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*** Clarification: This is an older article, but the facts and statements are still relevant
Iraqi central bank governor interviewed on monetary situation
Read more:
http://dinarvets.com/forums/index.php?/topic/20596-iraqi-central-bank-governor-interviewed-on-monetary-situation/#ixzz0puNX6Qdy
Personal opinion: I think this is an interesting article for various reasons. #1, Shabibi addresses the LOP issue. According to that article from XE, Iraq plans to drop zeros by the end of the year. I keep saying there is no backing for this article, but of course it keeps getting brought up.
Well, there’s Shabibi himself DENYING that they have plans to drop the zeros in any timeline! Moral of the story? XE is good for rates, but when it comes to news… we should be skeptical of the opinionated articles they put out.
Also in that article, Al-Shabibi lets us know that the current monetary policy is always on a 3-6 month timeline, meaning it is revised or reviewed very often.
*** Clarification: This is an older article, but the facts and statements are still relevant. Shabibi has never rescinded these statements, and the policies are still the same. The article also shares that the CBI is not in 100% control of the rate on the Dinar, the IMF has agreements with the Iraqi Government. Sorry for the confusion!
Read more: http://dinarspeculation.com/2010/06/04/shabibi-denies-plans-to-lop-hints-dinar-exchange-rate-may-be-reviewed-soon/#ixzz0pushL8TF
=======================================
Iraqi central bank governor interviewed on monetary situation
Asked to discuss the global economic crisis and whether it has been contained, Al-Shibibi says this crisis is enormous and "will result in a relatively large recession in both advanced and developing countries." He explains that the crisis originated in the United States as a result of the real estate mortgage problem caused by easy-term loans to encourage individuals to buy real estate, and who later were unable to settle these loans. He adds that because these loans were guaranteed by insurance companies, these companies were obliged to repay the loans to the banks and, thus, some of them became bankrupt along with some investment banks. Concerning the rescue efforts, Al-Shibibi says: "The 700 billion US dollar issue is actually the beginning, because the pumping of this cash into this sector has yet to prove that it was a successful measure." He adds that "the other solution that should have been followed is moving to the real economic sectors; that is, all these sums of money should have been used to finance real issues," explaining that the bailout helped settle certain marginal issues only.
Asked whether the Iraqi economy will be affected by the global economic crisis and how great this effect will be compared to advanced and developing countries, Al-Shibibi says the effect of this crisis differs from one country to another, noting that Iraq's concern is over the drop in the demand for oil. He adds: "The sharp drop in the demand for oil has greatly impacted the revenue of these countries, but on the other hand and since oil is evaluated by the US dollar, a partial compensation has materialized," explaining that the net effect is less than what was estimated.
Asked about the relations between the Central Bank and the Iraqi government, Al-Shibibi says: "Although the Central Bank is part of the state's system and works alongside the government, it has its own independent policies," explaining that some of these policies cut across the government's course of action, but at the same time "they stabilize the exchange rate, increase reserves, and contribute to other matters that benefit Iraq and the Iraqi society in general." He also explains that the Central Bank is actually a bank for reserves, which controls foreign and local bank reserves, adding that by maintaining the stability of currency, the Central Bank helps the government "to plan its expenditures securely."
Rahim notes that some accuse the Central Bank of adopting strict policies in order to control inflation, and others justify these policies saying that these policies are dictated by the IMF, and he asks Al-Shibibi to comment.
Al-Shibibi says this matter should not be exaggerated, noting that the Iraqi Government, not the Central Bank, has an agreement with the IMF,and the Central Bank implements the government's monetary policies.
He adds that the IMF sets terms in every agreement it signs with every country, and "while negotiating with the IMF, we try to make these terms as easy as possible. At the same time, we try to impose certain matters on the IMF," explaining that these negotiations aim at reducing 80 per cent of Iraqi debts. He adds that when Iraqi debts are reduced by this percentage, the budget costs will decrease and the speculations concerning its implementation become more certain. He says: "The 80 per cent reduction in debts, which we were able to obtain from the Paris Club, is the highest percentage ever given to a middle-income country in the entire world."
Asked to explain in return for what, he says in return for policies that Iraq should implement.
