Iraqi Dinar Discussion Board

[Sunnybank]

Lot's of good news, yet our buddy TD is still being the wet blanket.

10-19-2014 Intel Guru TD Noteworthy article from THE FINANCIAL TIMES proposes that "Iraq will "almost certainly" run a deficit in 2015". It goes on to say that the GOI could borrow against it's reserves but this would bring upon the risk of increased inflation and therefore weakening it's currency. I had a chat with my Kurdish friend (an economist) regarding such and he confirms that the current budgetary concerns are real and possibly to get worse going forward. Although Iraq is receiving military assistance they are responsible for the tab of rebuilding their military. Unfortunately they are still losing military bases and along with it millions of dollars in ammunition and hardware. Coupled with loss of economic productivity is the declining price of oil.

10-19-2014 Intel Guru TD Although Iraq knows their path forward is a market driven economy and diversification from oil dependence, it is way too early amid the chaos of any infusion of foreign capital investments by MNC's. Tourism is non existent. My friend indicates that the CBI (so far) has curtailed through monetary mechanisms any decline in the rate of the dinar BUT that budgetary pressures and continued lack of improvement of the disruptive forces of ISIS could and would yield to unbearable ripple effect pressures on monetary policy going into 2015 as the Financial Times article alludes to. At least in the short term it is quite clear based on all these factors that Iraq simply cannot risk nor pay for any increases in the value of it's currency.

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