The Dinar Daily, Thursday December 18, 2014
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  1. #1

    The Dinar Daily, Thursday December 18, 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 84 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, Thursday December 18, 2014

    Currency Auctions Announcement No. (2846)

    The latest daily currency auction was held in the Central Bank of Iraq on the 18-12-2014 results were as follows:


    DETAILS NOTES
    Number of banks 11
    Auction price selling dinar / US$ 1166
    Auction price buying dinar / US$ -----
    Amount sold at auction price (US$) 89,117,000
    Amount purchased at Auction price (US$) -----
    Total offers for buying (US$) 89,117,000
    Total offers for selling (US$) -----
    Market Rate 1199
    Last edited by sczin11; 12-18-2014 at 01:16 PM.

  3. #3

    Re: The Dinar Daily, Thursday December 18, 2014

    sczin11- Reposted from last nights forum.

    ------

    Iraq gives electronic Visa [to] foreign businessmen


    Baghdad morning - Alaa al-Tai


    The concerned authorities have begun to take the process to grant the visa, "


    electronic investors and foreign businessmen in order to facilitate their entry into the country, the process, and an end to the obstacles that encounter in which the subject of the complaint as long as it has steps.

    This formal procedure, in the words of a government source, said in a statement the "morning" that "is currently being studied to facilitate the granting of visas for investors and foreign businessmen as a first stage mechanism, as will be the" Visa "electronic adoption as a second stage."

    The move is an attempt to attract investors in the government's measures taken in order to diversify sources of funding for the state treasury, as well as to encourage investment across economic, financial and legislative and banking reforms, which would enhance the conviction of investors and international companies to open projects in the official Albulad.almusdr who asked not to be of anonymity, confirmed that "the government and in cooperation with relevant institutions seeking to measures to facilitate the entry of foreign investors .. Since helps to encourage private banks to lend for development and construction of capital projects and rehabilitation," expected to testify next year upswing in the sector Alkhas.uan issue of rationalization government spending, he replied that "the pressure expenses that have been adopted in next year's budget policy will affect only investment projects, without compromising the operating budget, which includes salaries and allowances and retirement." As explained that "spending priorities will be in accordance with the approach reformist government, which was given the oil and electricity sectors of priority economic and service to its importance."

    Close to the economic decision-making circle the government source, confirmed that "the investment projects of the ministries will be affected entirely according to the percentage of completion achieved and the principle of the actual need," noting that "the projects that went more than two years and has achieved rates of advanced achievement a priority, as will pause for those that did not check completion ratios are acceptable. "


    http://translate.googleusercontent.c...R8HA70CvxEUcMw

    sczin11- This may very well be the best news we have seen today, and maybe ALL WEEK! Yes!!! Issuing VISAS TO INVESTORS, ELECTRONIC VISAS....
    Last edited by sczin11; 12-18-2014 at 10:58 AM.

  4. #4

    Re: The Dinar Daily, Thursday December 18, 2014

    Council of Ministers today held a special meeting to discuss the 2015 budget



    Federal Council of Ministers held on Thursday, an extraordinary session to discuss the draft budget for fiscal 2015 Act.

    The Minister of State in the Federal Government Saman Abdullah that 'the Council of Ministers held today, Astnaúaa meeting to discuss the financial budget after the third revision and amendment', adding that 'discussions will focus on the sale of low global oil prices as well as the budget deficit'.

    And between Abdullah that 'in case the vote on the budget today, it will be sent to the House of Representatives for the purpose of approval', adding that 'the federal government is working on approving the budget as soon as possible, and will send it through this month.'

    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%3D3338919&usg=ALkJrhigFk7VfGDKteBdr1e1pt-Kjw0j7A

  5. #5

    Re: The Dinar Daily, Thursday December 18, 2014

    Kuwait agree to the Iraqi request to postpone the payment of compensation

    Kuwait announced it had agreed to an Iraqi request to postpone the payment of the last payment of compensation imposed by the UN Security Council for the invasion of Kuwait in 1990.

    Was quoted by Kuwait News Agency (KUNA) on the Foreign Ministry Undersecretary Khaled Al-Jarallah as saying that Iraqis filed the request formally and individually, and pointed out that Kuwait accepted and responded to that request, who said he would discuss tomorrow in Geneva.

    The agency also quoted a UN official as saying that Iraq, which is under pressure because of the economy, falling oil prices and the war on the "Islamic state" request a postponement for one year to pay $ 4.6 billion in compensation for the destruction of Kuwaiti oil installations during the period of the invasion.

    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%3D3339880&usg=ALkJrhivkUxKFUlVdOcZJ9jCjj5AQ5-pCg

    sczin11- Great! They, Iraq, are 50% home, now we await the approval of the UNSC IN GENEVA, TODAY!