Rahim also notes that the IMF asked the government to raise the price of oil derivatives and to postpone payment of the difference in salaries that was due following the recent salary increase, and he asks Al-Shibibi to explain the Central Bank's position on this. Al-Shibibi says "the IMF policies were in line with the objective to curb inflation," explaining that their outcome was for the benefit of Iraq, particularly in strengthening the purchasing power of the Iraqi dinar, which should remain under control at all times. He adds that "the Central Bank's general monetary policy is not a long-range policy; rather, it is revised every six or three months in order to monitor where things are heading." Rahim says that what is happening in Iraq today is that local banks are collecting Iraqi dinars from the market and depositing them with the Central Bank in return for a certain interest; thus, making profits at the Central Bank's expense, while they should be lending money to companies and individuals to invest in various sectors. Al-Shibibi confirms that this is the case, explaining that the Central Bank's main objective is to maintain the stability of the currency.
Asked whether the studies on inflation prepared by the Central Bank conform to the studies prepared by the Iraqi Central Apparatus for Exemption, because some believe that there is a disparity between the two, Al-Shibibi says: "The brothers in this apparatus and the Planning Ministry provide us with data on inflation; we then make our calculations to find out the rate of the core inflation on which we build our monetary policies, which aim at maintaining monitory stability," adding: "We take this data, but we design the policy." He explains that while preparing these studies, the Central Bank takes into consideration the outcome of the budget's expenditures in terms of the production attained from such expenditures.
Asked to explain whether recent salary increases approved for civil servants have caused an increase in the cost of living or inflation, Al-Shibibi says inflation should be treated by further spending from the budget," explaining that "inflation is actually a real fact, rather than a monetary issue," which means that it is caused by certain sectors that fall under the authority of the Planning and Finance Ministries. He adds that the Central Bank can only interfere when production results from budget expenditures. Asked in what way the Central Bank will interfere, Al-Shibibi says "it can interfere in the monitory policy, such as raising interest rates, holding back liquidity, or raising exchange rates. It is a firm policy in order to handle the current situation." Rahim notes that the Central Bank has reduced the interest rate to 15 per cent. Al-Shibibi confirms that it has done so, because things have improved. Asked whether this reduction took place as a result of the global economic crisis, Al-Shibibi says it is more related to the efficiency in implementing the budget by the Finance and Planning Ministries as well as the various concerned sectors. He explains that the Central Bank is against adopting strict policies, but is currently doing so until expenditures become more productive.
Asked whether the removal of three digits from the Iraqi currency is a step aimed at curbing inflation, Al-Shibibi says this issue has nothing to do with inflation, but the concerned parties are taking this issue into great consideration and giving it precedence over other issues, such as the implementation of certain monetary policies and reserve investments. He adds: "We monitor the value of the Iraqi dinar vis-A -vis the US dollar, which is relatively stronger than the dinar," noting that the digits issue is currently under serious review. Asked whether there is a timeframe for making a decision on this issue, he denies that there is, explaining that this depends on the circumstances and the exchange rate policies.
Rahim notes that the Central Bank has fixed the exchange rate for the US dollar and that it is the only party that controls any increase or decrease in this rate, and he asks Al-Shibibi to confirm this. Al-Shibibi confirms that this is true, "because managing the exchange rate mainly helps in curbing inflation. The system by which we determine the exchange rate is called 'managed float system,' which means that the price of the dinar is kept floating but is closely monitored so that it can be managed whenever a tangible change occurs." He adds that this floating system is linked to the supply and demand for the US dollar, explaining that the Central Bank is obliged to guarantee 100 per cent of the demands by Iraqi banks for the US dollar; otherwise, they might buy it from other local sources at a cheaper price, resulting in the presence of more than one price, which is against the bank's current policy. Asked whether the Central Bank has sufficient amounts of foreign currency to meet the market's demand, Al-Shibibi says that the bank is obliged to meet the demand in full, adding: "We believe that our reserves are sufficient to meet such demand." He explains that any request for foreign currencies that takes place in the currency auction is reviewed carefully before it is approved, requiring the Central Bank to always make foreign currencies available. He notes that the Central Bank receives requests for foreign currency in amounts ranging from 150 to 200 millions daily, [currency not specified], which means that it should be able to meet this demand. He explains that exchange rate fluctuation is more dangerous than any drop in the exchange rate.
