I have pulled in this excerpt from the IMF’s Staff Report on Iraq issued January 2016. Key parts are underlined below…
As much as I continue to believe that Public Press Releases and Mainstream Media articles are certainly a lagging indicator of RV/GCR events, the information below is very relevant in that Iraq must show the financial community at large that it is prepared to enter the global community with a stable currency infrastructure.
Albeit, neither the IMF or Iraq are going to publicly post ahead of time that “we are going to RV our currency before the end of Februrary 2016″… but here is our “veiled clue” none the same. 🙂
IMF Country Report No. 16/11 IRAQ
PUBLISHED JANUARY 2016
[Page 11] B. Managing External Pressures
19. The government will maintain the Iraqi Dinar’s peg to the U.S. dollar (MEFP, ¶18). The peg provides a key nominal anchor in a highly uncertain environment with policy capacity weakened by the conflict with ISIS. Accommodating external shocks through more exchange rate flexibility—as opposed to fiscal adjustment—is not advisable.
A small devaluation would not alter the need for fiscal adjustment much [A 10 percent devaluation of the ID would improve the non-oil primary balance by about 2 percent of non-oil GDP, assuming no adjustment in ID denominated spending including wages and pensions.
Moreover, devaluation would have little impact on exports, which are almost exclusively oil and oil-related products.
20. The government will gradually remove remaining exchange restrictions and multiple currency practice (MCP) with a view to eliminating exchange rate distortions.
Such a move towards acceptance of the obligations under Article VIII of the IMF’s Articles of Agreement will send a positive signal to the investment community that Iraq is committed to maintain an exchange system that is free of restrictions and MCP for current international transactions and thus facilitate creation of a favorable business climate.
As a first step, the government will, by end-February 2016, amend the Investment Law, or issue clarifying implementing regulations, to remove the limitation on transfer of investment proceeds that gives rise to an exchange restriction, as recommended by a recent technical assistance mission of the IMF.