Article: “Governor of the Central Bank of Iraq will receive substantial financial support soon”
Iraq still needs loans even after they change the value of their currency and they need huge infusion of capital because fiscally, they are still draining whether they raise the value of their currency or not.
The advantages to raising the value are many…1st is investment.
With an international Article Viii currency companies are more apt to invest large sums in Iraq because they see an easy path to get their money out.
Secondly, it will stop the auctions because there usefulness will have run its course due to Iraqi companies not needing to convert to USD before they pay.
No more remittances needed.
No more systemic theft through the auctions.
Third they will be pulling in dollars and letting dinars out as long as the rate is attractive enough, meaning the spread between the program rate and street rate disappears.
Auctions will no longer be a vehicle with which speculators make a short profit and devalue the dinar and the CBI is expecting a resurgence in people coming back to use the banks again.
These and many other reasons by raising the rate and going to Article VIII, will help Iraq immensely.
