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(We at Recaps wish to thank OOTW & Butifldrm for their very labored and in depth work on this lengthy informative post – We are happy to share with our readers  – We appreciate all of our contributors and readers)
Wealthwatch  Monday Night OOTW Chat 1-12-16   Part 1 of 4
Donnie: 1/12/2016 0:00 BAGHDAD Shaima Rashid expressed Security Committee and Parliamentary Defense, its intention to approve the Interior Ministry Act during the next legislative term, stressing that the law to withdraw from the ministry to add paragraphs suit the current phase,

as shown committee of parliamentary power, oil and gas law, the most prominent laws that the Commission intends to approval, at a time when the House resumes the second legislative term sessions, on Tuesday of next week, corresponding to January 19.
Donnie: Legal and parliamentary directed the Interior Ministry to pass .., oil and gas alsabaah.iq/ArticleShow.a…
Doug_W: I sure hope it passes the HCL  Doug_W: ‹@Donnie› ty that IS great news
OOTW:
http://wealthwatch.world/blab/attachments/9c1fc5a985e5e564d0d663dc12bfcedb.png
OOTW: THANK YOU SCZIN11   OOTW: www.wealthwatch.world/sho…
http://www.wealthwatch.world/showthread.php?tid=3730
OOTW: THIS IS A LETTER OF INTENT PUBLISHED TODAY AT THE IMF SITE
OOTW: I WILL POST CONTENT IN TWO TICS
OOTW: i cannot copy or paste this hang on
OOTW: Page 1 International Monetary Fund Iraq and the IMF Press Release: IMF Managing Director Approves a Staff- Monitored Program for Iraq January 12, 2016 Country’s Policy Intentions Documents E-Mail Notification Subscribe or Modify your subscription Iraq: Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding December 22, 2015
The following item is a Letter of Intent and a Memorandum of Economic Policies of the government of Iraq. It is being made available on the IMF website by agreement with the member as a service to users of the IMF website. This memorandum describes the policies that Iraq is implementing in the framework of a staff-monitored program.
A members’s staff-monitored program is an informal and flexible instrument for dialogue between the IMF staff and a member on its economic policies. A staff-monitored program is not supported by the use of the Fund’s financial resources; nor is it subject to the endorsement of the Executive Board of the IMF
OOTW: THEN WE HAVE THIS FROM THE IMF AS WELL  www.imf.org/external/pubs
http://www.imf.org/external/pubs/ft/scr/2016/cr1611.pdf
OOTW: 20. The government will gradually remove remaining exchange restrictions and multiple currency practice (MCP) with a view to eliminating exchange rate distortions (MEFP, ¶19). 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 investment community that Iraq is committed to maintain an exchange system that is free of restrictions and MCP for current international transactions and thus facilitate creation of a favorable business climate.
As a first step, the government will, by end-February 2016, amend the Investment Law, or issue clarifying implementing regulations, to remove the limitation on transfer of investment proceeds that gives rise to an exchange restriction, as recommended by a recent technical assistance mission of the IMF.
OOTW: WOAH  OOTW: Exchange Arrangement Iraq’s de jure and de facto exchange rate arrangements have been retroactively reclassified to a conventional peg arrangement, effective January 15, 2012.
The Central Bank Law provides the Board of the CBI with power to formulate exchange rate policy, and the Board has maintained its policy to keep the official exchange rate at 1,166 per U.S. dollar since January 15, 2012. The CBI stands ready to provide foreign exchange at the official exchange rate plus commissions for permissible transactions through its daily auctions (allocations), establishing a peg. However, because certain transactions are excluded from the access to the CBI auctions, many transactions take place at parallel market exchange rates.
The CBI publishes the daily volume of the auction allocation on its website. Iraq continues to avail itself of the transitional arrangements under Article XIV, Section 2 but no longer maintains any exchange restrictions or multiple currency practices subject to Article XIV, Section 2, and currently maintains three exchange restrictions and one multiple currency practice (MCP) subject to Fund approval under Article VIII, Sections 2(a) and 3.
OOTW: WTH IS THIS?  OOTW: October 2008 Article VIII acceptance
OOTW: AND AGAIN HERE
OOTW: October 2012 Article VIII acceptance and AML/CFT technical assistance
OOTW: PERHAPS JUST AN ACCEPTANCE OF ART VIII GUIDANCE NOT IMPLEMENTATION
OOTW: OBVIOUSLY
Doug_W: fingers crossed
OOTW: SO THIS PDF IS STATING THAT IRAQ ACCEPTED ARTICLE VIII IN 2008 AND 2012 AND THAT THE 2012 ACCEPTANCE ALSO CONTAINED GUIDANCE TOWARDS COUNTERFEITING AND ANTI MONEY LAUNDERING
OOTW: OKAY AND COMBATING THE FINANCE OF TERRORISM  OOTW: THAT’S “CFT”
OOTW: OKAY I’M GOING TO START FROM THE BEGINNING OOTW: THIS WILL BE LENGTHY
OOTW: January 12, 2016 IMF Managing Director Approves a Staff-Monitored Program for Iraq The Managing Director of the International Monetary Fund (IMF) approved a StaffMonitored Program (SMP) 1 for Iraq covering the period of November 2015-December, 2016, on which the authorities and staff had reached ad-referendum agreement in November 2015 (see Press Release No. 15/509). Iraq is facing a double shock arising from ISIS attacks and the sharp drop in global oil prices.
The conflict is hurting the non-oil economy through destruction of infrastructure and assets, disruptions in trade, and deterioration of investor confidence.
The impact of the oil price decline—already felt in 2014—intensified in 2015, affecting the budget, the external sector, and medium-term growth potential. The authorities are responding to the crisis with a mix of fiscal adjustment and financing.
OOTW: To help address the present and urgent balance of payments and budget needs triggered by the ISIS attacks and the collapse in oil prices, the authorities have also requested an SMP to establish a track record of policy credibility to pave the way to a possible Fund financing arrangement.
Under the SMP, the authorities will implement fiscal consolidation that will contain public expenditure in line with available revenue and financing, and aim to reduce the non-oil primary deficit by US$20 billion or 12 percent of non-oil GDP between 2013 and 2016.
Under the SMP, agreement has also been reached on measures to strengthen public financial management, anti-money laundering and countering the financing of terrorism (AML/CFT), and financial sector stability.
OOTW: SMP = SELF MONITORING PROGRAM
OOTW: The IMF has assisted Iraq in strengthening economic institutions and in providing advice to the government on economic policies and reforms for more than a decade. IMF staff will work closely with the authorities to monitor progress in the implementation of their economic program. In addition, the IMF will continue to provide technical assistance to support Iraq’s capacity-building efforts and its reform program
OOTW: 1 An SMP is an informal agreement between country authorities and Fund staff to monitor the implementation of the authorities’ economic program. SMPs do not entail financial assistance or endorsement by the IMF Executive Board.
OOTW: KEY ISSUES Context: Iraq is facing a double shock arising from the ISIS attacks and the sharp drop in global oil prices. The conflict is hurting the non-oil economy through destruction of infrastructure and assets, disruptions in trade, and deterioration of investor confidence.
The impact of the oil price decline—already felt in 2014—has fully unfolded in 2015, affecting the budget, the external sector, and medium-term growth potential. The authorities are responding to the crisis with a mix of fiscal adjustment and financing, maintaining their commitment to the exchange rate peg.
OOTW: BREAK – IRAQ IS TRYING TO ADDRESS THIS – BY PREPARING FOR PRIVATE SECTOR DEVELOPMENT/ LAUNCHING – OF WHICH I GAVE A CHAT TODAY – FORWARD PROGRESS ON THIS
OOTW: RETAINING THEIR PEG TO THE DOLLAR
OOTW: Staff-Monitored Program: To help address the present and urgent balance of payments and budget needs triggered by the ISIS attacks and the collapse in oil prices, the authorities have requested a Staff-Monitored Program (SMP) to establish a track record of policy credibility to pave the way to a possible Fund financing arrangement.
Outlook and Risks: Assuming a resolution of the conflict in the coming years and a pickup in oil production together with the envisaged modest recovery in oil prices, the baseline medium-term outlook still looks positive.
Under improved security conditions, the macroeconomic scenario would continue to be driven by the expansion in oil revenue, assuming implementation of oil investment to increase oil production, and by fiscal adjustment. But risks remain very high, arising primarily from a further fall in oil prices, worsening of the conflict, political tensions, or poor policy implementation.
OOTW: “But risks remain very high, arising primarily from a further fall in oil prices, worsening of the conflict, political tensions, or poor policy implementation.”
OOTW: Key Policy Recommendations:  In 2015-16, strong fiscal consolidation is needed to address the fall in oil revenues and contain central bank financing of the budget and associated losses in foreign exchange reserves.
