The Dinar Daily, Sunday November 23, 2014
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  1. #1

    The Dinar Daily, Sunday November 23, 2014





    The Exchange Rate of Foreign Currency in Economic Feasibility Studies

    Below are the central controls related to the exchange rate of the foreign currency to convert the project inputs and outputs from foreign currency to its equivalent in the local currency, and that is by calculating the net discounted present value standard and the internal return on investments in economic analysis that governs investment projects that costs excess one million dinars.

    Estimate the shadow price of foreign currency:

    1. It is necessary to put central controls to amend the official exchange rate * to reflect the shadow price of the foreign currency, and that is considered one of the necessary requirements to implement the net discounted present value standard and the internal return rate on investment in the economic calculation stated in the instructions, paragraph nine.

    The central controls for adjusting market prices distinguished a group of outputs and inputs traded internationally, where the projects production or usage of them is reflected on the abundance of foreign currency in the economy and thus project outputs or inputs used of such are considered purely foreign currency outputs or inputs.

    * What is meant by exchange rate: the number of units of foreign currency, expressed in dollar per one dinar.In particular the following outputs and inputs of foreign currency were distinguished:


    • Export-outputs.
    • Outputs marketed locally that substitute imports.
    • Imported inputs.
    • Inputs produced locally that usually go to exports.
    • Foreign labor.


    According to the pricing rules the value of the output and input (traded) is calculated using export prices (FOB) and import prices (CIF), according to what is listed in the pricing rules.

    In other words the pricing rules calculate what the project produces from foreign currency (quantity of exports multiplied by the export price (FOB) in foreign currency or the quantity of substitute imports multiplied by the import price (CIF) in foreign currency, as well as what the project uses from foreign currency and imported inputs multiplied by the import price (CIF) in foreign currency …. etc.).

    In a later step, project outputs and inputs must be converted from the foreign currency to its equivalent in local currency (dinars) by using a specific exchange rate for the foreign currency.

    2. Justifications for exchange-rate adjustment: there are a number of important and powerful arguments which support the view that the official exchange rate reduces the real value of foreign currency for purposes of calculating the economic national profitability for investment projects and hence for the purposes of investment planning. It is demonstrated in this context to call for assessing the dinar for less than (3.208) dollar (official exchange rate) when assessing project outputs and inputs of traded goods of exports, substitute imports and imports… etc.

    The justifications to call for the use of an exchange rate that is lower than the official exchange rate are:


    • The use of an exchange rate that is lower than the official rate is the appropriate action at the investment planning level to translate the country’s economic strategy aiming at stimulating central investments in the sectors that encourage the development of non-oil exports, as well as sectors that encourage the expansion of domestic production base in order to reduce imports and compensate it with local commodities. This helps to reduce reliance on foreign exchange earnings from crude oil exports and increases the share of non-oil sectors in the local production.
    • The application of the amended exchange rate on project imported inputs will assist in directing investments away from aggregated sectors dependent on imported inputs and the preference of those sectors that rely on locally produced inputs.
    • The use of the amended exchange rate helps to correct the balance in favor of the traded goods sectors compared to non-traded goods.
    • The real exchange rate has declined rapidly since the early seventies, through rapid rise of the level of prices and local costs which led by the steadiness of the official exchange rate to change in prices and actual local rate costs that gave an advantage for imported goods at the expense of locally produced goods, meaning that it led to deterioration of the competitiveness of alternative replacement goods and export commodities.
    • This action shows that the official exchange rate overestimates the value of the dinar, compared to the foreign currency and from the promoting goods substituting imports and export commodities point of view of.


    And in support to this view is the state’s utilization and in a broad approach to the customs and quantitative protection policies especially for consumer goods, as well as export subsidies that exports have through an amended export exchange rate.

    3. Estimate the amended exchange rate of the Iraqi dinar to be used in technical and economical feasibility studies and for (1.134) dollar per dinar. This price should be approved for 3 years until re-appreciation by the competent authorities.



    The Republic of Iraq – Ministry of Planning

    and

    A "flashback recap" of a Live Q and A Call from about a year ago - on THE DAILY DINAR NEWS BLOG...

