Currency Chatter

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Currency Chatter Member Discussion

G-Lin: Said economic analyst David Zayer said the US dollar against the Iraqi dinar in the country, not the real price.
Zayer said that “the dollar exchange rate since 10 years is supported by the Central Bank of the dollar, which is pumped in and the market determines the price, this is not the real price, and is supposed to be now costs 1500 dinars to the dollar.”

Zayer said that “the decline of the dinar against the dollar is the beginning of its collapse under the difficult financial situation of the country, because there was enough money to support the dinar and now that the lack of money in the real exchange rate began to appear.”
He noted that “the government must lift the support of the dinar, and that depends on the real price in the market, in order to avert the depletion of a commodity currency is an economic reality and shows the real strength of the dinar.”
The economist Ahmad Kanani, attributed the rise in the dollar’s exchange rate against the Iraqi dinar, to non-possession of the Iraqi Central Bank sufficient liquidity to cover the local market need it [the dollar].
And it saw the local markets during the past ten days at prices fluctuation of the dollar against the dinar, where he arrived the exchange rate in the past few days in 1227 dinars to the dollar [127 000 dinars per hundred dollars]
Economic analyst of the dollar against the Iraqi dinar is not the real
48:    Things are looking better all the time! 🙂
Boomerang effect:
Oldwazhisname:    48, you sound enthustiastic for this article?!  This is an economic advisor for the Finance Committee who is arguing that the value of the dinar is artificially being pumped up in its value.  He is saying that the “real” value of the dinar in a free float will be 1,500 dinars to the dollar.  Be careful what you hope for, you might get it.
That said, the status quo is a situation that is ultimately unsustainable.  The CBI has sum certain of reserves that can be used to support the IQD’s value and provide for the sole source of convertability to USD (pretty much in the whole world).
Without an internationally convertible currency, where multiple sources of conversion become available, the CBI will be eventualy drained of all reserves.  A day of change is coming (it has to, this is not sustainable)… whether you will like its outcome or not rmains to be seen.
I want everybody to be real about this.  The pressures on the IQD are not in our favor.  The revenues from the sale of oil that support nearly the entire economy of Iraq are worsening.  Whatever possible possible pressure for a rise in the value of the IQD is clearly now a negative bias.
Let’s say that Iraq is able to move its status to Article 8 and the IQD becomes a free floating currency, it would most definitely help preserve the reserves of the CBI if the CBI chooses not to intervene and let the IQD value settle to where it will.
I am of the strong opinion that such a move would quickly lead to a downward trend in the value of the IQD that is significant because the only possible outside supporter appears to be the CBI.
For those who are looking for a float, there ought to be serious discussion about what that would look like and not some guru-speak about how it will merely boomarang higher, as if there is a huge pent-up demand for Iraqui currency.
That will never in and of itself happen without an economic catalyst to make that demand happen.  And right now it just ain’t there.
Flyboy:    Thanks, Old…however, untill the country opens itself up to the world things will never get better…having a currency that is tradeable is a must and the laws to protect those companies who do choose the invest in the country.  CBI has a thin line to walk… Damned it they do and damned if they don’t… Right now the country seems to be going down the tubes..jmo
HandOverFist:    Well, the IMF says Iraq will join the global economy in the first half of 2016.  I don’t think they can join the global economy at 1500 dinars to the dollar, or 1166, or whatever crazy number they are at now.  Wouldn’t they have to have money that is worth something, WAZ, even if only a few cents to the dollar?
Rockstar:    What everyone seems to forget is that their current rate is Not the true rate or value of their currency!
Yes they have the street rate too which manipulates the citizens so the crooks can make money that’s what happens when they are using two currencies in the country dollar and dinar!
Once they move to article 8 they will no longer use the dollar and only use the new lower denom dinar is what we hope for!
At that time they will have to make an adjustment to the value of the dinar and put the true value for them to be able to even use the lower denoms!! If anyone doesn’t believe this will happen then why did you invest in the first place?