The exchange rate peg remains appropriate, provided that the authorities implement the fiscal consolidation programmed under the SMP.  Public Financial Management needs to be overhauled in order to improve the quality of spending and the authorities’ control over budget execution.  Banking supervision needs to be strengthened in order to monitor and contain the damage inflicted by the crisis on the banking system.
OOTW: Discussions took place in Amman during October 27—November 11, 2015.
OOTW: BACKGROUND: IRAQ IS FACING AN ACUTE FISCAL AND BALANCE OF PAYMENTS CRISIS 1. The economy has been hit hard by the collapse in oil prices and the ISIS attacks.
The external environment has worsened since the latest Article IV consultation1 mainly owing to further weakening of global oil prices. The ongoing armed conflict with ISIS continues to strain the country’s resources and is resulting in new waves of internally displaced people.
OOTW: A. Background 2. Iraqi forces are making progress in retaking territories controlled by ISIS. In October, Iraqi forces and their allies recaptured most of the country’s largest oil refinery in Baiji, a strategic city between Baghdad and Mosul.
In November, Kurdish forces took control of towns and sections of highway around Sinjar, between Mosul and the border with Syria. In December, the Iraqi forces and their allies launched a major offensive to retake control of Ramadi, west of Baghdad.
OOTW: 3. The ISIS attacks has boosted the number of internally displaced persons—estimated at 4 million people at end-June 2015 (Memorandum of Economic and Financial Policies—MEFP, ¶3). Close to 10 million Iraqis (almost one third of the population) including 250,000 Syrian refugees need humanitarian assistance.
OOTW: 4. In response to escalating protests across the country fueled by massive electricity outages, Prime Minister Abadi proposed a series of significant administrative reforms in August (MEFP, ¶4). Parliament approved a number of these measures, including reducing the cabinet from 33 to 22 members,
eliminating three vice-president and three deputy prime minister positions, addressing tax evasion, implementing customs at border points including within KRG, reducing security budgets and lowering pension ceilings and salaries for some officials.
Nonetheless, Iraqis have continued to protest against the lack of progress to implement these measures to date and demanded decisive steps to address widespread corruption, inefficiency, and low quality of government services.
OOTW: B. Recent Economic Developments 5. Oil production, located in areas under control of the Iraqi government and the KRG, is holding well. For the first 11 months of 2015, it increased by 14 percent and oil exports increased by 23 percent year-on-year.
Northern oil exports accelerated in line with the oil revenue sharing agreement between the federal government and the Kurdistan Regional Government (KRG) until June, when the KRG, dissatisfied with the size of the federal transfers, drastically reduced oil supply to the State Oil Marketing Organization (SOMO) and increased its independent sales to finance its expenditure.
2 In November, oil production and exports reached all time highs of, respectively, 4.2 and 4 million barrels per day (mbpd). Exports by the federal government reached 3.4 mbpd and KRG exports 0.6 mbpd
OOTW: 6. Non-oil activity in the part of the country that is not occupied by ISIS dropped by 8 percent year-on-year during the first semester of 2015.
The fall was particularly high in construction (-64 percent), manufacturing (-20 percent) and business services (-57 percent). The government has no information on economic activity in the ISIS-controlled territories.
7. At end-October 2015, y-o-y consumer price inflation (CPI) was low at 1.6 percent, but is likely underestimated because CPI coverage excludes areas occupied by ISIS.
OOTW: 8. Broad money stayed flat at end June year-on-year and reserve money contracted by 13 percent at end-September 2015 likely reflecting lower government spending and weakening non-oil economic activity.
9. The balance of payments registered a deficit during the first ten months of the year which was financed by the use of foreign exchange reserves. Gross foreign exchange reserves of the Central Bank of Iraq (CBI) stood at $59 billion (10 months of imports of goods and services) at end-October compared to $67 billion (13 months of imports of goods and services) at end-2014.
OOTW: THIS IS WHY THEY HAVE TO GET THEIR PRIVATE SECTOR LAUNCHED
OOTW: BUTI REMINDED ME WE DNT HAVE STATISTICS WHILE MALIKI WAS IN OFFICE BECAUSE HIS REGIME THOUGHT IT WAS BETTER THAN THE IMF LOL
OOTW: THEY DIDN’T REPORT THEM
OOTW: 10. The spread between the official and the parallel foreign exchange market rate receded to around 2 percentage points since August from as high as 16 percentage points in June, as a result of the elimination of the obligation to pay custom duty and income tax payments when buying foreign exchange.
11. Public expenditure was compressed owing to the tight financing constraints (Tables 2-4). During the first eight months of the year, total spending was about 30 percent lower than the path assumed in the budget.
Both oil and non-oil investment bore the brunt of the fiscal consolidation during the first eight months of the year but the authorities have cleared all outstanding arrears to international oil companies (IOCs) in an amount of $3.5 billion and reached
OOTW: 2 Under the agreement between the KRG and the federal government, the revenue from the oil extracted in KRG accrues to the federal government and the federal government makes transfers to the KRG equivalent to 17 percent of a subset of total expenditure.
OOTW: (THATS A FOOTNOTE)
OOTW: agreement with them on the level of oil investment in 2015 and 2016 that will increase oil production. The resulting deficit of ID 11 trillion (5 percent of GDP) was financed mostly by the issuance of T-bills subscribed by the state-owned banks Rasheed and Rafidain, out which 4 trillion was refinanced at the discount window of the Central Bank of Iraq (CBI).
The deficit was also financed by the accumulation of domestic arrears estimated at ID 5 trillion (2.5 percent of GDP) at end-April 2015, and a loan of $1.2 billion under the Rapid Financing Instrument (RFI) approved by the IMF Executive Board on July 29, 2015.
OOTW: 12. The government decided to postpone the issuance of Eurobonds. As part of the preparation to issue Eurobonds to help finance the large fiscal deficit, the Fitch Ratings agency gave a sovereign rating of B- to Iraq.
In light of the lack of appetite shown by investors for the proposed Eurobonds during a road show in London and New York in September and the high interest rate required (11.5 percent), the government decided to postpone the issuance of $2 billion it planned in 2015.
OOTW: BUTI REMINDED ME THAT WHEN THE STATEMENT REGARDING ISSUING BONDS CAME OUT, THEY STATED THEY WOULD BE SOLD IN DOLLARS, AND WE SEE IN THIS REPORT THEY WERE TO BE SOLD IN EUROBONDS
OOTW: C. Outlook 13. In spite of further weakening global oil prices, the fiscal and balance of payments outlooks have improved since the last Article IV consultation assessment owing to a larger than projected fiscal consolidation (¶11, Text Table 1 and Tables 1–7).
An increase of oil production by 10 percent of GDP will allow real GDP to grow by 1.5 percent in 2015, in spite of a further weakening of non-oil activity on the back of lower capital spending (¶¶5 and 10 and Table 1).4 In 2016, real GDP growth should rebound to 11 percent thanks to the projected 20 percent increase in oil production,5 despite flat non-oil GDP.
OOTW: SO THE GOOD NEWS IS THAT ACCDNG TO IMF THEIR GDP SHOULD REBOUND TO 11% DUE TO 20% PROJECTED INCREASE IN OIL PRODUCTION TY BUTI – YES, THIS IS GOOD NEWS
 
Wealthwatch  Monday Night OOTW Chat 1-12-16   Part 2 of 4
OOTW: The fall in oil prices since mid-2014 is expected to increase the current account deficit from 1 percent of GDP to 7 percent of GDP in 2015 and 6 percent of GDP in 2016 (Table 5).
Because of debt amortization, arrears repayment, and private capital outflows, the overall balance of payments deficit could reach 8 percent of GDP in 2015 and 6 percent of GDP in 2016, of which the financing will involve a large drawdown of official foreign exchange reserves.
Reserve coverage would fall from 13 months of imports of goods and services in 2014 to 7 months in 2016.
The fall in oil prices is also causing a sharp deterioration of the fiscal position with the budget deficit increasing from 6 percent of GDP in 2014 to 15 percent of GDP in 2015 and 10 percent of GDP in 2016 (provided measures discussed below are implemented), and the total public debt increasing from 39 percent of GDP in 2014 to 66 percent of GDP in 2016. In the medium term, the outlook should improve as oil production expands further,
OOTW: BEAR WITH ME I’M TRYING TO GET SOMETHING
Doug_W: ok
OOTW: BUTI IS REMINDING ME THAT IRAQ HAS A VERY LOW DEBT RATIO VS GDP
OOTW: THEY’RE DOING WAY BETTER THAN US
OOTW: FOOTNOTES
OOTW: 4 In 2015, real GDP growth has been revised upwards from 0.5 percent to 1.5 percent in light of actual half-year outturn for the non-oil economy (minus 8 percent y-o-y compared to minus 11 percent for the whole year in the last Article IV Staff Report).
