CBI auction continues to decrease the value of sales Tuesday, April 2, 2013 16:38
"The sale price of the dollar stood at" 1179 "dinars, including the central bank and the commission of" 13 "dinars per dollar." Finished / 21 FULL ARTICLE & LINK BELOW
"The dinar is more poised today for a higher rate than ever before."
TLAR: About two weeks ago it dipped down to 85 million. The auctions as this article says, are trending down. It is good for us because the more dollars that are sold into Iraq, the more the saturation. At some point these auctions will be selling very few dollars because the street will be using USD almost exclusively and have reached that saturation point..
IMHO two things are absolutely necessary for any kind of major increase in the value of the dinar. The first is as I've stated, the CBI has to have bought enough dinars that Iran and Syria are no longer considered the potential problem by the international community that they were.
I believe that is mission accomplished because of the CBI's recent moves in an attempt to bring the street value back in line with the program rate. If they wanted to extract more dinars they would be better off leaving the disparity in the rates for now.
Read More Link On Right
This is what has caused all the selling of dinar and the buying of USD. The CBI is once again trying to take back control of the street rate. Article after article has shown us that they intend to raise the street value. Their goal is strickly bring the two rates back to equilibrium.
The second thing we should see is a continuing drop of the auctions. The auctions will drop due to the three changes we have seen the CBI make recently. The first is for the CBI to control the amount of USD sold at auction to what is determined only to be needed by Iraq.
The second change is to control who these bidders (25 banks) at auction sell the USD to. The third is to break the back of the money changers on the street. They will accomplish this by making USD convenient for the average Iraqi, selling the dinar direct to the end user at the program rate of 1166.
The street vendors have been getting 1280 per dollar. By selling the dinar direct, bypassing the street vendor, at a much reduced rate to the average Iraqi, the street vendor will either start to sell at the program rate or they will go out of business.
Given the product is the same, all people will gravitate to the lower price in a short period of time. In other words, these actions are all designed to bring the two rates to 1166 and totally under CBI control.
When these things actually take effect on the currency, we start to see the dollar auctions drop significantly, the stage will be set for the CBI to be able to do what they want with the currency. The dinar is more poised today for a higher rate than ever before.
There is less dinar out today IMHO given the new higher oil revenues than there was in 2008 when the study was done for the CBI showing Iraq could support the dinar at $1.13. These things tell me that the stage is being set and that there will be an RV as the first change we see to the currency. not a float.
I know this is a different opinion that Kap and Erronste. It's my gut feel based on what we see the CBI doing today. Everything that the CBI is doing makes excellent sense if they are prepping for a major change in the value of the dinar..
TLAR CONTINUES: I think that the Shabibi plan of 1 to 1 is still on the table. I have thought all along that once the dinar was repatriated from Syria and Iran that we would not see any attempt to bring the street rate and the program rate back to 1166.
Now that they are taking steps to bring the rates together it says two things to me. The first is that they've collected enough dinar or at least what they were hoping to get. Two, it says to me that the CBI could have implemented the recent changes at anytime which says to me that they were in control all the way through.
In fact they took an enormous bunch of flak, because they did not do anything about the rate disparity for months. Taking it a step further I would go as far to say that the disparity was no accident.
The CBI through their inaction to support the dinar over the last 7 months, actually incouraged the disparity. For good reason. They were working in concert with the UN to get the massive amounts of dinar out of the two rouge states.
Without the disparity in rates the dinar would not have been pouring back into the CBI in the trillions that it did as fast as it did. The incentive to buy dollars by Syria and Iran and the Iraqi street was this disparity. The CBI could have stopped it from the get go but IMHO they chose to let it go.
I would also like to make a minor prediction here. I think that because of the recent changes by the CBI, we will see the rates come together very quickly allowing the CBI to control both rates again.
This IMHO opens up the possibility of a currency change in the current. year. Two things I think are important to watch for.
1. How fast the rates come back together and
2. how quickly the auctions start to drop.
IMO, with these changes the process to see the effects of these three changes will take a month or less. .
FULL ARTICLE & LINK
CBI Auction Continues To Decrease The Value Of Sales Tuesday, April 2, 2013 16:38
BAGHDAD / Baghdadiya News / .. auction session saw the currency in the Central Bank of Iraq, Wednesday, a decline in the value of sales of the dollar, compared with a session yesterday.
The governor of the central bank and agency Abdel Basset Turki said in a statement received / Baghdadiya News / copy of it, that "the value of sales of central bank auction of dollar Bglet today" 139 "million" 840 "thousand dollars," explaining that "the number of banks participating in the auction amounted to 25 banks.
He added that "the value of the quantity sold in cash from the dollar amounted to" 29 "million and" 850 "thousand dollars, while the value of the quantity sold Khawwalat" 109 "million" 990 "thousand dollars."
"The sale price of the dollar stood at" 1179 "dinars, including the central bank and the commission of" 13 "dinars per dollar." Finished / 21 LINK