tlar We know the CBI is not waiting on the budget. They have told us that with or without the budget being passed, they will do this when they feel the time is right.
We also know that laws are important but laws are political and new laws will be being introduced, modified and changed for eternity. So I don't believe we are waiting on any law at this point.
The HCL has been reported as done as far as everything that was needed to be agreed to by both Bagdad and Erbil, and will be implemented Jan 1st as has even been reported in our Washington post.
So what's the hold up? It is my belief as I said the other day that there is no hold up.
The CBI IMO has made a strategic decision to open the new rate on or just before the first of next year to be active with the new budget. They were so close to the new accounting period they decided to wait.
I personally believe and have always believed they would have to make an announcement the evening before the day of, or just hours before they change the currency.
This announcement would natually have to be well publicized in order to remove as much risk as possible vendors taking advantage of the population, so there will build up to this announcement maybe calling it an "historical event" or other catch phrase. It would have to get everybodies attention.
This was one of Shabibi's major concerns is vendors taking advantage and on the day the value changed an unwitting Iraqi still paying 1000 dinar for that apple.
When would they do this? In a perfect scenario you would expect them to wait until the very last minute giving everyone little time to do anything but be washed up in the wave of change.
What would the rate be? The rate would be best served to be introduced this late in the game at the real value because the 2015 budget would be best served with a reality rate.
So it is my opinion that the rate will enter at the level "it is worth" at the present time to only shock the society one time. Next If I were the CBI, I would refer back to the strategic study done in 2008 and I would follow the recommendation to hold firm and support that rate for a predetermined period.
It is kind of like setting concrete. Protect it until itis firm enough to let float. If they do it this way it means Managed float.
Things to consider when thinking about an intro rate.
The GCC goes live Jan 1st. When Iraq becomes an active member in the GCC, the rate of the Iraqi dinar will be instrumental in trade.
The budget goes live Jan 1st. The COM and parliament aren't arguing or discussing the budget. They are in agreement on everything which is why the HCL has also been agreed upon. Sager, I believe you are absolutely correct.
Until their is a rate we won't see the budget passed.
The HCL goes live Jan 1st. The Kurds and Bagdad have said in articles its done just waiting passage. ALL the hard issues that have separated them are resolved and it has also been published to go into effect on Jan 1st here in our papers.
Iraq opens for Global business with new laws Jan 1st. The laws that have been being passed and those laws yet to come are all geared to acquire investment.
Iraq has been selling itself as a good economic investment for the last 60 days sending emissaries to many countries. The thing that will bring all this together now is the currency.
The coming announcement eluded to the fact that it would be historic and tie all the economic plans, programs and institutions together. Name anything else other than the currency that could achieve this effect.
Iraq becomes a donor country a year late, Jan 1st
Other things to consider - The IMF said their work is done in Iraq. The IMF is the guadian and sheriff of world currencies.
Also most remember the Iraqi donation to the Arab league two years ago. While other Mid-East countries gave millions and millions of dollars each in donations, Iraq gave 36 million dinars worth a paltry $36,000 USD.
I thought at the time they did this that their donation was accompanied by a note saying, "don't cash this until we call you." It took longer than anyone envisioned to finish this project.
We also know that the GCC will immediately begin implement, if not already ready, on a common currency much like the Euro. Iraq will definitely be better served by showing true value verses an arbitrarily low start rate.
This is all opinion only but it is what I feel. I also do not think that they will drop to 1000 then delete the zeros. This was proposed by an economist and not by the CBI a few years ago.
It was only mentioned by a respondent on Abadi's website as his thoughts or possibility. I think the CBI would be better served starting at this time to open what ever they determine true value is at this point.
The 2008 strategic study suggested they could support $1.13 when they were producing only 1.5 MBPD and the reserves were in the low 30 billion range.
Alot has changed since then. Even with the present problems in the country I am sure these 2008 numbers no longer apply. tlar
Did I mention rate? Serotonin I still believe the reality rate will be north of $3.00.
I have many friends who are still waiting to be bought out between $3 and $4. There dinars are deposited with a major bank who is acting as an agent for the Chinese.
They have agreed to an automatic sell between these rates. It will be messy for the institution if it is less than $3 requiring a phone call to work out a new price.
So for them to promise the $3-$4 range, someone has had to of had a heads up on the rate otherwise a major bank in the US would be stupid to get envolved.
So thats why I still think between $3-$4 is a good number. The guy who convinced this bank to do this is either the worlds greatest saleman or has some pretty convincing proof or a lot of monetary pull. Tlar