Iraqi Dinar RUMOR BOARD

[Aerospace]

Some IMF SBA highlights
Or maybe lowlights.

http://www.imf.org/external/pubs/ft/scr/2010/cr1072.pdf

32. The lack of data and large structural changes in the Iraqi economy preclude any meaningful estimation of the equilibrium real exchange rate. A very crude assessment suggests that the dinar is broadly in line with fundamentals.4 With the drop in oil prices, it appears that a possible prior undervaluation has disappeared, and that the dinar could even be somewhat overvalued.

4 Rough estimates based on the external sustainability approach aimed at determining the current account balance that would stabilize the country’s net foreign asset position relative to GDP suggest that the real effective exchange rate is broadly in line with the equilibrium real exchange rate. The current account norm for 2014 was estimated at a surplus of 2.9 percent of GDP. Under current projections, the current account surplus isexpected to be only marginally lower than the norm in 2014.

55. Staff supports the CBI’s intention to continue to manage the exchange rate with a view to keeping inflation under control. Although difficult to assess, the exchange rate appears to be broadly in line with fundamentals, taking into account the expected increase in oil production.

6. With headline and core inflation low, the exchange rate has been stable since the beginning of 2009. The policy interest rate has been reduced gradually to 7 percent. Net international reserves increased to $50.2 billion at end-2008, but have fallen to $44 billion at end-2009, reflecting the drawdown of the government’s deposits with the CBI