12/16/2011
The uncertainty of regional impact on the value of the dinar against the dollar
The Iraqi Central Bank Governor appearance in favor of the bank continued to pump foreign currency to the currency markets in the country comes to the withdrawal of liquidity and the preservation of the dinar exchange rate and financing of business operations to private sector companies.
Salih said In a statement to the newspaper "Sabah" The unstable situation in the region led to increased demand for the dollar, which led to the rise in price against the Iraqi dinar. and feed the amounts that range from the Central Bank of the Iraqi currency markets between 150 and 180 million dollars a day, according to World Bank President.
link
Showing posts with label Iraqi dinar. Show all posts
Showing posts with label Iraqi dinar. Show all posts
Thursday, December 15, 2011
Monday, December 12, 2011
March 2010 ~ 'The Iraqi dinar has all reasons to grow stronger,' says Maliki and ~ Shabibi 'Our aim is to establish a forward market in Iraqi dinars
Two interesting articles from March 2010 ...
March 5, 2010
'The Iraqi dinar has all reasons to grow stronger,' says Prime Minister
IRAQ. Iraqi Prime Minister Nouri al-Maliki said earlier this week that the process to re-evaluate the Iraqi dinar has to do with economic conditions which have to be strengthened, reported news agency Aswat al-Iraq.
"The Iraqi dinar has all the reasons to grow stronger thanks to an increase in revenues and development of the economy," Maliki said in response to some questions through the National Information Center.
"The government would not rush matters but would rather work on finding all the guarantees to render this measure a success. The Central Bank of Iraq (CBI) is currently entrusted with drawing up a study on the whole issue and would give its decision soon," said the Iraqi premier.
The Iraqi dinar's exchange rate is suffering from low value against foreign currencies as a result of decades of wars and economic embargo that brought the local currency's exchange rate to the rock bottom from three dinars per dollar in the late 1970s and 1980s to 3,000 dinars per dollar after the 1990 invasion of Kuwait, followed by a 13-year crippling sanctions regime.
The exchange rate fell even more after 2003 to reach 1170 dinars per dollar due to the CBICBI's policy of daily auction, in effect for more than five years now.
The policy was lambasted by several economists on the grounds that these auctions do not give the real value of the country's local currency. link
Note older article ~ Iraq's Forward Market, VAT tax, Sales of Treasury Bills?
Friday March 12, 2010
'Our aim is to establish a forward market in Iraqi dinars in the near future,' say finance official
IRAQ. Iraq plans to establish an interbank foreign exchange market and dinar forward market and to step up its treasury bill activity in 2010 to help plug continuing budget deficits and foster treasury and foreign exchange markets, the Central Bank and Finance Ministry said in a submission to the IMF.
Continues ...read more ..
Iraq aims to develop foreign exchange markets outside the framework of dollar auctions currently conducted by the Central Bank, a letter of intent submitted to the IMF for a US$3.6 billion standby arrangement said. link
Iraq said it would not return to a budget surplus until 2012.
"As our financing needs in 2010 will still be substantial, we will step up our efforts to mobilize domestic financing through the Treasury bill market," Iraq's Central Bank head and finance minister wrote.
"To that end, we will conduct regular auctions, and refrain from cancellations, while allowing interest rates to be determined by the market. This will have additional benefits by determining a benchmark interest rate, while the development of a secondary market for treasury bills will allow banks to improve their liquidity management."
"They are going to shift to building a local market, they have ample cash, loan-deposit ratios are very low and they will benefit from oil,"Turker Hamzaoglu, emerging market economist at BoA-Merrill Lynch, told Reuters.
"They have to develop a domestic bond market but it's still baby steps, it's still too early, it's not even a frontier market," he said, adding that Gulf Arab and Lebanese investors could be interested in Iraqi domestic paper.
Central Bank Governor Sinan al-Shibibi and Finance Minister Bayan Jabor said in the letter to the IMF that the country planned to introduce a sales tax, as a precursor to a Value Added Tax, "in the coming years".
Iraq's gross domestic product expanded by 4% in 2009 compared with almost 10% the year before, their submission reported. GDP growth would rise to almost 7% this year and 7.5%-8% in 2011 and 2012, they said.
That improvement would be rooted in an increase in Iraqi oil output to 3.1 million barrels per day by 2012, from around 2.5 million bpd now, and exports of 2.5 million bpd, compared to just over 2 million bpd now.
That outlook might be conservative following the signing of 10 multibillion-dollar deals with global oil firms to develop Iraq's vast reserves. If all the deals work out, Iraqi oil capacity could soar to 12 million bpd in six to seven years.