5 This high oil growth rate in 2016 stems partly from the fact that oil production includes KRG production for only 6 months in 2015 but for 12 months in 2016.
Assuming constant oil production in KRG in 2015, oil growth would be reduced to 16 percent in 2016. The oil production level of 4.1 mbpd programmed in 2016 was already reached in November 2015 (¶5).
OOTW: www.statista.com/statisti…
http://www.statista.com/statistics/268177/countries-with-the-highest-public-debt/
OOTW: oil prices recover somewhat, and progress is made to retake territories controlled by ISIS, allowing a rebuilding of foreign exchange reserves to about 10 months of imports of goods and services by 2020.
OOTW: A. Implementing a Large Fiscal Consolidation 14. In order to maintain macroeconomic stability, the government has been implementing a large fiscal consolidation to bring spending in line with available resources in 2015 and 2016 (MEFP, ¶21; Text Table 2 and Tables 2-4).
This requires: (i) a sizable reduction in the non-oil primary balance6 (quantitative targets, MEFP, Table 1), of about 12 percent of non-oil GDP (ID 24 trillion, or $20 billion) over 2013–16;7 and
(ii) a large increase in mostly domestic but also external financing over the short run that will remain compatible with debt sustainability in the medium run. In order to minimize the impact of the fiscal consolidation on the population, the government will protect social spending, i.e., spending on health and education, transfers in support of the social safety net and assistance for internally displaced persons and refugees (MEFP, quantitative targets, Tables 1 and 3). The ongoing fiscal consolidation in reaction to cash
OOTW: NOTE – I AM POSTING THIS PRIMARILY SO THAT I MAY COPY AND PASTE THIS FROM CHAT SO IT IS MORE LEGIBLE
OOTW: IF ANYONE HAS ANY QUESTIONS, SHOOT
OOTW: constraints is bringing the non-oil primary balance closer to a level aligned with sustainable public spending under the permanent income hypothesis (PIH).8
OOTW: 15. The fiscal consolidation mostly stems from expenditure cuts in non-oil investment and goods and services (MEFP, ¶¶22-26). Non-oil investment is programmed to be cut by 14 percent of non-oil GDP over 2013–16, or slightly more than the 12 percent of non-oil GDP reduction in the non-oil primary balance.
According to the last World Bank Expenditure Review, the efficiency of public investment in the non-oil sector is low because of severe weaknesses in public financial management.9 Goods and services and transfers will also be cut by sizable amounts of, respectively, 5 and 2 percent of non-oil GDP.
Kuwait’s agreement to postpone the final war reparation payment in an amount of $4.6 billion (4 percent of non-oil GDP) from 2015 to 2017 will also help to implement the programmed fiscal consolidation.
No contribution to the fiscal consolidation is expected from non-oil revenue that is programmed to slightly contract (by 0.2 percent of non-oil GDP) over 2013–16, reflecting the loss of control or closures of some tax and customs offices in the ISIS-occupied territories (¶2) and the drop in non-oil economic activity (¶¶6 and 13), in spite of the increase in wage taxation in 2016, which will increase revenue by ID 1 trillion by reducing the tax exempt-tranche of wages.
The programmed fiscal consolidation does not affect wages and pensions, which will record a sizeable increase (by 9 percent of non-oil GDP over 2013-16) partly justified by the need to increase the security payroll to fight ISIS but also exacerbating the already oversized government payroll, which is a major weakness of Iraq’s public finances.10
OOTW: 16. In spite of the fiscal consolidation, the government will still face a large budget deficit both in 2015 and 2016 that will be financed mostly by indirect monetary financing and the associated drawdown in official foreign exchange reserves (MEFP, ¶¶22-26).
The fiscal deficit is projected to rise from 6 percent of GDP in 2014 to 15 percent of GDP in 2015 and 10 percent of GDP in 2016, despite significant scaling back of spending in the face of financing constraints.
In 2015, the deficit will be partly financed through domestic arrears, the size of which has been assumed to be the amount identified at end-April (2.5 percent of GDP, ¶11) but will be more fully known in February 2016 once an examination currently underway is completed (¶22).
The authorities are committed not to accumulate arrears going forward, and to pay those already accumulated over the next few years in line with their financing capacity and after auditing.
The 2015 budget deficit will be also be financed by the issuance of Treasury bills, out of which about half will be refinanced by commercial banks at the discount window of the CBI.
The external financing in 2015 will consist of the loan from the IMF under the RFI (¶11), a Development Policy Loan by the World Bank ($1.2 billion) to be disbursed in December 2015 and project loans by the World Bank ($19 million), the Japan International Corporation Agency (JICA, $307 million), and Italy ($40 million).
No financing gap is foreseen in 2016 under the authorities’ planned policies; the deficit is expected to be mostly financed by domestic bank financing, half of which would again be refinanced at the discount window of the CBI because banks’ liquidity is constrained. In 2016, some
OOTW: WHAT WAS OIL AT TODAY? ABOUT 31.00 ?
OOTW: REMEMBER THAT WHEN OIL DROPS NOT ONLY DOES IT HURT ECONOMIES, BUT IT ALSO HURTS ISIS
OOTW: drawdown of government deposits in the banking system and issuance of bonds aimed at the general public including the Iraqi Diaspora is also envisaged. Project loans disbursement should amount to $1.1 billion. Issuance of Eurobonds in an amount of $2 billion is planned during the second half of the year. The government will stop using arrears to finance spending in 2016 (zero ceiling on external arrears, continuous target, MEFP, Table 1; and measures to survey, audit and pay domestic arrears in ¶23).
The domestic financing, half of which is indirect monetary financing, will lead to a sharp increase of the public debt and contribute to a large foreign exchange reserves drawdown to finance government imports.
OOTW: 17. Based on the current information on domestic arrears, most of the fiscal adjustment is envisaged to have taken place in 2015, building on the adjustment already implemented during the eight first months of the year (¶11). When corrected for an equal treatment of the KRG (¶14, footnote 4), the non-oil primary balance will be reduced from a deficit of 69 percent of non-oil GDP in 2013 and 2014, to a deficit of 56 percent of non-oil GDP in 2015 and 2016.
This path of the fiscal adjustment is based on the level of spending financed by the accumulation of domestic arrears identified so far in 2015, i.e., ID 5 trillion (¶15, 4 percent of non-oil GDP). When the true level of spending financed by arrears will have been identified (¶23), it is possible that the fiscal adjustment in 2015 will turn out to have been less than presently estimated, and consequently adjustment in 2016 would need to be greater than presently envisaged in order to meet the nominal deficit target that has been agreed.
OOTW: 18. On December 2, 2015, the government introduced amendments to the draft 2016 budget it sent to Parliament in October to bring it into line with the fiscal framework agreed under the SMP, thereby meeting the prior action for management approval (MEFP, Table 2).
In line with the ad referendum agreement reached with staff in November, the spending level of the amended budget is close to the initial draft budget but the financing structure is very different with much lower external financing expected in the amended draft budget.
OOTW: “EXTERNAL” WOULD BE ANY ENTITY OUTSIDE OF IRAQ INCLUDING THE IMF
OOTW: B. Managing External Pressures 19. The government will maintain the Iraqi Dinar’s peg to the U.S. dollar (MEFP, ¶18). The peg provides a key nominal anchor in a highly uncertain environment with policy capacity weakened by the conflict with ISIS. Accommodating external shocks through more exchange rate flexibility—as opposed to fiscal adjustment—is not advisable.
A small devaluation would not alter the need for fiscal adjustment much11 but risk undermining confidence in Iraq’s foreign exchange regime and the nominal anchor it provides. A large devaluation could aid fiscal adjustment— provided the government could resist subsequent pressures to raise wages and other budget allocations—but at the risk of exacerbating already difficult social tensions and could trigger a
OOTW: spike in inflation as most food needs and consumer items are imported. Moreover, devaluation would have little impact on exports, which are almost exclusively oil and oil-related products. 20.
The government will gradually remove remaining exchange restrictions and multiple currency practice (MCP) with a view to eliminating exchange rate distortions (MEFP, ¶19).
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 investment community that Iraq is committed to maintain an exchange system that is free of restrictions and MCP for current international transactions and thus facilitate creation of a favorable business climate.
As a first step, the government will, by end-February 2016, amend the Investment Law, or issue clarifying implementing regulations, to remove the limitation on transfer of investment proceeds that gives rise to an exchange restriction, as recommended by a recent technical assistance mission of the IMF.
OOTW: REPEAT
OOTW: “provided the government could resist subsequent pressures to raise wages and other budget allocations—but at the risk of exacerbating already difficult social tensions and could trigger a spike in inflation as most food needs and consumer items are imported.”
