I think that it is safe to conclude that withholding the 50k note distribution until the end of January or even in February is because if they did issue them now the locals would just squirrel the large bills away in their mattresses just as they are doing with the 25k notes.
Having said that, however, it is also my view that the CBI/IMF must have plans in place to get an FDIC type of law in place prior to the end of January.
Once that law is passed and in place then confidence in banking will return. As the people bring their 25k notes out of the mattresses they can be either deposited or exchanged for 50k notes.
In either case, the 25k notes get released back to the CBI who can burn them, thereby reducing the total money supply and allowing for upward pressure on the value of the dinar.
I conclude, therefore, that we should begin to see a rise in the value of the dinar by early February, including, hopefully, a change in the exchange rate regime to a float.
Economist: 77% out of cash liquidity for the banking system due to lack of confidence
2015/12/13 [Baghdad-where] — He called economic expert on behalf of Jamil Antoine to restructure the organization and development of the civil government banks and methods of work in accordance with modern foundations in line with the requirements of the market economy.
Said Antoine told all of Iraq [where], that “the banking system is the backbone of the economy in any country, and if this system intact and deal well with the home it leads to a sound economic system.”
He added, “The banking system has faced big mistakes and shortcomings and challenges he faced because of the separation of administration from the capital and the domination of some bankers and capital to the banking system and harnessed to serve them, which led to a loss of confidence in banks.”
He continued, “rather than a banking system inspire confidence and be a magnet for investment, has become the banking sector in Iraq suffers from a reluctance to deal with it by citizens, prompting people to deposit their money in their homes,” noting that “some banks are today powerless the payment of market need and the citizen. ”
Antoine called “civil and government banks to restructure and develop the organization and methods of work in accordance with modern foundations in line with the requirements of the market economy.” Uncertain “This step is an important need to reform and a serious political decision to implement it.”
He added, “The central bank has tried to contribute in the development process by providing 5 trillion dinars and 1.5 trillion another dinars for loans to small and medium enterprises, agricultural and industrial projects, the housing sector, but it hit the big handicaps of the most important of rampant corruption in state institutions.”
He revealed, “The lack of private sector confidence in banks and the reluctance of the private sector to deal with it cause the exit of 77% of the existing cash from the banking system.”
He continued, “We have proposed to open letters of credit in accordance with the import license Alkmarki pass through the system and remarks Kmarkip to all who wish to obtain hard currency for the purpose of import, in addition to the activation of the tax system to control the exporting currency abroad” .anthy