Member of the Committee on economy: Central Bank sales declined currency will help stabilize the exchange rate of the dinar against the dollar (Article posted at end of page)
SCALP: When they say stabalize the exchange rate I hope they mean decrease the exchange rate against the dollar :) Doesnt look good for shabby does it....selling currency in the auctions to fake companies
ZUL: Shab knew what he was doing. I think his plan was to pull as much dinar as possible from Iran and Syria..../ Nothing wrong with that.
But Maliki had other plans for both countries, who had given him shelter during his 20 yrs in exile. So under the pretext of halting money laundering, Maliki took over CBI. That's why we dont see any intervention from US, UN, IMF or World Bank,
So now, being at helm, his plan for Iran and Syria began to move or escalated. Suddenly we hear they are ready to replace the 250/1000 damaged notes, ready to delete 3 zeros in Jan 2013 and barely 2 week after Shab is gone, they already have in place "special equipment" to replace the damaged currency. ,
A revalued dinar would not only increases Iran and Syria foreign reserves but would also improves the value of their currencies. And this is what I think Maliki wants. I'm just thinking aloud..../ Peace.
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TLAR: Zul, not only was Shabibi buying a lot of dinar from a strapped Iran and Syria, but he was also cleaning up the Iraqi street. The fact that the dinar exchange temporarily fell while the banks reserves were the highest ever recorded in the history of Iraq is an interesting anamoly.
IMHO it actually created and fostered an environment that led to a faster switch from the dinar into dollars in the Middle East. I believe this was intentional and that the reduction in exchange rate excellarated the of sucking up of dinars.
The fact that the dinar lost around 10% in value actually was a plus for the CBI and an incentive for people to switch from dinars to dollars as they attempted to not lose value. Shabibi even allowed the average Iraq personally to switch out up to 5000 USD dollars worth of dinar at the banks.
I believe this too was to excellarate dinar being bought up by the bank and. Shabibi has been collecting the big notes since April of last year. If his intensions were to RV the currency by January of 2013 as he stated, then it seems very plasible that he would have to find ways to collect as much dinar as possible before this date.
We know he was buying 1189 dinars for each dollar he put on the street. One million US dollars sold at auction @ 1189 dinars per dollar is 1189,000,000 dinars. He was selling at numbers exceeding 275 million US dollars 5 days a week for quite a while.
We keep seeing the number 30 trillion dinar when referenced by the bank as to the amount of dinar out. I don't know what they mean by out.
Does it also count the dinars that have already been retrieved from the area. At one time Saleh had said ther were 4 trillion out in Iraq alone. He also said this in April of last year.
My question is and has been, if he has bought upto 275 million a day or 1.6 billion US dollars a week recently, how much of that must have come from the surrounding countries and not just Iraq? The only incentives for these kind of sales has to have been sanctions on Iran and Syria by the UN and by reducing the exchange rate.
The bank was able to pretty well clear out many of the trillions of dinar spread around. To me it looked like a well oiled plan with the UN assist by supplying the sanctions.
My point is this. Shabibi by allowing what amounts to as very little foriegn reserves to flow out of the bank would have had not much trouble repatriating these US dollars when the exchange rate was changed to 1 to 1.
The savings to Iraq would have been 1188 dinars that it had bought with each dollar. That's a great plan if that is what it is and would have reduced their money out significantly. Shabs did a great job and has laid the groundwork for an RV..
So as we hear the auctions were leaking USD to bad people or corrupt people, keep in mind that Shabibi's goal was to pull in as much dinar before an RV as possible. I still say if there was corruption it was from employees of the CBI and from outside sources unrelated to the CBI.
Either way it was a good thing for the bank, not a bad thing. I just hope Shabibi someday will get the recognition in Iraq that he deserves instead of the continuous drool coming from the State of Law and Dawa.
BLUEYESINLEVIS: Great synopsis/analysis , Tlar. I agree.. and I would make note of one of your major points.... yes... Shabibi wanted to pull as much Dinar as posible from the economy..
and as you noted, a lot of it came out of Iran and Syria... and that it is and was part of the plan all along.. the PTB wanted to scour the dinar from the bad guys BEFORE an RV.
Maybe Shabibi finished his work... and part of it was to take some phony blame?
Maybe he could not care less about getting the credit.
Maybe Switzerland is his new , comfortable home.... and the plan moves forward with Saleh and the others.
-With less Dinar in Iran to capitalize on it... an RV of Iraqs currency will CRIPPLE Iran in short order.
-The only way to acheive that goal was to put the sanctions on Iran..then do what Shabibi did... under the table.
BLUEYESINLEVIS: One thing, though.. if Iran and Syria already exchanged a lot of their IQD from the NEED to do so because of the sanctions.. and if they have little IQD left in reserve.. then a strong currency next door in Iraq will NOT be good for them.
-As the "lift the zeros" plan is implemented.. and IQD is taken in by the CBI.. and digital money and smart cards becomes the norm ... with a limited supply of Lower Denoms released to be used inside Iraq... and USD is gathered back in to the reserves of the CBI... it will get pretty tough on Iran and Syria.
USD will be much less available... IQD will be very valuable and increasingly digital... the neighbors will prosper with cars, tv's, jobs, etc.. it will be harder to keep the people down and the economy running.. especially with continuing UN sanctions. IMHO
SHAUND2073: Agree 100% blue eyes. I'm a stronger believer that this was all planned. I'm serious Shakespeare was right the world is just a stage and we have been entertained all along, consumed by every bit of information that has been coming out of Iraq .. Election time this week. It will be over soon. Time to go get my toilet paper out if the safety deposit box. Well it's already at Wells Fargo maybe I don't have to go far
Date: 2012-11-04 08: 14: 23 Sunday
Baghdad (newsletter) ... The ills of the economy and Investment Committee member of the National Alliance Deputy Ibrahim Al-Rikabi, the reasons for the decline of Central Bank dollar sales due to the dimensions of fictitious companies that buy large quantities of coins and Bank auction, assured that this decline will help stabilize the exchange rate of the dinar against the dollar.
Rikabi said (News News Agency): the reason the Central Bank sales declined currency back to the committees formed by the House which revealed violations in the sale of hard currency, Central Bank auction through shell companies and proportion (80%) You are buying the dollar in large quantities without an import for the country.
He continued: this has led to the depletion of foreign currency during the past period and because of the increase in the exchange rate of the dinar against the dollar, after detecting such operations fell from their evil plans in the process of dollar-buying from the auction.
He added: there is a significant role for the representative financial and economic committees to detect money laundering operations through field work matbabaatha Central Bank, noting that the decline in the sale of hard currency is positive because it would help stabilize the dinar exchange rate and maintain the balance of foreign currency for the country./finished/8 n. p