OOTW: THEY HAVE TO GET EXPORTS GOING AND NOW
OOTW: THEY HAVE TO OFFSET THE HIGH COST OF NECESSARY GOODS FOR THE PEOPLE
OOTW: 21. The government will implement reforms on anti-money laundering and combating the financing of terrorism (AML/CFT) (MEFP, ¶20). This would improve the integration of the domestic financial system into the global economy and lower transaction costs, improve governance, and reduce the size of the informal sector. As a first step, the government will, by endFebruary 2016, draft and adopt a by-law to set up a mechanism to comply with the relevant AML/CFT international standards
OOTW: C. Strengthening Public Financial Management 22. A weak PFM framework has resulted in the lack of fiscal discipline and overly politicized allocation of oil resources. The IMF and the World Bank have provided technical assistance on key PFM aspects, but there has been very slow progress so far.
The authorities have shown keen interest to introduce program (i.e., results-based) budgeting, but this seems premature in light of several fundamental PFM weaknesses that still need to be resolved.
OOTW: 23. In order to strengthen fiscal discipline, the government will implement key measures in the short run on which to build more ambitious reforms later on (MEFP, ¶27): The Minister of Finance will approve a new draft of the Financial Management law in line with World Bank and IMF comments on the last draft submitted to the Shura Council (Council of State, structural benchmark for the second review; MEFP, Table 2).
The Ministry of Finance and the Ministry of Planning will survey, audit and pay domestic arrears. As a first step, the Ministry of Planning will complete, by end-February 2016, a survey of domestic arrears on investment spending accumulated by all ministries as of end-September 2015 (structural benchmark, Table 2) and the Ministry of Finance will complete a survey, also by end-February, on current spending arrears accumulated by the same units as of end-September.
In addition, they will complete surveys of domestic arrears at end-December 2015 by end-March 2016 and at end-March 2016 by end-May 2016, the latter one to check that no arrears are incurred in 2016. On the basis of each of these surveys, the government will prepare plans for
OOTW: the orderly payment of these arrears, which will include an independent audit of these arrears and a repayment schedule in line with its financing capacity. As of end-April 2015, the government identified ID 7.3 trillion in domestic arrears, out of which ID 5 trillion were accumulated in 2015 (¶11).
The Board of Supreme Audit will check the validity of these arrears by end-February 2016. So far, the program has provisions for the repayment of the already identified arrears over the next three years.
OOTW: POINT FROM EARLIER PARAGRAPH
OOTW: THEY HAVE NOT BEEN ABLE TO MAINTAIN THE EXCHANGE RATE VARIANCE BETWEEN CBI SELL VS MARKET RATE   IT’S BEEN FROM 2% (COMPLIANCE) UP TO 16%
OOTW: The Ministry of Finance and the CBI will take steps to move to a Treasury Single Account (TSA). As a first step, they will, by end-February 2016, compile a list of all bank accounts controlled by the Ministry of Finance and all spending units and sub spending units of the federal government, in CBI, state-owned and commercial banks (structural benchmark; MEFP, Table 2).
The Ministry of Finance will design and implement a commitment control system for budget execution that is based on a comprehensive financial plan for budget execution, with the support of IMF technical assistance.
The Ministry of Finance will design and implement an Integrated Financial Management Information System (IFMIS) with the assistance of the World Bank. As a first step, it will adopt, by end-April 2016, a road map detailing its core functional requirements.
OOTW: REPEAT
OOTW: “The Ministry of Finance will design and implement a commitment control system for budget execution that is based on a comprehensive financial plan for budget execution, with the support of IMF technical assistance.
The Ministry of Finance will design and implement an Integrated Financial Management Information System (IFMIS) with the assistance of the World Bank. As a first step, it will adopt, by end-April 2016, a road map detailing its core functional requirements.”
OOTW: DEFINTION — INTEGRATED FINANCIAL MANAGEMENT INFORMATION SYSTEMS
OOTW: IFMIS: WHAT IT DOES An IFMIS stores, organizes and makes access to financial information easy. It not only stores all the financial information relating to current and past years’ spending, but also stores the approved budgets for these years, details on inflows and outflows of funds, as well as complete inventories of financial assets (e.g., equipment, land and buildings) and liabilities (debt).
The scale and scope of an IFMIS can vary, from simple General Ledger System to a comprehensive system addressing Budget, Revenue, Expenditure Control, Debt, Resource Management, Human Resources, Payroll, Accounting, Financial Reporting, and Auditing processes across central government or even including local government and other public sector and quasi-governmental agencies and operations. A more comprehensive, well integrated system will:
OOTW: ƒ Provide timely, accurate, and consistent data for management and budget decision-making; ƒ Support government-wide as well as agency-level policy decisions; ƒ Integrate budget and budget execution data, allowing greater financial control and reducing opportunities for discretion in the use of public funds; ƒ Provide information for budget planning, analysis and government-wide reporting; ƒ Facilitate financial statement preparation; and ƒ Provide a complete audit trail to facilitate audits.
By recording information into an integrated system that uses common values, IFMIS users can access the system and extract the specific information they require to carry out different functions and tasks.
All manner of reports can be generated: balance sheets, sources and uses of funds, cost reports, returns on investment, aging of receivables and payables, cash flow projections, budget variances, and performance reports of all types. Some systems have libraries consisting of hundreds of standard reports.
Managers can use this information for a variety of purposes: to plan and formulate budgets; examine results against budgets and plans; manage cash balances; track the status of debts and receivables; monitor the use of fixed assets; monitor the performance of specific departments or units; and make revisions and adjustments as necessary, to name a few.
Reports can also be tailored to meet the reporting requirements set by external agencies and international institutions like the IMF. Figure 1 illustrates the complex set of functions a government IFMIS can be called on to support. These include the typical functions that make up the PFM cycle, from budget formulation to budget execution and review, to audit and evaluation of financial performance and results.
OOTW: PROBALBY TMI – BUT FOR THOSE WHO WANT TO KNOW THIS IS WHAT IS DOES, ACCORDING TO USAID
OOTW: pdf.usaid.gov/pdf_docs/Pn…    http://pdf.usaid.gov/pdf_docs/Pnadk595.pdf
OOTW: CONTINUING   OOTW: · The Ministry of Planning will implement Public Investment Management (PIM) reform with the assistance of the World Bank. By end-April 2016, it will set up a central PIM unit that will screen projects based on feasibility studies and develop and manage the Integrated Bank of Projects.
The Public Integrity Commission will continue to implement the existing asset declaration procedures for high-level officials in order to improve governance and enhance anti-corruption efforts. It will continue to publish the names of those who fail to submit their annual declaration.
OOTW: THERE HAS BEEN SEVERAL RECENT PRESS RELEASES FROM THE INTEGRITY COMMISSION PUBLICLY REQUESTING HIGH LEVEL OFFICIALS FINANCIAL DECLARATIONS
OOTW: ALSO BUTI POSTED AN ARTICLE DAY BEFORE YESTERDAY – THE INTEGRITY COMMISSION IS THIS TIME GOING TO RELEASE THE BIG WIGS NAMES WHO HAVE AVOIDED THIS AS WELL AS PARTICIPATED IN CORRUPTION
OOTW: I HAVE POSTED MANY OFFICIAL PRESS RELEASES IN OUR GOVT THREADS
OOTW: FEEL FREE TO SEARCH 😉
OOTW: D. Monitoring Financial Risks 24. The crisis is increasing the exposure of the state-owned banks, which dominate the banking sector, to sovereign risk (Table 8). The largest state-owned banks, Rasheed and Rafidain, which account for 80 percent of banking sector assets, are severely undercapitalized12 and largely illiquid following years of quasi-fiscal operations.
With some temporary credit from the CBI (¶16) and an increase in deposits in line with what has been observed so far in 2015, banks will have sufficient liquidity to finance the budget deficit in 2015–16 (Tables 6-7) and get a significant return13 that will contribute to their profitability.
However, their exposure to sovereign risk has been increasing and the quality of their credit to the economy has been deteriorating owing to the contraction in non-oil GDP (Table 8).
OOTW: THEY NEED TO PRIVATIZE THE BANKS AND THEY NEED INVESTORS TO COME INTO STABILIZE THEIR RESERVES AND BOLSTER THE PRIVATE SECTOR
OOTW: 25. The CBI and the Ministry of Finance will implement reform measures to enhance the stability of the banking sector (MEFP, ¶¶28-29). The Ministry of Finance will, by end-February 2016, appoint international auditors to audit the latest financial statements of Rasheed Bank and Rafidain Bank according to international standards (structural benchmark; MEFP, Table 2).
Based on the results of these audits, it will prepare a plan to restructure these two banks. The CBI will prepare regulatory changes to strengthen prudential standards and the implementation of bank supervision, with the support of external consultants and the IMF Middle East Technical Assistance Center.
