via pipping it up
[Shredd] i mean, the last word we have from the CBI themselves is what? 1000 to 1 right?
[BondLady] yes, a managed float
[Shredd] so, horse's mouth
[BondLady] and that seems most right to me
[Shredd] but hold on folks, because when we get into Ariticle IV, you will see what we are saying!!!! One last comment on this paragraph. In this context, we discussed the role of economic policies in leveraging Iraq’s potential and creating an enabling environment.
[BondLady] yes and timmy will bring in those paragraphs when were through with this article
[Shredd] i love this line "leveraging Iraq's potential" i believe an "enabling environment"
[BondLady] and iraqs potential as we know is so massive
[Shredd] includes a strong dinar that is the goal. yes, massive
[BondLady] With regard to the fiscal sector, the budget must be managed carefully to maintain macroeconomic stability, meet Iraq’s large social and investment needs while continuing to accumulate buffers to address oil market volatility, and ensure medium-term fiscal sustainability.
At the same time, Iraq needs to strengthen fiscal institutions and public financial management to make sure that the large oil revenues are used effectively and transparently. “Developing a stronger financial sector development will require moving away from the current model in which weak state-owned banks dominate the financial sector and enjoy favorable treatment vis-a-vis private banks.
A solid banking system that can support growth and employment will require the full financial and operational restructuring of state-owned banks and creating a level playing field for both private and public banks.
“Finally, while oil-growth is projected to remain high over the coming years, boosting non-oil private sector growth will need a long-term government strategy centered on improving the business environment and opening up opportunities for the private sector.”
[Shredd] key part for me in this paragraph: Developing a stronger financial sector development will require moving away from the current model in which weak state-owned banks dominate the financial sector and enjoy favorable treatment vis-a-vis private banks.
I realize this may be a bit for some to fully appreciate, but the wheels of an economy is at the street level private bank lending. rewind to last fall when the banking and investment conference took place... so much groundwork has been laid for the economic sector within Iraq be alive and well in the hands of a safe and transparent private banking sector, why? because that gives confidence to the people lastly, it says high oil growth will boost non-oil private sector growth
[tlm724] We see the committee's and economist's calling for a free market economy daily in the articles which will grow the non-oil sector and create employment ,build infrastructure etc... and the WTO also calling for free market economy
[BondLady] you bet timmy
[Shredd] yes,the massive power source of oil will boost the private economy