Read more: http://dinarvets.com/forums/index.php?/topic/20596-iraqi-central-bank-governor-interviewed-on-monetary-situation/#ixzz0putdodiC
u really think .0029...
I am not sure.
Call me when you get a chance bud
now that sucks ... but look on the brite side, you will get in bud
LOP - Not Mentioned, Nor Implied ……… ANYWHERE
Guys, I want you to see there is NO mention of what Aero posted anywhere in the sentence he wrote. If you see it there I want to know about it. Aerospace is posting TOU unfounded socalled Facts that is NO WHERE in his so called link that is a questionable source
AEROSPACE POSTED:
Dow Jones Newswire: A current 25,000 Iraqi dinar banknote will become IQD25, and a dollar will equal only 1.17 dinars.
The Link Aerospace Posted:
http://www.zawya.com/printstory.cfm?storyid=ZW20100516000086&l=151440100516 ... LOP - Not Mentioned, Nor Implied ……… ANYWHERE
Sunday, May 16, 2010
(Adds comments, background throughout)
MANAMA (Zawya Dow Jones)--Iraq's central bank is pushing the government to sell bonds to fund an estimated $19.5 billion budget deficit and help wean the fragile country off of external support as it rebuilds, its governor said Sunday.
WayneC777 – Now Aero, you can do better than this bud. This said (Iraq's central bank is pushing) this IS NOT the CBI guys. It a separate news source that is not showing the true link.
"The government has planned this [a bond sale] as part of the financing of the budget," Sinan Al Shabibi said in an interview in Bahrain.
"We are pushing for both [bonds and T-bills] to deepen the market. Any kind of financing is welcome," Al Shabibi said, adding that plans for a bond sale "aren't progressing yet" but that he expected them to do so "quite soon."
"We are suggesting, and expect, the government to use all options available," Al Shabibi said. The central bank monitors all issuances to make sure it doesn't affect monetary policy, he said.
Al Shabibi also said a planned re-basing of the Iraqi dinar, by knocking three zeroes from it, ... LOP - Not Mentioned, Nor Implied ... could be expected next year, with the move requiring "a lot of field work."
Iraq--still battling sectarian conflict after years of war--is banking on a boost in oil production to stimulate the economy.
The government plans to boost its production of crude oil to 4.5 million barrels a day in 2014 from the current 2.4 million barrels a day. Iraq sits on the world's third-largest oil reserves.
Al Shabibi said he hopes that international banks will also be involved in financing the government's reconstruction effort.
While the central bank is talking to many international banks interested in setting up in Iraq, the country's security situation is still a sticking point, he said.
"We are talking a lot to them, they are welcome," he said. "They are very sensitive to security questions. I think security problems are exaggerated, and we try to explain that."
He said a planned pullout of U.S. troops from the country "will be a sign of security."
"We don't want to depend on the state for financing," Al Shabibi said, adding that economic growth hinges on oil "on the quantity side" as well as how oil prices hold up.
A budget deficit this year, estimated at 22.9 trillion Iraqi dinars ($19.5 billion), has had Iraq turn to the International Monetary Fund and World Bank for loans.
The budget shortfall will be financed mainly by oil income and a loan from the IMF, though the central bank is "encouraging financial diversification."
"The government is still in negotiations with the World Bank" for a $500 million soft loan, Al Shabibi said, after the IMF approved a $3.6 billion loan in February.
Iraq began to accumulate debt from mostly European creditors in the 1980s, building up the government's debt to almost $140 billion. "We were indebted to almost every country," Al Shabibi said.
Next year, the country will begin paying back $7.8 billion owed to the Paris Club group of creditor nations, who in 2004 waived 80% of about $40 billion lent to Iraq.
"The repayment will start next year until 2028," Al Shabibi said.
Debts owed to Arab states, including Saudi Arabia and Kuwait, haven't been settled. Asked for a timeline for that, Al Shabibi said: "This is a question of negotiations." He said a condition of the Paris Club debt deal was to "seek comparable treatment from other creditors."
Meanwhile, the $3.6 billion IMF loan has "not yet materialized," he said. "The loan is ready but I think there is still a lot of discussions on budget."
The IMF said at the time that about $455 million of the loan--meant to help Iraq meet balance of payment requirements--could be disbursed immediately, with the rest to be given in the coming two years.