OOTW: REMEMBER THAT THERE WAS A CBI PRESS RELEASE REQUEST ASKING BANKS TO SUBMIT THEIR FINAL ACCOUNTS TO BE CONSIDERED FOR INTERNATIONAL STANDARDS
OOTW: IN PREPARATION FOR MOVING TOWARDS INTERNATIONAL STANDARDS BY THE END OF 2016
OOTW: I MIGHT ALSO ADD THAT ALTHOUGH IT SEEMS LIKE THERE ARE SOME 50K NOTES ALREADY BEING SOLD….THE LAST ARTICLE I SAW ON THEM STATED THEY WOULD BE RELEASES IN FEBRUARY (AS WELL)
OOTW: HANG ON I NEED TO GET A LINK
OOTW: To all licensed banks (the transition from the uniform accounting system for banks and insurance companies to international standards) 01/07/2016
OOTW: www.cbi.iq/ http://www.cbi.iq/?pid=Home&lang=ar
OOTW: BTW 50K NOTES HAVE NOTHING TO DO WITH THIS
OOTW: BANKING STANDARDS (INTERNATIONAL) ARE ONE OF THE STANDARDS WHICH THEY ARE MEETING
OOTW: PROGRAM MODALITIES AND RISKS 26. The SMP will have quarterly reviews (MEFP, ¶30). It will set quarterly quantitative targets on the non-oil primary balance, the stock of net domestic assets of the CBI, official foreign exchange reserves, social spending, and the absence of new external arrears, starting in December 2015 (MEFP, Table 1), and a few structural benchmarks (MEFP, Table 2).
The targets on the stock of net domestic assets of the CBI and official foreign exchange reserves will have adjusters allowing more/less indirect monetary financing and use of reserves in case foreign financing is lower/higher than programmed, with an asymmetric cap on the additional monetary financing to protect foreign exchange reserves (Technical Memorandum of Understanding—TMU, ¶¶13–16).
The target for the non-oil primary balance for December 2015 will be adjusted when the true level of spending financed by domestic arrears in 2015 will be known (¶23; TMU, ¶12). The targets on the non-oil primary balance and the stock of net domestic assets of the CBI, the main source of domestic financing of the budget, will keep total public debt on a sustainable trajectory.
Each program review will set a few structural benchmarks in areas that are essential for the success of the program. The authorities intend to demonstrate good performance under the SMP to move to a possible Fund financing arrangement.
OOTW: 27. The SMP is subject to several risks, the materialization of which would magnify the policy challenges. An escalation of the conflict with ISIS and worsening of the security situation in the south of the country could weaken growth, public finances and the balance of payments.
A further decline in oil prices or a shortfall in projected financing or in oil production would necessitate larger indirect monetary financing and drawdown of official foreign exchange reserves. The agreement between the KRG and the Iraqi authorities (¶5) may not resume, although, under current oil prices, this would have a positive impact on the budget since the oil revenue from KRG (ID 3.4 trillion in 2016) are lower than the transfers to KRG (ID 12.3 trillion in 2016).
The authorities’ track record under the last Stand-By Arrangement under more favorable economic, political and security conditions and in the context of prior actions for the recent purchase under the RFI was weak. In light of the very difficult security situation in the territories occupied by ISIS, the tensions with the KRG over independent oil sales, and the social tensions in the rest of the country, the authorities may face difficulties in gathering the necessary political support to implement the fiscal consolidation and the reforms envisaged under the SMP. To manage these risks, staff urged the authorities to take a realistic view on the feasible composition of fiscal adjustment as well as its magnitude given their present financing constraints, and to only commit to structural reforms that
OOTW: SORRY ON PH WITH BUTI  WE’RE DISCUSSING THIS
ladyfox: THKS FOR THE NEWS
OOTW: WE ARE DISCUSSING TODAY’S IMF PRESS RELEASES
OOTW: they were confident to implement, since a good track record under this SMP will be essential to gain access to a possible Fund financing arrangement. 28. The further decline in oil prices since November may require a revision of the program on the occasion of the first review.
Since the end of the discussion of the SMP with the authorities on November 10, 2015, oil prices have declined and the IMF staff has reduced its oil price projections by 7 percent in 2016 and by 13 percent in 2017 compared to the levels projected in the SMP.
Under these lower oil prices, which are not reflected in staff’s baseline scenario, government oil revenue and exports would be reduced by ID 5 trillion in 2016 and ID 12 trillion in 2017 compared to the macroeconomic framework of the SMP. At the time of the discussion of the first review scheduled in March 2016, staff and the authorities will discuss how to adjust the macroeconomic framework and quantitative targets in light of the latest oil price outlook and its implications for the external and fiscal positions and financing.
OOTW: ISIS AND LOWER OIL PRICES ARE, ACCORDING TO THIS, IN FACT, EFFECTING REVENUES
OOTW: INTERESTING THAT THEY STILL PROJECT AN INCREASE IN GDP
OOTW: STAFF APPRAISAL 29. Iraq is facing a double shock arising from the ISIS attacks and the sharp drop in global oil prices. The ongoing armed conflict with ISIS continues to strain the country’s resources and results in new waves of internally displaced people.
The fall in oil prices has caused an acute balance of payments and fiscal crisis. 30. In spite of these shocks, the economy is still growing thanks to the increase in oil production. Real GDP is projected to grow by 1.5 percent in 2015 and 10.6 percent in 2016 owing to the continued increase in oil production.
OOTW: THIS IS VERY GOOD
OOTW: 31. The policies put in place by the authorities to deal with these shocks are broadly appropriate. In the fiscal area, the authorities are addressing the fall in revenues, which will reverse over the medium term as oil production expands and the insurgency diminishes, with a mix of fiscal adjustment, unfortunately mostly capital expenditure retrenchment, and financing. In the external area, the authorities are appropriately maintaining the peg with the U.S. dollar, which provides a key anchor to the economy.
International reserves are at an adequate level and can absorb the projected decline in oil export revenues if the fiscal adjustment under the SMP takes place, oil prices recover somewhat in the medium term, and oil production continues to increase.
OOTW: (ABOVE) MORE GOOD NEWS
OOTW: NOW FOR THE OPPOSITE
OOTW: 32. But, risks are very high. The main risks derive from further oil market shocks, the extension of the conflict with ISIS, political tensions, and poor policy implementation. To mitigate these risks, the authorities have designed as light a fiscal adjustment as possible under their present financing constraints and structural measures that they are confident they can implement in the short run under the SMP.
Staff recommends implementing these policies and measures rigorously in order to demonstrate good performance, which will be needed to move to a possible Fund financing arrangement.
OOTW: 33. The size of the fiscal adjustment envisaged in 2015-16 is appropriate to address the pressure from lower oil revenue and higher humanitarian and security spending but the composition of expenditure needs to be improved over time.
The fiscal adjustment in reaction to the fall in oil prices is bringing the non-oil primary balance closer to the level that would sustain a constant level of public spending once the oil resources will have been exhausted.
But the composition of the fiscal adjustment is far from ideal, as much of the adjustment is coming from capital spending rather than current items. In the medium term, the authorities need to reduce current expenditure, including the oversized payroll, in order to make room for larger investment expenditure that is conducive to non-oil growth. Oil investment needs to be protected as it is essential to generate the oil revenue to finance most of the public spending.
Wheresmyrv?: OOTW so is this saying earlier that banks wont be up too international standards until the end of this year?
OOTW: IT DID NOT SAY THAT IT STATED THAT THE IMF IS HOPING THAT IRAQ CAN DEAL WITH CORRUPTION, IMPLEMENT THE AML, ADDRESS ISIS, PRIVATIZE THE STATE OWNED BANKS – AND LAUNCH OTHER FORMS OF REVENUE IN 2016
OOTW: MANY OF THESE COME UNDER IMF OVERSIGHTS AND THE IMF STATES THEY HOPE TO SEE THESE IN PLACE BY APRIL   OOTW: OR LAUNCHED BY APRIL
OOTW: I WOULD REMIND YOU THAT LAST I READ IRAQ HAS A WTO MEETING IN SPRING OF THIS YEAR
OOTW: I WOULD GO SO FAR AS TO SAY THAT WHATEVER INFORMATION IS SHARED WITH THE WTO, WILL ALSO BE ACCESSIBLE/SHARED WITH AFFILIATED ORGS  OOTW: SUCH AS THE IMF AND WB
Wheresmyrv?: Ok thanks for breaking this down for all of us  🙂
OOTW: CONTINUING ON
OOTW: I’M-A’TRYIN’   OOTW: LOL
OOTW: 34. Some indirect central bank financing of the government is necessary at this juncture. As other sources of financing are not immediately available, indirect recourse to central bank borrowing, subject to well-defined limit, is unavoidable. The accumulation of domestic arrears to finance the 2015 budget was unfortunate and the authorities’ commitment to prevent a recurrence is welcome.
