6-21-2012 Scooter-EG: I hope these banks are now ready to reboot. They like June 30 for some reason, not certain exactly why that is. This is a major structural benchmark for the Iraqis. HUGE IMO.
It's been on the list of things to complete sinced the 2006 MOU (Memo of Understanding).
They had so many accounts out of control it was terrible. Ernst and Young reported it was the worst case of a bank audit they had ever seen but that was back in 2007. Too much corruption, too many open accounts all over the world.
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Imagine if you take those two government banks that do over 85% of all the countries transactions and you now clean the books up and Re-Value/Devalue their assets, they've essentially changed the valuation of the whole country and that to me is a starting point.
I see many changes in 2013. The part that I liked was the line that discussed the new currency. It translated weird -- but it's very intriguing to see the timing and release of this information from the council of ministers.
They will deploy a HYBRID solution, they will introduce the lower notes and methodically suck in the larger notes. While at the same time increasing their CPI values of products and goods.
The real question will be their economy and how well they diversify and begin their primary bond market.
Those will determine the sustainabilty of any rate. If you remember the World Bank reform program for Iraq concludes in October of 2013.
So, I can see them start to introduce the new notes in 1st or 2nd quarter of 2013 and start the process. It could be sooner than that if they have the printing presses rockin those notes out.