Central Bank of Iraq (CBI) News > Continued high rate of sale currency in Central
BAGHDAD / obelisk: sales of the Iraqi Central Bank of the dollar, Tuesday, up in the auction on the sale and purchase of foreign currencies, reaching 223,598,000 U.S. dollars, compared with 214,160,000 U.S. dollars recorded in the previous session, and covered the central bank at an exchange rate basis was 1166 dinars per dollar. FULL ARTICLE & LINK BELOW
BYE THE SEA: The CBI is profiting just about $2million U.S. per every $200 million dollar auction. Not bad money to make 6 times a week. A month of this, and you are talking some serious cash....close to $50 million a month.....geez.... I am sure there are those who may be saying, if it ain't broke, don't fix it.....why change our currency value? Of which, this reasoning by itself it makes a fairly strong argument.
You kind of begin to see why they may not be in the hurry we may think they are in......nevermind the other external factors. Yet somehow the powers in charge need to believe how much more they can make from a float.
Apparantly that hasn't sunk in quite yet, thus the dragging of feet. One would guess, the IMF stand-by agreement deadline may have a real "take notice" effect on their newly found recognition of what to do soon. Let's hope so.
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TLAR: I think they are buying all the dinars in the Middle East. Of course you have to factor in the currency that is being printed in Iraq 24 hours a day. By now thats got to account for the small % of dinars that Maliki insists "his bank" buy. Hmmm. 28 banks participated and none offered to sell the dollar. This is month 5 of an amazing mop up of dinar.
They are retiring dinar not replacing it with smaller denominations. I would love to know how much is left in the Middle East. Lets say average auction is $200 million per day x's 5 days x's 4.2 weeks equals 4.2 trillion dinar coming back into the CBI per month. I know Shabibi was also buying dinar through the auctions for 2 months before he was taken out. Maybe thats a total of about 4 months Shabibi and Turki have been buying dinar at an average billion USD per week or 1,2 trillion dinar. Lets do this again.
1.2 trillion per week x's 4.2 weeks in month equals 5.04 trillion dinars a month being bought back. 5.04 trillion x's 4 months equals 20.2. Trillion dinar bought through the auctions assuming it has been four months. Many days they exceeded the 300 million USD sold.
So this number in my mind is conservative. Now take into fact that Shabibi also allowed ten banks to buy dinar and sell USD for the last month or so with a limit of $5000 USD per person per trip.
Now take into the fact that Turkri expanded that program to allow all banks to buy dinar and sell USD and did not state a limit. The target I'm trying to understand is the anticipated growth of the reserves this year by the CBI.
The reserves are 67 billion USD and the bank thinks they will end this year at 105 billion. Thats an increase of over 60% or 38 billion increase. Since the beginning in 2003 to today the CBI has average growth of 6.7 billion per year. Last year it was 7 billion growth. For them to anticipate a surge of 38 billion in currency reserves it has to come from somewhere.
Now lets look at this again. 67 billion (where reserves are at) plus normal curve or growth rate- let's say + (8 billion normal growth) + (20.2 billion estimated to be sold to date through the auctions) = approximated 95 billion.
They have estimated that the reserves would be about 105 billion by the end of 2013. The above numbers don't take into account how much the banks have sold in USD. If they raised the value of the dinar to lets say 1 dollar and released the smalls , all of the USD they have sold over the last 4 months would come rushing back into the CBI in a few months in my opinion.
Certainly they would collect most of it by the end of this year. In addition they would be very close to the desired target of 25 billion in currency out in Iraq at the same time. If there is 38 billion in USD out and they spend 1 to 1 to buy it back, they would start "the next period at 38 billion dinars on the street backed by 105 billion USD in reserves.
Certainly this could be a workable plan to accomplish their stated goals. Keep it up CBI. Keep dollarizing. They should run out of dinars to buy soon because there is a finite # out there.. The supply of dollars buying this dinar is inexhaustible given the bank has been doing this for 4 months and the reserves are still at 67 billion. The bank is making money doing this day by day and Iraq is reducing their debt with every auction by a ratio of 1179 to 1..