"The CBI will continue to be independent in the pursuit of its policy objectives. The CBI’s monetary and exchange rate policies will continue to be aimed at keeping inflation under control and safeguarding international reserves," the submission said
The banking sector is in urgent need of reform to foster financial intermediation and enable banks to contribute to the development of a strong private sector. With the help of the World Bank and other international agencies, Iraq has developed a banking sector reform strategy, it added.
"Iraq is committed to strengthening the management of international reserves by moving ahead with the implementation of new reserves management guidelines that were adopted in early August 2008. Iraq will follow the guidelines to diversify currency composition and establish appropriate duration and credit risk, build capacity for risk analysis, and work towards establishing a dealing room".
The IMF submission said Iraq's Central Bank planned to create a foreign exchange market outside the framework of regular dollar auctions now conducted by the bank. The bank uses the auctions to set the exchange rate, which has been held at 1,170 dinars per dollar for many months.
"To improve the functioning of foreign exchange auctions, we plan to develop organized exchange markets outside the central bank, including an interbank foreign exchange market," it said.
"Our aim is to establish a forward market in Iraqi dinars in the near future."
link
March 5, 2010'The Iraqi dinar has all reasons to grow stronger,' says Prime Minister
IRAQ. Iraqi Prime Minister Nouri al-Maliki said earlier this week that the process to re-evaluate the Iraqi dinar has to do with economic conditions which have to be strengthened, reported news agency Aswat al-Iraq.
"The Iraqi dinar has all the reasons to grow stronger thanks to an increase in revenues and development of the economy," Maliki said in response to some questions through the National Information Center.
"The government would not rush matters but would rather work on finding all the guarantees to render this measure a success. The Central Bank of Iraq (CBI) is currently entrusted with drawing up a study on the whole issue and would give its decision soon," said the Iraqi premier.
The Iraqi dinar's exchange rate is suffering from low value against foreign currencies as a result of decades of wars and economic embargo that brought the local currency's exchange rate to the rock bottom from three dinars per dollar in the late 1970s and 1980s to 3,000 dinars per dollar after the 1990 invasion of Kuwait, followed by a 13-year crippling sanctions regime.
The exchange rate fell even more after 2003 to reach 1170 dinars per dollar due to the CBICBI's policy of daily auction, in effect for more than five years now.
The policy was lambasted by several economists on the grounds that these auctions do not give the real value of the country's local currency. link
Note older article ~ Iraq's Forward Market, VAT tax, Sales of Treasury Bills?
Friday March 12, 2010
'Our aim is to establish a forward market in Iraqi dinars in the near future,' say finance official
IRAQ. Iraq plans to establish an interbank foreign exchange market and dinar forward market and to step up its treasury bill activity in 2010 to help plug continuing budget deficits and foster treasury and foreign exchange markets, the Central Bank and Finance Ministry said in a submission to the IMF.
Continues ...read more ..
Iraq aims to develop foreign exchange markets outside the framework of dollar auctions currently conducted by the Central Bank, a letter of intent submitted to the IMF for a US$3.6 billion standby arrangement said. link
Iraq said it would not return to a budget surplus until 2012.
"As our financing needs in 2010 will still be substantial, we will step up our efforts to mobilize domestic financing through the Treasury bill market," Iraq's Central Bank head and finance minister wrote.
"To that end, we will conduct regular auctions, and refrain from cancellations, while allowing interest rates to be determined by the market. This will have additional benefits by determining a benchmark interest rate, while the development of a secondary market for treasury bills will allow banks to improve their liquidity management."
"They are going to shift to building a local market, they have ample cash, loan-deposit ratios are very low and they will benefit from oil,"Turker Hamzaoglu, emerging market economist at BoA-Merrill Lynch, told Reuters.
"They have to develop a domestic bond market but it's still baby steps, it's still too early, it's not even a frontier market," he said, adding that Gulf Arab and Lebanese investors could be interested in Iraqi domestic paper.
Central Bank Governor Sinan al-Shibibi and Finance Minister Bayan Jabor said in the letter to the IMF that the country planned to introduce a sales tax, as a precursor to a Value Added Tax, "in the coming years".
Iraq's gross domestic product expanded by 4% in 2009 compared with almost 10% the year before, their submission reported. GDP growth would rise to almost 7% this year and 7.5%-8% in 2011 and 2012, they said.
That improvement would be rooted in an increase in Iraqi oil output to 3.1 million barrels per day by 2012, from around 2.5 million bpd now, and exports of 2.5 million bpd, compared to just over 2 million bpd now.
That outlook might be conservative following the signing of 10 multibillion-dollar deals with global oil firms to develop Iraq's vast reserves. If all the deals work out, Iraqi oil capacity could soar to 12 million bpd in six to seven years.