    In general terms – there were three main focal points of interest I wanted to cover and then allow listeners to ask whatever questions they liked.

    1) the SIGR report…


    2) the Gold Article…


    3) the IIER report…


    I started the conversation out last night by highlighting how crazy this campaign being fielded to contact our lawmakers and bank CEO’s and tell them how unfair it is they are getting to exchange (exchange is the right terminology BTW – NOT “CASH-IN”) at 32.00 per Dinar and we are not – is. It is nuts.


    Firstly, “they” are NOT being allowed to exchange “early” – or at 32.00 per Dinar. It makes you sound “stark raving MAD” to be caught saying such things. You would be better off barking at the moon. It is demeaning to the validity of a true currency play.


    Secondly, this is entirely the wrong way to approach them. I pointed out on the call that Poppy and I fielded a very successful such campaign a couple of years ago. However, we sat down and came up with a much different approach. It was designed to get answers and to approach our lawmakers with respect and as their constituents. Not like a bunch of lunatics. We had extraordinary participation (because it made sense) and we received a good response from lawmakers. It started the conversation in a reasonable manner.


    I asked one caller – “when was the last time you asked a banker for money and told him how unfair it was if he didn’t give it to you”??? Obviously – we chuckled…


    Another caller asked me if (as DC had relayed) – the “zero’s were raised” and the lower denominations were in circulation??


    I said plainly “no”…lower denominations being in circulation would (at the very least) imply there had been a value change. If there were no value change the lower denoms would not only be of little value, they would be such a hinderance – people might even throw them away just to get rid of them. So no – no lower denoms. I told the caller to check the
    CBI.iq website for “real” info on rate change.

    The “zero’s being raised” or “deleted” – as explained by any reasonable researcher, economist or authority – is simply the process removing the large (3 zero notes) from circulation.


    Referring to an Enorrste post from today on
    THE DINAR OBSERVER DAILY(you may want to put this on your favorites and check in several times a day – we to it often )

    “…I have never found a single article from the CBI or the IMF that equates “delete the zeros” to the idea of “move the decimal point.” Instead, the statements overwhelmingly come out to mean “remove the large notes from circulation.”


    Also – this recent internal memo put out by Wells Fargo is likely “push back” from this recent campaign. I pointed out that Pinnacle Bank published an article by an “affiliate” in their internal publication and then “highlighted it” in a similar internal memo a couple of years ago. It is just a defense mechanism. I’m sure Wells is tired of having their name dragged through the “internet rumor mill”. This is highly likely the reason for their vigorous denials about handling it in the future. They get so many useless calls – it isn’t worth the headache. Can you blame them??


    Further, for any bank, lawmaker, adviser or official to state the “Dinar is a scam” is nearly as foolish as some of the internet “Gurus”. It is the official currency of a COUNTRY. I pointed out (below) the post from yesterday’s
    DINAR OBSERVER DAILY
    – highlights page 94 of the quarterly SIGR report to THE US CONGRESS in April of 2012…
    __________________________________________________ _____________

    THIS REPORT WAS SENT TO CONGRESS LAST MAY. IT PLAINLY SHOWS IN THIS REPORT THEY EXPECTED THE DINAR TO REVALUE AT AROUND A DOLLAR IN 2013.

    We are seeing and hearing that the inflation rate is still climbing and they are pushing to get us our money?? This report is from page 94 of the massive SIGR report.





    BGG ~
    This is a screen shot from the “Special Inspector General for Iraq Reconstruction” – Apr 2012, quarterly report to Congress. For members of our Government to say they have no idea what is going on here – means they haven’t read some very basic documents presented them.
    __________________________________________________ ______________

    I pointed out (last night) this is a highly speculative investment. We are, in no way, guaranteed anything. However, this SIGR report gives us some valuable insights…

    1) This is information given to the US CONGRESS on a quarterly basis… I find it hard to believe such an information source would intentionally mislead Congress. They tend to frown on such behavior. Which goes directly to the validity of this adventure – against all advice from Wells Fargo or other such naysayers.

    2) It points out there having been a legitimate “plan” – or time frame in motion…having been projected to be done in 2013. We are obviously in “over time” now.

