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“While the situation is tenuous, to say the least, it is my firm view that We Are Almost At The Point Of A Disorderly Exit From The Fixed Rate”
Central bank: speculators are taking advantage of statements made ​​by officials to manipulate exchange rates
Enorrste: What is clear to me from this article is that there will be a disorderly exit from the fixed exchange rate.  The CBI has let this go too far, even to the point of reducing its reserves by nearly 30% in an attempt to control the market rate at or near the official rate.
The reason that the IMF has been allowed to enter into this situation is due to the fact that the CBI (without Shabibi) has no idea how to solve the problem, especially with the lower price of oil and the ISIS crisis sucking up their funds.
The arrival of the IMF as trustee over the CBI is a clear indication to me that my prior statement is fact.  The CBI is at a loss to know what to do….
However, the IMF has a clear vested interest in the success of this process of democratization in Iraq.  I believe that the die is cast in that sense:  they will not let Iraq fail.
Having said that, however, I don’t believe that the IMF is a whole lot more savvy than the CBI in terms of control of the situation.  They have as much as admitted that the low oil prices and the ISIS situation have exacerbated (KAPS least favorite word) the situation to the point of crisis.
Still, they have also clearly laid out a plan which we discussed on the call last night that is forthright and direct even to the point of stating, as one of our callers pointed out, that the GOI “will” do this and that to ameliorate the situation.
Therefore, it is my opinion that we will see a disorderly exit from the fixed rate regime to a floating rate regime in the near future.  It will not be a surprise to me to see the initial reaction from the market to be a drop in the value of the dinar.  ‘
This drop will be precipitated by a lack of confidence rather than the fundamentals, in my view.  However, within a short time it will become evident that the dinar is well backed by reserves and the process will reverse itself.
In the meantime, again, just in my own opinion, the issuance of the gold coins will ameliorate the situation considerably, especially if they sell them at less than their worth in gold on the open market.  As stated in our call last night by Jack, who would be so dumb as to not buy gold for over $100 less than its value (a paraphrase of his statement on my part)?
While the situation is tenuous, to say the least, it is my firm view that we are almost at the point of a disorderly exit from the fixed rate.  Once that happens there will be a temporary fluctuation, most likely down initially, in the value of the dinar, followed by a rise commensurate with the underlying value of the currency.
I am currently prepared to buy dinar.  I will do so at the advent of this change, whenever it occurs, irrespective of the price of oil or the ISIS situation.
I was a commodities trader in the middle to late 1980s and I learned at that time that the wise person buys at the bottom and sells at the top.  When all others panic and are ready to bail out, I will do just the opposite.  Put another way, it is always darkest just before the dawn.
This is not a recommendation on my part by any means.  My decisions are mine alone.  Others will do what they will based on their own analysis and financial conditions.
​All I am saying in this post is that, in my view, this sucker is about to move.  It is very dark right now.  So be it.  Having said that, there are people all over the world waiting for the dawn… Enorrste
Article Being Referenced:
Central bank: speculators are taking advantage of statements made by officials to manipulate exchange rates
Thursday January 14, 2016 – 05:27 —  Baghdad: Mohammed Major (New Morning) – The Central Bank of Iraq, on Wednesday, Iraq, subjected to an economic war, accusing speculators broadcast the rumors for the purpose of raising the price of the dollar in the local markets, while stressing that he continues his work through currency auction, noted that the precautions Cash existing reassuring…
He denied the Iraqi Central Bank, the rumors about the storming of its premises or that there is a lack of liquidity or stop the process of sale to the dollar, noting that some of the “abusers” are taking advantage of statements made ​​by officials to manipulate exchange rates in the markets.
In the meantime, economists favored the expiry of the current crisis During the next week, calling the official authorities to take urgent measures in order to maintain hard currency prices.
He says Director General of the cabinets and the version in the central bank Ahsan Shomran Yasiri in an interview with “New Morning”, that “a new war waged on Iraq added to the current challenges and so During delude citizens that the economic situation is in danger.
“Yasiri said that” speculators seeking by broadcasting rumors to confuse the Iraqi financial situation, “pointing out that” adequate precautions and not worrying.
“He pointed banking official to be” the central bank continuously work in currency auction on according to legal procedures and that things are going according to normal procedures.
“In a related development, the bank said in a statement received” morning new “that” rumors that were fired on storming the central bank or that there is a lack of liquidity or stop the process of sale to the dollar baseless “, denying “the rumors in toto.”
The bank said it “continues to work window sell the currency and meet the market needs of the dollar in light of the strength of its reserves of foreign currency,” adding that “some of the speculators and other abusers who, during the past few days to exploit the statements of some officials and politicians, as reflected manipulating exchange rates in the local market.
He called on Bank of citizens and the media to” be alert to these malicious rumors, which aims to confusion and confuse the Iraqi market within the campaign waged by the enemies of our country.
“For his part, sees economist Maitham coffee in Commenting to the “New Morning”, that “the statements Almichjnh to some politicians and pessimism about the state’s inability to fulfill the salaries and the continuation of the financial crisis are all factors that led to the rise of the dollar, in conjunction with the continuing decline of international oil market.”
The mortgage and coffee, “the dollar return to the previous status the ability of the central bank to defend the official prices normal without the impact of what is happening in the market today. “He added that” this would be through an increase in the dollar amounts in the currency auction, in addition to the delivery of reassuring messages to the street dispel fears that prices will continue to rise.
“But he worried of “survival of the current situation, which leads to a complete consumption of the bank’s reserves 54 trillion dinars in two years.” In this case, coffee asserts that “Iraq will be in front of two choices: either to reduce salaries and imposing new taxes and this difficult choice will play Rose angry reaction from the street .
“He added,” The second solution is by borrowing either from the central bank or private banks or individuals, “pointing out that” past experiences indicate the adoption of the government to borrow from the central bank to increase the national currency pump leads to lower purchasing power. “But Expert other, Abbas Ghalibi likely in his statement to the “New Morning”, the return of dollar prices to normal at the end of next week.
He said, “taking place now and a temporary increase, may not exceed in the harshest dollar the 1130 conditions dinars,” calling “the central bank to immediately intervene to order an end to this situation. “said Ghalibi” on the bank to impose the official prices, and do special work laws, in addition to exercise its oversight role in pursuing money laundering operations and other legal violations including things back to normalcy and conducts positive messages to the street possibility control of the economic situation.
“It is noteworthy that Iraq is suffering from the global economic crisis because of the collapse in oil prices led to take a number of austerity measures at all levels.