"The CBI will continue to be independent in the pursuit of its policy objectives. The CBI’s monetary and exchange rate policies will continue to be aimed at keeping inflation under control and safeguarding international reserves," the submission said
The banking sector is in urgent need of reform to foster financial intermediation and enable banks to contribute to the development of a strong private sector. With the help of the World Bank and other international agencies, Iraq has developed a banking sector reform strategy, it added.
"Iraq is committed to strengthening the management of international reserves by moving ahead with the implementation of new reserves management guidelines that were adopted in early August 2008. Iraq will follow the guidelines to diversify currency composition and establish appropriate duration and credit risk, build capacity for risk analysis, and work towards establishing a dealing room".
The IMF submission said Iraq's Central Bank planned to create a foreign exchange market outside the framework of regular dollar auctions now conducted by the bank. The bank uses the auctions to set the exchange rate, which has been held at 1,170 dinars per dollar for many months.
"To improve the functioning of foreign exchange auctions, we plan to develop organized exchange markets outside the central bank, including an interbank foreign exchange market," it said.
"Our aim is to establish a forward market in Iraqi dinars in the near future."
link
Tuesday, December 6, 2011
From Forbes ~ Is The Iraqi Dinar Worthless Paper Or Maker Of Millionaires?
Bumped ~
(Thank you to bama for the following article:)
July 27, 2011
Is The Iraqi Dinar Worthless Paper Or Maker Of Millionaires?
Dozens of people have signed up for tax consultations with me over the years looking for a windfall profit on the U.S. government revaluation of the Iraqi dinars back into U.S. dollars. In other words, these were people holding dinars who were hoping they could exchange them for dollars again.
Most dinar investors are current and ex-military, warzone contractors and now speculators. A cottage industry of promoters has sprung up on the Internet promising dinar “get rich” schemes. Many have invested, say, $5,000 and they hope to make millions. I’ve always thought it was a scam, as it sounded too good to be true.
These people ask me about their potential large tax bills. Most hope for long-term capital gains tax rates, currently up to 15 percent. I have to give them the bad news: holding physical currency is considered ordinary gain or loss in Section 988 (foreign currency transactions). Unlike forex traders, who don’t hold physical currency and don’t take or make delivery, they can’t file a capital gains election to opt out of Section 988 and into short- and long-term capital gains treatment.
That means no lower 60/40 futures tax rate either (Section 1256). At least, it’s not considered a personal loss which otherwise can’t be deducted, as is the case when a person returns from a vacation and exchanges his left over currency from that trip. Investors in dinars can deduct ordinary losses in Section 988, but few expect a loss.
Lords of Finance: The Bankers Who Broke the World by Liaquat Ahamed is about how the four leading central bankers from the U.S., U.K., France and Germany navigated in and out of WWI and financed recoveries and German reparations. These central bankers went off and on the gold and new dollar standards by manipulating their exchange and interest rates and much more. This is how money and power (military and otherwise) go hand in hand.
Our current situation begs the question: Did the Bush administration plan on, and is the Obama administration still considering, paying for part or all of the Iraq war by collecting taxes from the revaluation of the dinar?
Special Offer: Safety In High-Yield. Three of Richard Lehmann’s fixed-income portfolios yield more than 7.1%. Click here for to gain access to his portfolios in Forbes/Lehmann Income Securities Investor.
If this scheme has any resemblance of reality, it could be an interesting revenue raiser for the government, and I know the government is hunting for revenue raisers and closing of tax loopholes.
Maybe the story here is just that it’s a scam. But, if rumors in the marketplace are true, and the dinar does revalue and allow conversion for most to pre-war levels, what are the ramifications for the government, Iraq, the military, investors and taxpayers? Also, what’s holding up the revaluation? Can Iraq handle it?
It does sound like a happy ending which makes me suspicious. How much tax revenue do U.S., state and local governments stand to collect? How many former and current military personnel and contractors stand to become millionaires overnight?
http://blogs.forbes.com/greatspeculations/2011/07/27/is-the-iraqi-dinar-worthless-paper-or-maker-of-millionaires/
(Thank you to bama for the following article:)July 27, 2011
Is The Iraqi Dinar Worthless Paper Or Maker Of Millionaires?
Dozens of people have signed up for tax consultations with me over the years looking for a windfall profit on the U.S. government revaluation of the Iraqi dinars back into U.S. dollars. In other words, these were people holding dinars who were hoping they could exchange them for dollars again.
Most dinar investors are current and ex-military, warzone contractors and now speculators. A cottage industry of promoters has sprung up on the Internet promising dinar “get rich” schemes. Many have invested, say, $5,000 and they hope to make millions. I’ve always thought it was a scam, as it sounded too good to be true.
These people ask me about their potential large tax bills. Most hope for long-term capital gains tax rates, currently up to 15 percent. I have to give them the bad news: holding physical currency is considered ordinary gain or loss in Section 988 (foreign currency transactions). Unlike forex traders, who don’t hold physical currency and don’t take or make delivery, they can’t file a capital gains election to opt out of Section 988 and into short- and long-term capital gains treatment.