    3) It gives us an idea as to who is in charge…the CoM – or Council of Ministers. Who do they answer to?? Maliki. Period. When is he likely to push this forward?? Historically – he has been a “weak Dinar” policy advocate. However, rumor from his own inner circle admits he can’t win a third term in office without some currency reform.

    I fully expect him to use every tool in his “wheel house” to win – his recent moves in Anbar and the disputed territories prove as much. Currency reform has to be a “biggie”. Though this WAS their thinking a couple of months ago – there is no promise it is still part of their political calculus. We shall see.

    4) Though no guarantee of the actual future plan they wind up engaging – this report points out an increase in value that would have taken the Dinar from “one-tenth of a cent” to a value “of slightly less than $1″..

    __________________________________________________ ______________

    AND

    Coins put on the market !!



    Nora Albjara member of the committee of economy and investment in the House of Representatives revealed that the central bank completed its preparations for the issuance of metal coins of seven small groups, in conjunction with the implementation of the project to delete the three zeroes from the paper currency is currently in circulation.

    She said in her statement Albjara "The project will take between four and five years, and which will be the launch of the categories of small coins gradually."

    He predicted the financial expert Hilal Taan inflation rate declines, with the issuance of metal coins of small denominations in the daily financial transactions, remarkable that 3% of the value of inflation in Iraq due to the presence of large cash block.

    The economic expert on behalf of Jamil Anton, noted that he may not find metal coins accepted by a lot of Iraqis, especially young people, due to the existence of an entire generation of Iraqis had not trading coins due to stop use since the early nineties of the twentieth century

    waradana.com

    And

    CBI is preparing to issue a monetary metal parts



    Metal coins from the category of 25 fils were in circulation until the nineties of the last century

    Nora Albjara member of the committee of economy and investment in the House of Representatives revealed that the central bank completed its preparations for the issuance of metal coins of seven small groups, in conjunction with the implementation of the project to delete the three zeroes from the paper currency is currently in circulation.

    She said in her statement Albjara Radio Free Iraq, "said the project will take between four and five years, and which will be the launch of the categories of small coins gradually."

    He predicted the financial expert Hilal Taan inflation rate declines, with the issuance of metal coins of small denominations in the daily financial transactions, remarkable that 3% of the value of inflation in Iraq due to the presence of large cash block.

    The economic expert on behalf of Jamil Anton, noted that he may not find coins accepted by a lot of Iraqis, especially young people, due to the existence of an entire generation of Iraqis had not trading coins due to stop use since the early nineties of the twentieth century.

    http://www.iraqhurr.org/content/article/26666313.html

    and

    Another "FLASHBACK"...

    Economists Divided Over Deletion Of Zeros

    By Amina al-Dahabi for Al-Monitor.

    The Central Bank of Iraq (CBI) has been attempting to delete three zeros from the Iraqi currency since 2003. This project has raised many concerns among the Iraqi public and within the business community, and Iraqi economists are divided…

    …Haider al-Abadi, the head of the Iraqi parliamentary Finance Committee, told Al-Monitor that while deleting zeros from the current currency is possible, this has been postponed until after parliamentary elections. He noted that studies are being carried out to ensure that, following the currency change, counterfeiting is limited and that Iraqis don’t go back to trading in the old currency.

    The step to delete zeros from the currency has been postponed several times, leading the parliamentary Economic Committee to demand that the CBI accelerate this project, as Al-Sharqiya reported. In a news conference held July 6, the Economic Committee confirmed that the deletion of zeros will lead to an increase in the value of the Iraqi dinar and will have positive repercussions, including a reduction in unemployment and poverty rates in the country.

