Article: “IMF thank Iraq on “fruitful cooperation and candor,” the first revision of the standby credit agreement”
I just love how the IMF works. It is clear, the SBA was the roadmap. And these subsequent meetings in Jordan check progress before the next installment loan. It is very obvious, the CBI was behind on the conditions the SBA “plan” had for the banking system. So they get their orders and return to Iraq and have 30 or so days to get caught up before the next October meetings.
This should get us all excited…From the IMF SBA…: “The authorities will gradually remove remaining exchange restrictions and multiple currency practice (MCP) (MEFP, 14). 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 investor community that Iraq is committed to maintain an exchange system that is free of restrictions and MCPs for current international transactions and thus facilitate creation of a favorable business climate.9 As a first step, the Council of Ministers will approve and introduce to parliament an amendment of the Investment Law, or the CBI will issue clarifying implementing regulations, to remove the limitation on transfer of investment proceeds that gives rise to an exchange restriction (SB, Table 5), as recommended by a recent technical assistance mission of the IMF.
As a second step, the CBI will increase the sale of foreign exchange for valid current exchange transactions on the official market in order to reduce the spread between the official and parallel exchange rates (10). In particular, the CBI will, by the end of 2016, make the weekly limits on the purchase of cash at the weekly foreign currency auctions indicative, in the sense that any bank requiring additional cash for legitimate travel expenses for its clients will be able to obtain the required amount above these limits on the basis of appropriate documentation.”
So we can see here that the CBI is doing exactly what the IMF dictated. And they are moving closer to accepting the obligations (don’t know the date) of Article VIII. Which we all know Article VIII is the “key” to make the dinar internationally convertible and as a result would remove the dinar from the peg at that time and allow it to float.
IMO, they are moving towards the goals of early 2017 (remember the 3 notes the CBI wants to bring out!) Gotta love the line….
“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 investor community”
It really is fantastic news because the IMF is not going to let the CBI and banking system stay closed to the world much longer. The plan is in action.