That means no lower 60/40 futures tax rate either (Section 1256). At least, it’s not considered a personal loss which otherwise can’t be deducted, as is the case when a person returns from a vacation and exchanges his left over currency from that trip. Investors in dinars can deduct ordinary losses in Section 988, but few expect a loss.
Lords of Finance: The Bankers Who Broke the World by Liaquat Ahamed is about how the four leading central bankers from the U.S., U.K., France and Germany navigated in and out of WWI and financed recoveries and German reparations. These central bankers went off and on the gold and new dollar standards by manipulating their exchange and interest rates and much more. This is how money and power (military and otherwise) go hand in hand.
Our current situation begs the question: Did the Bush administration plan on, and is the Obama administration still considering, paying for part or all of the Iraq war by collecting taxes from the revaluation of the dinar?
Special Offer: Safety In High-Yield. Three of Richard Lehmann’s fixed-income portfolios yield more than 7.1%. Click here for to gain access to his portfolios in Forbes/Lehmann Income Securities Investor.
If this scheme has any resemblance of reality, it could be an interesting revenue raiser for the government, and I know the government is hunting for revenue raisers and closing of tax loopholes.
Maybe the story here is just that it’s a scam. But, if rumors in the marketplace are true, and the dinar does revalue and allow conversion for most to pre-war levels, what are the ramifications for the government, Iraq, the military, investors and taxpayers? Also, what’s holding up the revaluation? Can Iraq handle it?
It does sound like a happy ending which makes me suspicious. How much tax revenue do U.S., state and local governments stand to collect? How many former and current military personnel and contractors stand to become millionaires overnight?
http://blogs.forbes.com/greatspeculations/2011/07/27/is-the-iraqi-dinar-worthless-paper-or-maker-of-millionaires/
Monday, November 28, 2011
November 28th ~ Iraqi Central Bank to Issue New Notes
Bumped ... UN lifts Libya Sanctions ~ It means that Libya's government will now have full access to the significant funds needed to help rebuild the country ...
and .. New Libyan Currency By Year End ~ new currency will be brought by the end of this year and exchanged with the older one as soon as it arrives in banks
If this is what they do, the RV will start at 1 IQD = .86 cents USD ...Iraqi Dinar (IQD) US Dollar (USD) 0.00086 11/28/2011 11:20 AM Table Graph Convert IQD to USD link
November 28, 2011
Iraqi Central Bank to Issue New Notes
AKnews reports that the Iraqi Central Bank (ICB) has confirmed it will issue a new bill with a value of 50,000 IQD ($43) but marked as 50 dinars.
Deputy chairman of the ICB Dr Muzher Saleh said the bank is working to issue this new money in addition to coins in both Arabic and Kurdish in an effort to address the liquidity problem in Iraq.
The largest currency in the country is now 25,000 Iraqi dinars (pictured) and its purchasing power is about $23.
The new currency will include symbols that reflect the diversity of Iraq’s sects and cultures including the Kurdish culture. “Iraq needs to support its economy and its currency through the issuance of a currency similar to foreign ones like the $100 bill,” Saleh added.
The main tasks of the ICB are to maintain price stability, implement monetary policy, manage reserves of foreign currency, issue and manage the currency and regulate the banking sector.
The inflation rate in Iraq stood at 7.3% in September.
link
and .. New Libyan Currency By Year End ~ new currency will be brought by the end of this year and exchanged with the older one as soon as it arrives in banks
If this is what they do, the RV will start at 1 IQD = .86 cents USD ...Iraqi Dinar (IQD) US Dollar (USD) 0.00086 11/28/2011 11:20 AM Table Graph Convert IQD to USD linkNovember 28, 2011
Iraqi Central Bank to Issue New Notes
AKnews reports that the Iraqi Central Bank (ICB) has confirmed it will issue a new bill with a value of 50,000 IQD ($43) but marked as 50 dinars.
Deputy chairman of the ICB Dr Muzher Saleh said the bank is working to issue this new money in addition to coins in both Arabic and Kurdish in an effort to address the liquidity problem in Iraq.
The largest currency in the country is now 25,000 Iraqi dinars (pictured) and its purchasing power is about $23.
The new currency will include symbols that reflect the diversity of Iraq’s sects and cultures including the Kurdish culture. “Iraq needs to support its economy and its currency through the issuance of a currency similar to foreign ones like the $100 bill,” Saleh added.
The main tasks of the ICB are to maintain price stability, implement monetary policy, manage reserves of foreign currency, issue and manage the currency and regulate the banking sector.
The inflation rate in Iraq stood at 7.3% in September.
link
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