    ARTICLE LINK



  2. #2

    Re: The Dinar Daily, Sunday November 23, 2014

    Currency Auctions
    Announcement No. (2823)


    The latest daily currency auction was held in the Central Bank of Iraq on the 22-11-2014 The port on 23-11-2014 results were as follows:





    DETAILS NOTES
    Number of banks 8
    Auction price selling dinar / US$ 1166
    Auction price buying dinar / US$ -----
    Amount sold at auction price (US$) 104,501,000
    Amount purchased at Auction price (US$) -----
    Total offers for buying (US$) 104,501,000
    Total offers for selling (US$) -----






    Announcement No. (2824)


    The latest daily currency auction was held in the Central Bank of Iraq on the 23-11-2014 results were as follows:





    DETAILS NOTES
    Number of banks 17
    Auction price selling dinar / US$ 1166
    Auction price buying dinar / US$ -----
    Amount sold at auction price (US$) 191,837,000
    Amount purchased at Auction price (US$) -----
    Total offers for buying (US$)


    Market Rate 1201!!!

  3. #3

    Re: The Dinar Daily, Sunday November 23, 2014

    Urgent .. Jubouri: We discussed ways of activating the investment side between Iraq and Jordan



    House Speaker Salim al-Jubouri said Sunday during a press conference held in the Jordanian capital Amman, "it was discussed ways of activating the investment side between Iraq and Jordan .itba


    http://translate.googleusercontent.com/translate_c?depth=1&hl=en&rurl=translate.google.com&sandbox=0&sl=ar&tl=en&u=http://www.faceiraq.com/inews.php%3Fid%3D3259762&usg=ALkJrhgczUqnS-ayE_DeRQ-O3JCpJ1mizQ

  4. #4

    Re: The Dinar Daily, Sunday November 23, 2014

    Saleh: The government is determined to apply the laws of economics



    Written by: Jawad dreams

    BAGHDAD / Center Brief for the Iraqi Media Network (IMN) - Economic Adviser to the Prime Minister announced the appearance of Mohammed Saleh, that the government is bound to activate all economic laws adopted earlier and did not apply so far, including customs tariffs and consumer protection and the protection of the national product laws.

    Saleh added for (IMN) that "there is a tendency of the government to revitalize national industry and strengthening of all aspects." He pointed out that "one of the priorities of government approach is the application and activating the economic laws."

    The House of Representatives has been initiated customs tariff and the protection of the national product and consumer protection laws, but did not apply during the last stage, and disable attributed to lack of readiness of infrastructure at border crossing points to the application of laws.

    Saleh pointed out that "reducing expenses that the federal government began adopting does not mean financially austere as it is to stop the waste of some unnecessary expenses."
    He pointed out that "the government is seeking to reduce unproductive expenditures, which have a great many doors, and you will stop the process of unproductive expenditures significant impact in improving the Iraqi economy by reducing the size of the fiscal deficit."

    Prime Minister Haider al-Abadi and adopted a series of reform measures to combat financial and administrative corruption in state institutions, to reduce this phenomenon, which has become a major threat to the country and its wealth is not less dangerous than terrorism.

    From: Haider al-Tamimi, the Open: Laith Mohammed Reza


    http://translate.googleusercontent.com/translate_c?depth=1&hl=en&rurl=translate.google.com&sandbox=0&sl=ar&tl=en&u=http://www.faceiraq.com/inews.php%3Fid%3D3259668&usg=ALkJrhgvobTLz7ul6k_QDO86AyRED50Z6g

  5. #5

    Re: The Dinar Daily, Sunday November 23, 2014

    Finance Committee: We will ask officially send the budget of the Council of Ministers if they did not send it on time By Shirin Dawood 4 hours ago



    Iraqi cabinet
    Roudao - Erbil
    Said Finance Committee member Abdul Qader Mohammed, Sunday, The House of Representatives will ask the Council of Ministers official letter send the draft financial budget of the country's law, if it is sent on time, the middle of next month.

    He explained Mohammed network Roudao media that "the budget in 2015 will be the middle of next month, sent, along with the 2014 budget in the form of final accounts to the House of Representatives to be talking about them and then ratify them," noting that "if it is not to send the budget to the House of Representatives at the time asked an official letter the Council of Ministers. "

    He added that Muhammad "in case there were clashes on the draft public finance budget law, will be writing notes and put it on the cabinet to be modified."

    The Finance Minister, Hoshyar Zebari, said by hosting the House of Representatives recently, he will be sent to the budget in 2015 in the first week of the month of December next December, pointing out that the government is currently engaged in the preparation of the budget in 2015.