Flyboy:    Rock… I do believe it will happen…you are right about that…also it is a deflated value and must be allowed to be re-set or RV’ed. Thanks all.
D42:    OLDWAZ has some great points and I value his informed and studied opinion, however, when we talk about reserves and how the value of the currency is determined not just on oil/GDP (free fall right now) but based on gold and other reserves they have not fully stated, how does this factor in?
We have seen articles stating that their gold reserves alone would easily backup a 1-1 exchange rate with the USD. Perhaps this is not a free float solution though, as it may very well be detrimental to the value in the near term.
A fixed peg, at least for a period of time, would provide a more stable solution, I believe, If I am correct in my assumptions. Speculation aside, one thing is certain, a major change is quickly coming to our investment, lets all pray it’s to our benefit and the benefit fo the Iraqi people.  —       Dinar4two
Aaanth:    gold eserves as stated in an earlier artcle are 90 tonnes.  that’s 3.2 billion $$  not even close to do a 1:1 if they have 40 trillion IQD
There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy. (Shakespeare)
48:    Oldwazhi…, Yep, I see it as a positive article. Nope, I don’t quite see it your way… I see it as the artificial (CBI-Gov. ‘manipulated’ 1500) price as “now costs 1500 dinars to the dollar” will eventually rise to par USD and above when controls are removed.
If the dinar is ‘un pegged’ so to say from CBI 1500 control, it will A.) stand on its own legs and rise in value or B.) fall in value. The point is that CBI control is removed as I see that as being Iraq’s sink or swim progress and movement.
Yep, I see it as good one way or another like unto currency trading and positive as long as the currency moves, either up or down, there is a gain to be made… our hope is that we are on the right side of the move.
Even if the currency drops and flushes out weak hands, I believe the value of the IQD will eventually rise but hey, its all a crap shoot ain’t it? Hopefully we find out sooner than later.
Boomerang effect:
XXXXX:     I’m with 48. I don’t care what happens. I just want them to turn it loose. As long as it’s pegged, we’re not even in the game. If it goes down when they drop the peg, so be it. At least, there will then be a chance to make some money at this.
Schízz:    It will go down I expect cos the money supply at that time will be pretty much doubled…but them going live means they have the tools to control the money supply in a blink of the eye. buy and selling of foreign currency.
They also have the gold coins as a tool to combat the inflation that is gunna come when they go live with such a huge money supply. This is why I think they will have a more fixed exchange rate for stability. Once they go live the cbi will be able to talk the rate up or down depending on where they want it. it’s exciting times.
I’m with you guys, lets just let it begin, looking forward to seeing what they go live at, i’m still hopeful for 2+ but a niggling in me tells me its gunna be alot lower. Certainly not 1166 though.
If they go for a free float with the new staging rate (highly unlikely) Just don’t panic when it drops, because it will, and sell out cos it will go back up again and stabalize. It will actually be a lot of fun if they free float it as the big players in the markets will manipulise it while they can. I always did enjoy a game of yo yo lol
Never forget Iraq will need to come out at or around their equilibrium value and will use the tools they will now have to get it at what that specific value is.
I always though $2.66 but i’m leaning towards something closer to the dollar now. who know?
Mike:    Great thread, in the end, I really want to see Iraq in Article VIII.  The reserves will be preserved and the corrupt auction’s will end.  I’m real curious about where the rate will end up, Every country that relies on oil as the anchor of their economy is suffering right now, including their currency.
Three years ago, in the boom times, Shabibi, the MoF and the SIGIR all told us the rate would be between .86 and 1.16, time will tell if Iraq’s economy can still sustain that rate.  I don’t know if they can still do that while being invaded by ISIL, the price of oil at $22 a barrel and no real exports to speak of.
G-Lin:    I don’t know if anyone has noticed or if it even matters, but they haven’t shown us the market rate the last three auctions. The last one posted was the 17th at 1233. I just don’t remember them having auctions and not showing the market rate. Just an observation.
G-Lin:    They must have read my comments and posted all 4 days today. 😆 Market rate did jump to 1240.
D42:    They read us every day, bet you a million dinar! lol!