OOTW: “INDIRECT FINANCING” SO NOT A FORMAL LOAN FROM THE CBI BACK TO THE GOI
OOTW: OK..LOL
OOTW: 35. PFM needs to be overhauled in order to improve the quality of spending and the authorities’ control over budget execution. To that end, it is crucial that the authorities take steps to implement a sound PFM law, commitment control, a Treasury Singe Account, an Integrated Financial Management Information System, Public Investment Management reforms, and asset declaration for high officials.
OOTW: PFM = PUBLIC FINANCIAL MANAGEMENT
OOTW: AGAIN, THE INTEGRITY COMMISSION IS GOING TO FORCE THESE CORRUPT OFFICIALS TO DISCLOSE THEIR ACCOUNTS AND SPENDINGS
OOTW: 36. Banking supervision needs to be strengthened in order to monitor and contain the damage inflicted by the crisis on the banking system. The audits of the financial statements of the two state-owned banks Rasheed and Rafidain according to international standards are indispensable first steps
OOTW: AGAIN THE CBI HAS ISSUED A STATEMENT THAT THEY INTEND TO PRIVATIZE THE RASHEED AND RAFIDAIN BANKS
OOTW: 37. Steps to remove exchange restrictions and implement anti-money laundering and combating the financing of terrorism (AML/CFT) measures are welcome. This will improve the integration of the domestic financial system into the global economy.
OOTW: 37 IS HUGE
OOTW: “ARE WELCOME” TOO FUNNY
OOTW: IN OTHER WORDS…GET YOUR S**T TOGETHER – YOU HAVE TO PUT ON YOUR BIG BOY PANTS AND GET THIS DONE YOURSELVES
OOTW: MOHSEN HAS GOT TO GO    OOTW: MY MANTRA   LOL
OOTW: ALTHOUGH I WILL SAY ON PAPER HE PERFORMS LIP SERVICE QUITE WELL
OOTW: IF YOU LOOK AT THE CBI ANNOUNCEMENTS THEY SHOW HE’S TRYING TO FALL IN LINE
OOTW: BUT SALEH AND HAFEZ CALLED HIM OUT ON ALLOWING CORRUPTION STILL
OOTW: 38. Staff believes the policies laid out in the MEFP are adequate to deal with the present and urgent balance of payments and budget needs triggered by the ISIS attacks and the collapse in oil prices.
OOTW: MEFP = Memorandum of Economic and Financial Policies
OOTW: SCROLLING THROUGH MANY CHARTS
OOTW: THE LINK TO THIS IMF PDF IS POSTED IN THE FORUM NOW
OOTW: Exchange Arrangement Iraq’s de jure and de facto exchange rate arrangements have been retroactively reclassified to a conventional peg arrangement, effective January 15, 2012. The Central Bank Law provides the Board of the CBI with power to formulate exchange rate policy, and the Board has maintained its policy to keep the official exchange rate at 1,166 per U.S. dollar since January 15, 2012.
The CBI stands ready to provide foreign exchange at the official exchange rate plus commissions for permissible transactions through its daily auctions (allocations), establishing a peg. However, because certain transactions are excluded from the access to the CBI auctions, many transactions take place at parallel market exchange rates. The CBI publishes the daily volume of the auction allocation on its website.
OOTW: Iraq continues to avail itself of the transitional arrangements under Article XIV, Section 2 but no longer maintains any exchange restrictions or multiple currency practices subject to Article XIV, Section 2, and currently maintains three exchange restrictions and one multiple currency practice (MCP) subject to Fund approval under Article VIII, Sections 2(a) and 3.
OOTW: LET ME SEE IF I CAN FIND THESE REFERENCE DEFINITIONS
OOTW: THIS IS IMPORTANT
OOTW: HERE IS THE REST OF THIS SECTION FIRST
OOTW: The exchange restrictions arise from
(i) the requirement to pay all obligations and debts to the government before proceeds of investments of investors, and salaries and other compensation of non-Iraqi employees may be transferred out of Iraq;
(ii) an Iraqi balance owed to Jordan under an inoperative bilateral payments agreement; and
(iii) weekly limits on purchases of cash by financial institutions from the CBI.
These limits are currently $300,000 per week for banks with capital of at least ID 250 billion, $150,000 per week for MTCs, and $50,000 per week for MEBs.
OOTW: THIS IS WHAT I’VE FOUND ON GOOGLE ITS STILL VAGUE
OOTW: Article VIII, Section 3 also prohibits members from engaging in discriminatory currency arrangements subject to some qualifications. The Fund has not defined “discriminatory currency arrangements” in detail.
The concepts of exchange restrictions and multiple currency practices have been sufficiently broad to cover the issues that have arisen under the provisions of Article VIII, Sections 2(a) and 3. 5 See “Article VIII and Article XIV,” Decision No. 1034-(60/27), adopted June 1, 1960
OOTW: HANG ON I’M TRYING TO GET THAT
OOTW: HERE IS A LINK TO AN IMF PDF EXPLAINING MULTIPLE CURRENCY PRACTICES AND THE IMFS ABILITIES AND RESTRICTIONS RE THESE
OOTW: www.imf.org/external/np/p…https://www.imf.org/external/np/pp/eng/2006/052606.pdf
OOTW: BUTI AND I ARE DISCUSSING THIS BRB
OOTW: AS WELL AS RESPECTIVE COUNTRIES ALLOWANCES ETC
Butifldrm: Good Evening everyone
OOTW: HERES AN ADDITION TO THIS STATEMENT RE EXCHANGE RESTRICTIONS FROM THIS IMF PRESS RELEASE
OOTW: The MCP arises from the official action to limit the purchase of foreign exchange, with no mechanism to ensure that exchange rates in the official auction and in the market do not deviate from each other by more than two percent.
The average spread between the official and market rates was around 2.4 percentage points in November 2015. In addition, one exchange restriction maintained for security reasons should be notified to the IMF under the framework of Decision 144–(52/51).
Butifldrm: One of the IMF mandates is the the government and the CBI need to liberalize the exchange rate
Butifldrm: under these guidelines when the government or the CBI limit the availability of the dollar or foreign currency exchange the market rate will exceed the 2% IMF guidelines fro Multi Currency practice
Butifldrm: the importance of these guidelines is that for foreign investors who want to budget investments into Iraq have to be able to rely on the exchange rates
Butifldrm: when the exchange rates fluctuate as they did today, this can be a problem
Butifldrm: anyway, the government cannot put exchange rate restrictions for foreign currency
Butifldrm: transactions
OOTW: *foreign currency transactions
Butifldrm: In passing the 2015 budget the CBI was limited to 75 M Cap per day exchange restriction , thus the spread when wild
Butifldrm: this is a hue NO NO    for the IMF
Butifldrm: the reason for the limitation by the government of Iraq was to limit the corruption
Butifldrm: the outcome was multi currency practice a spread of foreign exchange larger than @% 2%
OOTW: REPEATING THE ABOVE
OOTW: OOTW: Exchange Arrangement Iraq’s de jure and de facto exchange rate arrangements have been retroactively reclassified to a conventional peg arrangement, effective January 15, 2012. The Central Bank Law provides the Board of the CBI with power to formulate exchange rate policy, and the Board has maintained its policy to keep the official exchange rate at 1,166 per U.S. dollar since January 15, 2012.
The CBI stands ready to provide foreign exchange at the official exchange rate plus commissions for permissible transactions through its daily auctions (allocations), establishing a peg.
However, because certain transactions are excluded from the access to the CBI auctions, many transactions take place at parallel market exchange rates. The CBI publishes the daily volume of the auction allocation on its website.
OOTW: SO WHAT DOES THIS MEAN FOR US, PUT IN SIMPLISTIC TERMS, BUTI? PLEASE?
OOTW: WAIT FIRST HERE’S MORE
OOTW: OOTW: Iraq continues to avail itself of the transitional arrangements under Article XIV, Section 2 but no longer maintains any exchange restrictions or multiple currency practices subject to Article XIV, Section 2, and currently maintains three exchange restrictions and one multiple currency practice (MCP) subject to Fund approval under Article VIII, Sections 2(a) and 3.
OOTW: Article VIII, Section 3 also prohibits members from engaging in discriminatory currency arrangements subject to some qualifications. The Fund has not defined “discriminatory currency arrangements” in detail.