    It is worth mentioning that the oil minister Adel Abdul-Mahdi said in an earlier statement that the expected oil price calculated in the construction budget for fiscal 2015 will appreciate to $ 80 per barrel.

    http://translate.googleusercontent.com/translate_c?depth=1&hl=en&rurl=translate.google.com&sandbox=0&sl=ar&tl=en&u=http://www.faceiraq.com/inews.php%3Fid%3D3259451&usg=ALkJrhgXKdvwbRfCi4Md8TZLO146SG21ow

  6. #6

    Re: The Dinar Daily, Sunday November 23, 2014

    Central Criminal control the execution of former MP Ahmad al-Alwani



    Alsumaria News / Baghdad Central Criminal Court issued, Sunday, sentenced to death former MP Ahmad al-Alwani, while suggesting that the provision can be discriminated.

    A spokesman for the judiciary Judge Abdul Sattar Bayraktar, in an interview for "Alsumaria News", "Central Criminal Court issued, today, a decision to execute former MP Ahmad al-Alwani."

    Bayraktar said that "the decision was made ​​in accordance with Article 406 of the Penal Code," noting that "the decision indistinguishable."

    The first body in the Central Criminal Court in January 2014, the indictment 19 "officially" to the former MP Ahmad al-Alwani issues a "terrorist." It is noteworthy that Anbar province has seen, in (28 December 2013), armed clashes between the strength of the "SWAT" and the army with Alwani and his bodyguards during implementation raid and search operation to his house in Albu Alwan area of Ramadi city center, killing five of his bodyguards and his family, including his brother, and injuring ten others, including children, with the power to arrest al-Alwani thereafter.

    This incident and met with reactions by clan elders and clerics, parliamentarians, most notably former House Speaker Osama Najafi and which he considered "Dasa" of the Constitution, as a parliamentary delegation to go to the province to investigate the circumstances of the case Alwani cost, but the army prevented the Commission from entering the province.

    http://translate.googleusercontent.com/translate_c?depth=1&hl=en&rurl=translate.google.com&sandbox=0&sl=ar&tl=en&u=http://www.faceiraq.com/inews.php%3Fid%3D3259782&usg=ALkJrhgs4v-pDpddPiVqNAVsJbzKEk1ICw

  7. #7

    Re: The Dinar Daily, Sunday November 23, 2014

    Abdul-Mahdi: the budget entirely dependent on oil and hold the policy that lacks wisdom



    Economy and business Oil Minister Adel Abdul-Mahdi, Sunday, attention to other sectors in addition to the oil sector, while stressing that continued to rely entirely on oil in the budget is a case of unhealthy policy and lack of wisdom.

    Said Abdul-Mahdi said in a statement, "Alsumaria News" received a copy of the "Iraq today is based on unilateral economic system and this in itself is not enough for the advancement of the Iraqi economy in the presence of government spending without relying on investment and activate the private sector, as well as idle the rest of the sectors."

    He said Abdul-Mahdi said "hold the pace of those is the case of non-health policy and lack of wisdom," pointing out that "in light of Iraq civilized seek entry into a row of developed countries, we must rely on the sectors in addition to the oil sector."

    He called Abdul-Mahdi to "attention to other sectors in addition to the oil sector," adding that "the country's budget depends entirely on what we export of oil."

    The supreme religious authority announced, on the first Friday (November 21, 2014), not to rely entirely on oil as a source of income, as it called for the advancement of the industrial sector, the possibility stressed that agriculture is an important tributary of the Iraqi economy.

    http://translate.googleusercontent.com/translate_c?depth=1&hl=en&rurl=translate.google.com&sandbox=0&sl=ar&tl=en&u=http://www.faceiraq.com/inews.php%3Fid%3D3259851&usg=ALkJrhiI8Cvf0VQTT0n83RD_0EWvYKptgw

  8. #8

    Re: The Dinar Daily, Sunday November 23, 2014

    Conscious / Minister of Labour: We seek to cooperate with the World Bank for the implementation of development programs for institutions



    Conscious / Baghdad / m. The Minister of Labour and Social Affairs Mohamed Xiaa Sudan said that the ministry is seeking cooperation with the World Bank to implement a number of development programs in their institutions in accordance with modern techniques in drawing strategies successful work.