-By Nour Malas, Dow Jones Newswires, +97150 2890223; nour.malas@dowjones.com
Copyright (c) 2010 Dow Jones & Co.
(MORE TO FOLLOW) Dow Jones Newswires
16-05-10 1514GMT
lolo, your PM was priceless. But I "DO AGREE"
29.3M T-Buys at .0009
the SAR also has matched yesterday's SAR 6M
lololo
I hope so
how about this, the glass has a certain amount in it, that can and "WILL" grow towards filling!!!!!!!!!!!!!!!!!!!11
And still continues!!!
Just relax and do what you as an investor "WANT" to do. Forget about trying to worry!
If I have Brian figured correct, I see him buying back at this point. There is alot of buying without much selling. And its stuck on .0001
Could they be doing a buy back
man, what a messed up ? we have.
A d m e n has turned this b o o r d into p r e m i u m. I would complain to them. All of you. They turned it premium because of me. They are trying to smother the truth. All of you will need to complain and get it reversed. Its your monthly Fees
I think it will
Post: 24946
Look, I would love to make millions of dollars here but many do not understand that by lopping that increases the value massively
WayneC777 – and also devaluing the “POWER … (strength)” of their money
and gets rid of the massive loose money way in access like these penny stocks that have billions of shares and then reverse split to increase all around value back into their company only we are talking about a country revers spliting their currency.
WayneC777 – if you new what you were talking about you would know that a Reverse Split in “Penny Stocks” and a LOP are two fifferent ways of action.
1 – a Penny stock is a created company to create Fraud for the purpose of selling shares.
2 – A Countries money “IS NOT” the same. And if you read the two stick’s you WILL SEE there are many ways to do this without the LOP. As soon as they RV … they will reduce their M0 Majorly “AUTOMATICLY, without breaking the strength of their money, from using a LOP
Now as I said I would love to make millions here and sure I hope I am wrong but people need to be practical and stop thinking about their pockets
WayneC777 – then why are you here? The whole World invests. That is how one grows. If they didn’t you would not be driving what your driving, cause they had to invest to build up their factory … Besides …
One must think about their pockets. I am sure you do when your running low on cash … GARONTEED you do …
GOD himself tells us to be Wise in ALL things and learn to Invest and to prosper …
and start to think what a country will do and must do to promote their currency and value again.
WayneC777 – lololo Their Currency is so well known rite now its pathedic. They “ARE Globally Recognized” right now. And when they RV the Whole World will know what is up …
Number 1 they could care less for their people
WayneC777 – and you “KNOW THIS … HOW!!!”
Down at this links bottom within 10 paragraphs is a statement where he, he cares nothing for the Credit crisis, he just needs to know how to deal with it. “He wants the Dinar to grow strong for his people”
http://www.cpifinancial.net/v2/Magazine.aspx?v=1&aid=1809&cat=BME&in=102
so stop with the deal about how a lop would hurt them because it it actually does not.
Wayne – NO! … and yes it does hurt the money, its reduces its power majorly. And the Countries that have LOP’ed, the smallest percentage to inflation is 125% … Iraq is at 12% ... WHY WOULD THEY LOP ...
It brings a new level of money value currency modification for that value. It is not something that decreases it increases value.
WayneC777 – and that statement has just said you have NO IDEA what your talking about.
here we go
3M shows togetherness on MACD, RSI-EMA, Slow-St, and have been accumulating
lolo tire us out ... ya! thats going to happen
looks that way to me...
looks like a running close
That "IS" correct. And tell them just how many "Audited" financials Brian has done ...
Yesterday was mostly buys
L2 please
well either your not paying attention, or you do not know charts. Because they are telling me there is more pressure in the Bulls than the Bears. But the MM's are testing the waters and gathering.
sound like he is shorting to me
NICE, thanks stevo
L2 please
It is amazing how facts are said ... but have two meanings lolo
can you put up another chart
hey bud
call me
meaning when they can not buy any more, that is when they will run it?
look at 3M MACD ... NICE
I have been out
I missed something friday, it was showing IDCN on something showing they were a pic
You need to check out Iraq's Dinar. Its ready to Revalue.
tell me if I am wrong, but its appearing as a big run to maybe .003
Is that possible