Butifldrm: Evidently, from what this report concludes to, Iraq still maintains three exchange rate restrictions and one multiple currency practice subject to fund approval under article VIII. We can see these restrictions and practices in the spread which is over 2%. We can see this from what the Market rate was as of today wealthwatch.world/showthr…
http://wealthwatch.world/showthread.php?tid=3715
Butifldrm: The market rate needs to be between 1213 and 1214 to be in compliance
OOTW: BUTI HAS A FAM EMERGENCY SHE HAD TO GO
OOTW: ANYWAY – AS WE KNOW…THEY’RE NOT MAINTAINING COMPLIANCE AND CORRUPTION STILL THRIVES THROUGH THE AUCTIONS
OOTW: I’M VERY HAPPY THE IMF HAS PUT OUT A FORMAL ANNOUNCEMENT CALLING OUT THAT IRAQ IS CONTROLLING THEIR OWN DESTINY RE ART VIII AS WE’VE DISCUSSED HERE BEFORE
OOTW: NOW LET’S WAIT AND SEE IF SALEH AND ABADI CAN GET THE CBI TO ADHERE TO IMF GUIDELINES
OOTW: THIS IS WHAT THEY STATE THEY INTEND TO DO – MORE RATHER, SALEH, ABADI’S RIGHT HAND ECONOMIC ADVISOR
OOTW: AGAIN, I DEEPLY BELIEVE WE’RE GOING TO SEE SOMETHING DONE (RELATIVELY DRASTIC) WITHIN THE REGIME AT THE CBI IN ORDER TO GET THESE REQUIREMENTS INSTALLED
OOTW: MOST HERE KNOW I AM PRAGMATIC AND I DO NOT ALLOW MYSELF TO FALL PREY TO RV FEVER
OOTW: THIS REPORT FROM THE IMF TODAY ARE CLEAR OUTLINES OF ACCOMPLISHMENTS BY THE GOI, THE CBI, THEIR PITFALLS AND WHAT THEY NEED TO DO IN ORDER TO REPAIR MONETARY PRACTICES AND THEIR ECONOMY
OOTW: MANY OF THE POINTS MADE IN THE IMF REPORT ARE THE EXACT SAME CONDITIONS WITHIN IRAQ WHICH WE DISCUSS HERE DAILY
OOTW: I DO FIND IT ODD THAT THE REPORT STATES THEY ACCEPTED ART 8 IN BOTH 2008 AND 2012
OOTW: OBVIOUSLY THERE WERE INTERFERING FACTORS WHICH PREVENTED IRAQ FROM REALIZING THIS ACCEPTANCE
OOTW: AHEM..MALIKI IN OTHER WORDS   OOTW: AND DAWA   AND (TOO) KEYWORDS
OOTW: MANY FORMER IMF REPORTS LIST GOVERNMENT INTERFERENCE AS THE REASON WHY MONETARY REFORM HAS NOT OCCURRED IN IRAQ
OOTW: SO AGAIN, THIS REPORT SHEDS LIGHT ON THE STATUS, AND THE NEEDS – WE CONTINUE TO BE PATIENT TO AWAIT IRAQ INSTITUTING THE IMF RECOMMENDATIONS
OOTW: I DO BELIEVE THEY WILL  OOTW: EVEN WITH ISIS AND LOWER OIL PRICES
OOTW: REMEMBER THE REPORT STATED THAT THEIR GDP IS EXPECTED TO HAVE A NOTICEABLE RISE
OOTW: AND THAT ARE TO BEGIN PRIVATIZING THE STATE OWNED BANKS VERY SOON
OOTW: AND TODAY’S EARLIER CHAT ADDRESSED ANNOUNCEMENTS FROM THE GOI (DEPTS) RE THE LAUNCH OF THE PRIVATE SECTOR
OOTW: WE’RE GETTING THERE  OOTW: I HAVE TO GO NOW…ANY QUESTIONS?
SWSD: Got here late, but did you address the article stating IMF says they will keep the fixed rate the rest of the year?  SWSD: A friend told me about it, I do not have the article
OOTW: NO BECAUSE THAT’S NOT IN THIS OFFICIAL IMF PRESS RELEASE
SWSD: what was it exactly
OOTW: HERE IS THE LINK TO THE CHAT WHICH BREAKS DOWN THE ENTIRE PRESS RELEASE
OOTW: wealthwatch.world/showthr…http://wealthwatch.world/showthread.php?tid=3730
SWSD: the press release regarding what I asked?
OOTW: IMF REPORT ON IRAQS ECONOMIC AND MONETARY STATUS
SWSD: was what my friend told me just bs then?
SWSD: I do not understand a lick of what the article says. So Im just reading your comments on it…
OOTW: THIS IS NOT FROM AN ARTICLE HON THIS IS A PRESS RELEASE FROM THE IMF  A FULL REPORT
SWSD: Does it concern what my freind said the IMF stated about keeping them at a fixed rate the rest of the year?
OOTW: I BELIEVE I REPLIED TO THAT SAME QUESTION ABOVE
OOTW: NO THIS REPORT DOES NOT STATE THAT
SWSD: oh okay, that is what i was concerned about…if true
OOTW: WE WILL AWAIT MORE NEWS
SWSD: k
OOTW: AND SEE WHAT/IF ZEBARI REPLIES TO THIS
OOTW: CAN CURRENT CONDITIONS SUPPORT INVESTORS COMING INTO IRAQ? WITH MAHMOUD STILL HEAD OF THE JUDICIARY..SYRIAN BORDER UNABLE TO BE USED FOR SHIPMENT, MAHMOUD STILL PROTECTING THE CORRUPT…SO MUCH OF THE SAME SPIRITUAL ILLNESSES
OOTW: STILL GOING ON FED COURT ACT UP FOR ANOTHER READING  REPORTEDLY NEXT WEEK
Wheresmyrv?: OOTW is the budget still slated to go into the gazette soon?
OOTW: WELL YES, WITHIN THE NEXT MONTH I’D SAY
Wheresmyrv?: Awesome
OOTW: HERE IS THE LINK TO THIS IMF PRESS RELEASE AND CHAT
OOTW: wealthwatch.world/showthr… http://wealthwatch.world/showthread.php?tid=3730
time2rv: International Monetary Fund Iraq: Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding The following item is a Letter of Intent and a Memorandum of Economic Policies of the government of Iraq.
It is being made available on the IMF website by agreement with the member as a service to users of the IMF website. This memorandum describes the policies that Iraq is implementing in the framework of a staff-monitored program.
A members’s staff-monitored program is an informal and flexible instrument for dialogue between the IMF staff and a member on its economic policies. A staff-monitored program is not supported by the use of the Fund’s financial resources; nor is it subject to the endorsement of the Executive Board of the IMF.
International Monetary Fund Iraq and the IMF Press Release: IMF Managing Director Approves a StaffMonitored Program for Iraq January 12, 2016 Country’s Policy Intentions Documents E-Mail Notification Subscribe or Modify your subscription Iraq: Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding December 22, 2015
The following item is a Letter of Intent and a Memorandum of Economic Policies of the government of Iraq. It is being made available on the IMF website by agreement with the member as a service to users of the IMF website. This memorandum describes the policies that Iraq is implementing in the framework of a staff-monitored program.
A members’s staff-monitored program is an informal and flexible instrument for dialogue between the IMF staff and a member on its economic policies. A staff-monitored program is not supported by the use of the Fund’s financial resources; nor is it subject to the endorsement of the Executive Board of the IMF.
IRAQ INTERNATIONAL MONETARY FUND 1 Letter of Intent Baghdad, December 22, 2015 Ms. Christine Lagarde Managing Director International Monetary Fund 700 19th Street, N.W. Washington, DC 20431, USA Dear Ms. Lagarde, 1. The attacks by the so-called
OOTW: www.wealthwatch.world/sho… PLEASE FIND THE LETTER OF INTENT AT LINK http://www.wealthwatch.world/showthread.php?tid=3730
Butifldrm: ‹@time2rv› Thank God Iraq has submitted a letter of intent
Butifldrm: Hi woods I’m back
OOTW: HI BABE
Butifldrm: I believe this was the last LOI
Butifldrm: March 03, 2011 — Iraq — Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding, March 03, 2011 PDF File Size: 586Kb
Butifldrm: www.imf.org/external/np/l…http://www.imf.org/external/np/loi/2011/irq/030311.pdf
Butifldrm: Iraq is finally playing the IMF game
*SCZIN11: HI BEAUTIFUL :blink:
OOTW: INDEED IT SEEMS SO, BUT THIS PRESS RELEASE ALSO STATES THEY DID IN 2008 AND 2012 – HMMM…GUESSING THEY COULDN’T STICK WITH THE REFORMS …HMMM..WONDER WHY? LOL
Butifldrm: As long as the Fiat currency system survives, Iraq has a chance
Butifldrm: ‹@*SCZIN11› Hi Sczin
Butifldrm: ‹@OOTW› you can go back and look at the IMF press releases www.imf.org/external/coun…
http://www.imf.org/external/country/irq/index.htm?pn=3
OOTW: SURE – UHHHH THERE’S A LOT OF THEM…WHAT DO YOU WANT ME TO FIND?