    The minister said in a statement received (news agency, media / INA) announced today that the Ministry of Labour and Social Affairs had collaborated with the World Bank in the field of social protection have gained experience remarkable success in clarifying the positive tracks in the area of social protection network so aspiring ministry to implement programs to develop methods inclusiveness and develop programming systems and methods of optimal investment and health insurance in coordination with the World Bank to improve the quality of performance and achieve the aspirations of the ministry in the implementation of policy development for the subsidiary units.

    Sudan also stressed the ministry directives in this regard through his speech during his participation acts final review on social protection with the World Bank in Istanbul, indicating the start of a new phase in the work of the ministry depends on the change and the design of the tracks and the deliberate stages, starting with the completion of administrative reform and real and effective to build and develop measures capacity and technical skills, adding that he will form a working group to prepare the executive steps and supporting mechanisms for the implementation of social protection Act No. 11 of 2014.

    http://translate.googleusercontent.com/translate_c?depth=1&hl=en&rurl=translate.google.com&sandbox=0&sl=ar&tl=en&u=http://www.faceiraq.com/inews.php%3Fid%3D3260118&usg=ALkJrhjRT2kU19zSVFzZNbSDUAb8yDIFrA

  9. #9

    Re: The Dinar Daily, Sunday November 23, 2014

    Thank you sczin11!

  10. #10

    Re: The Dinar Daily, Sunday November 23, 2014

    Abdul-Mahdi: rely entirely on oil budget policy lacks wisdom



    Long-Presse / Baghdad Oil Minister Adel Abdul-Mahdi, said on Sunday that Iraq will depend on the "unilateral economic system" is not enough for the advancement of its economy, and while calling attention to other sectors in addition to the oil sector, counting the continuation of totally relying on oil in the budget, "the case is healthy and policy lacks wisdom" .

    Adel Abdul-Mahdi said in a statement released today, and received a (long-Presse), a copy of it, that "Iraq today is based on unilateral economic system and this in itself is not enough for the advancement of the Iraqi economy in the presence of government spending without relying on investment and activate the private sector, as well as idle for the rest of the sectors. "

    He called Abdul-Mahdi to "attention to other sectors in addition to the oil sector," adding that "the country's budget depends entirely on what we export of oil."

    He said Abdul-Mahdi, to "continue on that pace is a case of non-health policy and lack of wisdom," pointing out that "in light of Iraq civilized seek entry into a row of developed countries, we must rely on the sectors in addition to the oil sector."

    The Iraqi Oil Ministry is expected in the 21st of September 2014, the high energy of Iraqi oil exports to four million barrels a day early next year in 2015, with the entry of a fifth floating platform service in the port of Basra, confirmed its intention to address the "Main node" in the export of limited storage capacity , while revealed port management, its intention to implement a new strategic project to extend the pipeline with nautical platform for download within the Japanese loan projects, to raise export capacity through the ports of the south.

    The representative of the religious authority in Karbala, Ahmad al-Safi criticized, in the (November 21, 2014), the lack of economic development plan for the government so far and the dependence on oil as the sole source of the resources of the country, as the government called for the fight against corruption by all means and in all places, without exception .

    Iraq relies on Finance's balance in general for oil and up to more than 90% as the Iraqi government announced its 2013 budget and a budget of 138 trillion dinars, which were adopted from exports increased by 2.9 million barrels at a rate of $ 90 per barrel.

    Iraq has suffered from significant unemployment among young people who either work or class among university graduates, and believed many economists that the statistical estimates for these young people do not necessarily reflect reality actually located.

    http://www.almadapress.com/ar/news/40102/%D8%B9%D8%A8%D8%AF-%D8%A7%D9%84%D9%85%D9%87%D8%AF%D9%8A-%D8%A7%D9%84%D8%A7%D8%B9%D8%AA%D9%85%D8%A7%D8%AF-%D9%83%D9%84%D9%8A%D8%A7-%D8%B9%D9%84%D9%89-%D8%A7%D9%84%D9%86%D9%81%D8%B7-

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