INTERESTING POST FROM ANOTHER BOARD....
Dramatic changes to Iraq's currency holding position as of Dec. 31,2007. It seems there has been a large reduction of currency on account. A reduction from 1,314,412,991 million SDR to 1,017,312,580 million SDR.
So whats significant about the change?
A reduction of NID on deposit at the IMF of 22.60% in the currency holdings account to the tune of 360.085 billion NID. The zeroing out of the CVA accounts from previous levels since 2004, which had the effect of increasing the holdings account as of Nov. 31, 2007 to 1,314,412,991 million SDR. Now with the Dec. 31, 2007 amount of 1,017,312,580 million SDR, there has been a reduction if 290,100,000 SDR.
Again with Kudo's to common-sence does that 290,100,000 SDR look familiar, well do you all remember the press release from the IMF in Dec. that stated that Iraq had payed back it's loan in full and actually paid it early? Well that is the exact amount of the original SBA post conflict agreement began in 2004.
It seems that providing that Iraq doesn't actually use the current SBA of 475 million SDR, then at some point the current holdings account will reduce from 1,017,312,580 SDR to 541,972,580 SDR within a couple of million SDR from pre-conflict levels.
So, going out on a limb here!, I believe we will soon see a rapid appreciation of the NID at the CBI auctions to correct the imbalance or the yet to be posted increase of the xchange rate at the IMF of 22.60%. Remember the new xchange rate will not be posted until Apr. 30, 2008 unless the IMF moves to, or the CBI requests a change in par value before then.
So to shorten things up, If the CBI is performing to IMF requirements then the NID should move at the CBI 333.94 pips to correct the imbalance bringing the rate to 881 in the first qtr. 2008. IMO!!