BLUEYESINLEVIS: I was unaware that we have knowledge of them printing dinar now. I thought that the number was finite.. and limited to that amount printed by De La Rue in 2004-2005?
-It is not easy task printing this currency with the foil strip, watermarks, etc. I talked to my dealer before. he described in detail the extensive method of printing the IQD.. and it did not sound like you can just print some off in the back room of the CBI.
I also thought that the printing was done abroad and shipped in? How can they be printing currency in Iraq... and then why have they talked of contracting for new currency, etc? Couldn't they print it themselves.. if they are printing currency now? Just curious could you clarify your thoughts on this, Tlar? TYIA
TLAR: I meant to say "being printed in Iran, not Iraq" It was just an oversight of mine. The CBI does not print currency and to my knowledge no dinars have been printed since the initial printing in 2003. Iran has been printing counterfeit 5000 dinar notes and 10000 dinar notes for the past 3 years at least.
Everybody knows it but the government, Maliki, has made no effort to stop it. In my opinion this is what they are talking about when an article states, "the Iraqi government is supporting the Iranian economy and keeping it from collapse". Nice catch Blue. Thanks for pointing out my error. It reduces the confusion.
TIMSTERS: so tlar why would they rv if they didnt want irran to benefit from the rv ? i mean who would catch the fake dinar so they didnt profit from it? kinda makes sence why they havent rv,ed yet trying to get a grip on alll these counterfit bills before they couold move forward.so iran and seria could,nt benefit from it.
TLAR: timsters, I think Maliki purposely has not let the bank RV in order to help Iran. As long as they are using the present bills and don't switch to a non-counterfeit able bill, Iran can print dinars and swap them for hard currency (USD) in Iraq. I have said this on numerous occasions.
Maliki is a puppet of Iran and he consistently does Iran's bidding. He proved that to me the minute he took office and immediately signed a favored nation trading agreement with Iran. He has gone against the wishes of the US and UN when he allowed Iraq to be a conduit for arms to support the Assad regime. In his every decision you can see Iran pulling the strings.
Iran said in the beginning they did not want to see a prosperous democratic Iraq and what do we have? A nation that by all means should be doing well with all the resources they have but instead we have a nation of poor people demonstrating in the streets. We also see all major legislation that would propel Iraq to prosperity stalled by his party.
TIMSTERS: sooooo......... we wait for them to get maliki out before we can even think of cashing out...
DARBSALAD: The Kurds and other opposition members will need to step up to the plate if they plan to save their country. They should not expect any assistance from the United States. Let us hope that the new President of Iraq is seated this week.
BLUEYESINLEVIS: Thanks, Tlar. I see exactly what you meant, now. It threw me off when you said Iraq.. instead of IRAN. Great analysis. And I agree.. they are NOT gonna give Maliki the DFI money.. and he is NOT gonna RV and hurt Iran
MAXGIRL: i have always believed this even will not happen until M is out, this just confirms it...
FULL ARTICLE & LINK
Central Bank of Iraq (CBI) News > Continued high rate of sale currency in Central
BAGHDAD / obelisk: sales of the Iraqi Central Bank of the dollar, Tuesday, up in the auction on the sale and purchase of foreign currencies, reaching 223,598,000 U.S. dollars, compared with 214,160,000 U.S. dollars recorded in the previous session, and covered the central bank at an exchange rate basis was 1166 dinars per dollar.
The bulletin auction bank that the aggregate demand for the dollar distributed by $ 21,375,000 in cash, and 223,000, 202 dollars in the form of remittances fully covered by the bank foreign exchange rate was 1179 dinars per dollar, including the central bank's commission amounting to 13 dinars per dollar.
The bulletin indicated that the 28 banks participating in the auction today did not make any offers to sell the dollar. And regulates the Iraqi Central Bank auction of five meetings weekly from Sunday to Thursday for the sale and purchase of foreign currency, and receive a cash commission on the sale and transfers of about 13 dinars per dollar. LINK