Butifldrm: the letter of Intent
OOTW: OKAY SORRY I CATCH ON EVENTUALLY
Butifldrm: this is the first since 2011
OOTW: THERE ARE SEVERAL GOING BACK TO 2007
OOTW: THIS IS FROM 2011   OOTW: www.imf.org/external/np/l…
http://www.imf.org/external/np/loi/2011/irq/030311.pdf
OOTW: March 3, 2011 The following item is a Letter of Intent of the government of Iraq, which describes the policies that Iraq intends to implement in the context of its request for financial support from the IMF. The document, which is the property of Iraq, is being made available on the IMF website by agreement with the member as a service to users of the IMF website.
Butifldrm: ok lets talk
Butifldrm: history   Butifldrm: who was in charge of the CBI in @)!!
OOTW: THIS LOI IS SUPER LONG   OOTW: SHABS
Butifldrm: oh 2011   lol   Butifldrm: yes
OOTW: DID YOU WANT A DIFF YEAR?
Butifldrm: no since shabs Iraq has not complies to IMF guidelines
OOTW: OK  OOTW: WELL APPARENTLY THEY DIDN’T IN 2008 EITHER
Butifldrm: the point is since 2011 there has been no LOI from Iraq
Butifldrm: I believe Shabibi was removed in 2012
Butifldrm: now since Maliki is out of power, Abadi in charge and Iraq need 1.2B dollars, they are willing to comply with IMF guidelines
Butifldrm: I find it interesting, that Iraq has a credit rating of B-, yet the World Bank is willing to loan them the money to reconstruct the freed areas from ISIS
OOTW: WELL THAT REPORT STATES THAT IN SPITE OF THEIR CREDIT RATING THEY STILL HAVE THE POTENTIAL TO SELL BONDS  OOTW: ONLY THEY/ZEBARI CHOSE NOT TO LAUNCH THEM
Butifldrm: IMO the truth is now Iraq is complying with the IMF guidelines and the WB feels secure in loaning the money
OOTW: AND IT FIND IT ODD THAT THEY WERE TO BE SOLD IN EUROBONDS – EVEN WITH THE VOLATILITY REPORTED RE THE   EURO
OOTW: SO WHAT IS IT ABOUT THE COMPLIANCE THAT MAKES THE IMF FEEL SECURE?
Butifldrm: They are not loaning money to African nations in such or worse demise
Butifldrm: Iraq is finnaly reporting the required documentation they require
Butifldrm: Oh yes the Bonds
Butifldrm: It is interesting the article that came out about the sale of sovereign bonds
Butifldrm: I need to look back , but as I remember, they were to be denominated in USD
OOTW: YES
OOTW: THE CONCERN AT THE TIME WAS THAT WE WANTED TO SEE THEM SOLD IN DINAR – AND FOR THEM TO RELEASE THE PEG TO THE DOLLAR
OOTW: AND THIS REPORT STATES THEY’RE MAINTAINING THEIR PEG
OOTW: SO HOW CAN THEY STOP THE AUCTION CORRUPTION WHILE MAINTAINING THE PEG TO THE USD?
OOTW: THIS IS A QUESTION I, AND OTHER ECONOMIC LAYMEN ASK
Butifldrm: Ok Iraq would have to move totally into article VIII and not under the protection of article XIV TO BE ABLE to sell bonds denominated in the IQD
OOTW: THIS REPORT SAYS THEY ARE IN CONTROL OF THEIR MONETARY POLICY NOW
Butifldrm: any international transactions as of the present have to be done by Iraq in an internationally traded currency
*SCZIN11: ‹@Butifldrm› MAYBE THATS WHY THEY HAVE NOT SOLD BONDS, THUS FAR
Butifldrm: of course they are, guided by the IMF  lol
OOTW: THE IMF SITE STILL LISTS THEM AS UNDER ART XIV  OOTW: www.imf.org/external/np/f…
http://www.imf.org/external/np/fin/tad/exfin2.aspx?memberKey1=460&date1key=2016-01-13
Butifldrm: ‹@*SCZIN11› well true , but the articles state the investors want such a high interest rate that Iraq cannot afford or does not want to pay
Butifldrm: this is what happened to Greece
Butifldrm: ‹@OOTW› yes true
OOTW: HERE IS THIS FROM TODAYS IMF PRESS RELEASE
OOTW: OOTW: 20. The government will gradually remove remaining exchange restrictions and multiple currency practice (MCP) with a view to eliminating exchange rate distortions (MEFP, ¶19).
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 investment community that Iraq is committed to maintain an exchange system that is free of restrictions and MCP for current international transactions and thus facilitate creation of a favorable business climate.
As a first step, the government will, by end-February 2016, amend the Investment Law, or issue clarifying implementing regulations, to remove the limitation on transfer of investment proceeds that gives rise to an exchange restriction, as recommended by a recent technical assistance mission of the IMF.
Butifldrm: they do not have an internationally traded currency
Butifldrm: ‹@OOTW› that is a great move
OOTW: SO AGAIN, THEY MUST RE AMEND THE INVESTMENT LAW AS WE POSTED THE OTHER DAY
Butifldrm: can they pull it off is the huge question
OOTW: TRUE THIS IS STILL PROGRESS
Butifldrm: they would have to remove the corruption aspect of currency trading
Butifldrm: yes, it’s a grand goal
OOTW: YES CONSIDERING THEY’RE STILL PEGGED TO THE DOLLAR  OOTW: LOL
*SCZIN11: AND UNTIL MAHMOUD IS GONE, AND CORRUPTION CAN BE DEALT WITH, AND THE SYRIAN BORDER OPENED FOR TARIFFS IMPLEMENTATION OUT OF ISIS CONTROL, IN OTHER WORDS FED CT LAW AND BANKING DEPOSIT LAW… INS LAW
OOTW: I MEAN THE MARKET WAS 1241 TODAY – WTH WOULD YOU STILL BUY DOLLARS AND PAY THE SPREAD BETWEEN 1182 AND 1241 – WHY NOT JUST USE DINAR?
Butifldrm: HEE, HEE for sure
Butifldrm: Right now Iraq has no option
OOTW: BECAUSE…..   OOTW: ?
Butifldrm: ‹@*SCZIN11› absolutely their are so many layers to Iraq’s situation
Butifldrm: Iraq has no option, because they are 90% dependent economically on oil, they chose the petro dollar as their peg and they have not complied with IMF guidelines since inception, not complied with any of the guidlines set by the PTB they are caught in a trap
OOTW: SO THAT BEGS THE QUESTION – WITH THE IMF INVOLVED, DOES THIS MEAN THEY MAY DEPEG?
OOTW: BECAUSE IF THEY DON’T, IF THE CURRENT CIRCUMSTANCES CONTINUE..I DO NOT SEE HOW THEY’RE GOING TO STOP THESE AUCTIONS WITH THE “NEED” FOR THE DOLLAR
OOTW: ESP WITH MOHSEN AT THE HELM OF THE CBI
*SCZIN11: THEY MUST INSTITUTE THEIR OWN UNIQUE CURRENCY….THE NEW RAQI DINAR
OOTW: UNLESS SALEH REALLY DOES INTEND TO PUSH CBI REFORM
Butifldrm: Well from todays release the IMF is happy with the PEG
OOTW: YEP
OOTW: AND REMEMBER THAT ARTICLES STATED THAT THE 50K NOTES ARE COMING OUT IN FEBRUARY AS WELL – HERE’S THIS QUOTE AGAIN FROM THE IMF REPORT ABOVE :
“As a first step, the government will, by end-February 2016, amend the Investment Law, or issue clarifying implementing regulations, to remove the limitation on transfer of investment proceeds that gives rise to an exchange restriction, as recommended by a recent technical assistance mission of the IMF.”
Butifldrm: WE all need to understand things will change in the future once ISIS, corruption, oil is no longer a factor
OOTW: THE IMF IS SUCKING ON THE ** OF THE US – SO THERE YOU GO..LOL
Butifldrm: IMO the I
Butifldrm: World Bank Giving Iraq the loan to rebuild the ISIS recovered areas is a huge deal
OOTW: I’D THINK THEY’D HAVE TO BE SURE THAT RAMADI AND SURROUNDING RAMADI ARE GOING TO BE PROACTIVELY ADDRESSED NOW  OOTW: THEN THERE’S MOSUL  AND SEVERAL CITIES SURROUNDING MOSUL
Butifldrm: The world knows Iraq has the resources to pay back the investment
OOTW: TRUE
Butifldrm: Iraq’s GDP to debt is nothing compared to the US