The news now from Iraq is all about two issues now: 1) paying out the salaries and pensions and catching up on owed bills; 2) getting investors to take hold in Iraq and the switchover from a CENTRALIZED GOVT RUN economy to a FREE MARKET economy. I do not know how the full extent of these two main issues matter for the timing of the reinstatement, but I will say this: 1) The IMF has always had a mandate that Iraq be able to pay its bills on time. They want Iraq to move forward to a more timely monthly payment schedule. This is monetary stability.
2) Also we know that a FREE MARKET economy will force Iraq to deal with international trade and so how cumbersome will this conversion of dinars to dollars $$$ be in draining the CBI reserves by these currency auctions? They will have to move to a floating rate dinar and reinstate it to be ultimately successful in this FREE MARKET economy if this is truly where they want to go. Oh – but we also know that they can not move to reinstate the dinar unless the also complete the “project to delete the zeros”. The two efforts are interconnected. There is much resistance to both ideas and many economists have their opinions of the effects of both of them and so you see the real set of problems here?
I have told everyone this before but…we might just be waiting until Jan 2020 again. This is of course the worst scenario…I have also said… that I do not see much more that the CBI has to do to move ahead to the final step with the project to delete the zeros. It appears they take giant leaps and bounds and then just stall again. … We all know this situation if very fluid and changes almost daily. …So right now, unless we see some different signs, we must cool down our anxieties, relax and let Iraq do what it does.