Sheila1: Welcome to Iraq Finance 2019
Iraq is open for business and 2019 will be a decisive year for the country as its new government begins to kick-start huge infrastructure projects. This process promises to open up a vast range of financing opportunities.
Significant investments are needed in to rebuild the badly damaged infrastructure of the country.
Long-awaited structural and administrative reforms are being implemented, revealing the immense investment potential in an economy poised for expansion. Iraq’s new government is committed to continuing this ambitious path by building on hard won improvements in security and promoting transparency in the economy, and at all levels of government.
Iraq is opening up for privatization and is offering improved opportunities for foreign direct investment across the whole economy. The aim is to curtail the country’s dependence on oil revenues. Iraq is seeking new partnerships to fund multi-billion-dollar O&G, electricity and transportation projects as well as to address urgent fiscal and administrative reform issues. In particular, the country is seeking international partners to modernize its financial services infrastructure.
Connecting Iraq with global decision-makers, Iraq Finance 2019 is an event too important to miss. Under the Patronage of the Governor of the Central Bank of Iraq, Iraq Finance 2019 will gather key Iraqi officials, over 200 international investors, global corporate leaders, bankers, financial and legal professionals, as well as the most influential personalities on the banking sector in the region, in a unique and focused event.
Don961: 3 of the 6 graphics scrolling on the top of the opening page display images on various currency notes …
Moparman: IMO, this says it all. The long wait is just about over.
BlaqueBeauty: Is this an Art8 announcement…………….just hoping BIG …….
Iobey777: IMO, no, but …it might as well be!! IMO, we will see some kind of “official” announcement from the GOI, hopefully(prayerfully) long before this meeting!!
Sunkissed: Because of the article in which Iraq was complaining about being “pegged” to a basket of currencies and to the any currency of lower value than the IQD, and the economists concern that being pegged would adversely influence the value of the IQD, I thought it may be helpful to post the definitions of the different types of listings in Forex
A Floating Exchange Rate in which a government intervenes at some frequency to change the direction of the float by buying or selling currencies. Often, the local government makes this intervention, but this is not always the case. For example, in 1994, the American government bought large quantities of Mexican pesos to stop the rapid loss of the peso’s value.
Strictly speaking, even a central bank’s intervention to raise or lower interest rates could be considered a managed float. However, because most floating currencies manage their regimes with occasional central bank involvement, the term applies mainly to frequent or dramatic interventions, which is often referred to as a dirty float.
Free Floating Exchange Rate (Also called Flexible Exchange Rate)
The exchange rate in which the value of the currency is determined by the free market. That is, a currency has a floating exchange rate when its value changes constantly depending on the supply and demand for that currency, as well as the amount of the currency held in foreign reserves. An advantage to a floating exchange rate is that it tends to be more economically efficient. However, floating exchange rates tend to be more volatile depending on the particular currency. A currency with a floating exchange rate may undergo currency appreciation or currency depreciation, depending on market fluctuations (often referred to upward and downward pressure)
An exchange rate between two currencies that is allowed to fluctuate with the market forces of supply and demand. Floating exchange rates tend to result in uncertainty as to the future rate at which currencies will exchange. This uncertainty is responsible for the increased popularity of forward, futures, and option contracts on foreign currencies.
Fixed Exchange Rate (Also known as Pegged Exchange Rate)
An exchange rate for a currency where the government has decided to link the value to another currency or to some valuable commodity like gold. For example, under the Bretton Woods System, most world currencies fixed themselves to the USD which in turn had fixed itself to gold.
A government may fix its currency by holding reserves of the peg (or the asset to which it is fixed; when the USD was gold-backed it was pegged to the price of gold) in the US Treasury. For example, if a country fixes its currency to the British Pound, it must hold enough pounds in reserve to account for all of its currency in circulation. Importantly, fixed exchange rates do not change according to market conditions.
Dual Exchange Rate
A situation in which a currency has two official exchange rates: one pegged to another currency and the other is Free Floating. Each is used for different things. The exchange rate for money used for sectors seen as essential, such as food, is fixed, while “non-essential” sectors are allowed to float. A dual exchange rate allows a country to endure a devaluation its currency to reflect its current market realities without the risk of high inflation that usually accompanies severe devaluation.
Critics allege that a dual exchange rate mechanism is less efficient and acts as a tariff on the government.
The advantages of dual exchange systems are tied primarily to their ability to prevent capital movements from affecting the current account and the exchange rate for current transactions by separating the exchange market for capital transactions and the exchange market for current transactions.
Is Iraq using a Dual Exchange Rate now (On the wholesale Forex Platform)?
If so, in the short-run, it insulates the balance of payments from short-term capital movements while providing exchange rate stability for commercial transactions.
This mechanism cannot be sustained for the long-haul, because it is expensive to maintain and has too much exposure in the black market.