    Last edited by sczin11; 12-18-2014 at 11:12 AM.

  6. #6

    Re: The Dinar Daily, Thursday December 18, 2014

    Parliamentary Economy: not yet at specific points to address the customs tariff law



    {Baghdad: Euphrates News
    } said a member of the parliamentary Economic Committee Ali Sobhi al-Maliki that the committee has not yet been to the specific points to address the customs tariff law up.
    Maliki said in a statement to the Euphrates News} {today, "We as a committee economy and invest in the House of Representatives did not get to far into specific points to address the customs tariff law."

    And that "the situation remains unchanged and we still import materials from outside Iraq, while we can make these companies different materials from inside Iraq."

    The Committee on the economy and investment parliamentary announced earlier that Iraq is the application of the tariff system will enter within the WTO,

    noting that the government is obliged to take action in order to protect the economy and the lack of high Alosar.an

    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%3D3339729&usg=ALkJrhjh4NPEToTjd3Y14fWdPjWW24O7xw

  7. #7

    Re: The Dinar Daily, Thursday December 18, 2014

    Eilan: You must invest payment on credit projects



    BAGHDAD / Center Brief for the Iraqi Media Network (IMN) - Minister of Municipalities Abdul Karim Younis Eilan said, Thursday, it must be reinvested with payment on credit projects, to address obstacles to the austerity plan in place, which will affect the strategic projects in the country.

    The Ministry of Municipalities, earlier, driven by the direction of the giant French companies to discuss with them on the development of sewer lines and wastewater treatment plants, which rely on credit payment mechanism projects.

    He explained Eilan's (IMN), that "there are some projects Alstratejh long-term, and can be intangible among citizens within the ministerial our plan."

    And began to discuss the Parliamentary Services Committee paragraphs infrastructure law - which is based on payment mechanism on credit - a prelude to sending it to the Presidency of the Council of Representatives for inclusion on the agenda,

    From: Mustafa al-Araji, the Open: Yusuf al-Hassani

    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%3D3339865&usg=ALkJrhjfuj4wuVxgcO1PulM_DIvkT1Cmdg

    BGG ~ I have long suspected they would resort to some kind of payment/credit system like this once the "incredibly corrupt" Maliki goverment was uprooted. To allow Maliki access to the "credit cards" would have been financial suicide.

  8. #8

    Re: The Dinar Daily, Thursday December 18, 2014

    House of Representatives plans to enact a law regulating the work of counselors

    Deputy Chairman of the Parliamentary Legal Committee Mohsen al-Sadoun that there is a draft law regulating the work of advisers within the Commission is currently being discussed and will be put to the legislation in the next chapter.
    He added in an interview with Al-Saadoun PUKmedia, Thursday, that "it is possible that there will be a large number of aliens in the ranks of advisers Bcesp the absence of a law regulating their work."

    He said al-Saadoun said "proposed the most widely accepted is that no more than the number three advisers in each of the state's departments because there is a large number in the Council of Ministers and the Presidency and the House of Representatives," he said, adding that this issue will be discussed in the House of Representatives with giving exceptional image to the Prime Minister considering There is an urgent need for the Council to set more than three non-prescription adviser by organizing contracts for those who need them the Council of Ministers. "

    The Deputy Chairman of the Legal Committee that "the law will be of laws for discussion at the beginning of the legislative term and will settle as soon as the fact that there are a lot of names under the recipe adviser without knowing the nature of the work."

    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%3D3339709&usg=ALkJrhgDzIVGjsuhiFykWyoqYTKqVD8M_Q

  9. #9

    Re: The Dinar Daily, Thursday December 18, 2014


    sczin11- initial disappointing news... Let us think for a moment... As the finance committee blames the further fall of the price of oil on this delay, one has to wonder why an excuse such as this, is being portrayed? We know they can support the value of the dinar "to the Roof"! Remember governor Turki stating that back on May 2, 2014? We know they supported the Dinar at a much healthier rate, before the downing of the Sadaam regime! And, oil was LOWER than it is today! Are they waiting for final approval by the UNSC ON KUWAIT PAYMENT POSTPONEMENT? Is a final determination/agreement with KRG on HCL and article 140 in the works? Do the Tarrif laws need final implimentation? Does the investment law need activation?

    Finance Minister: Budget will reach cabinet next Monday


    Written by: Mohammed Saleem

    BAGHDAD / Center Brief for the Iraqi Media Network (IMN) - informed the Finance Minister, Hoshyar Zebari, Center Brief, Thursday, that the ministerial committee in charge of preparing the budget, completed its work, and will provide the general budget in its final form to the Council of Ministers next Monday.

    Zebari said for (IMN), "It was supposed to be held today a special meeting of the Council of Ministers regarding the budget, but the occurrence of developments on the oil prices in the global markets, budget review again summoned and will be submitted to the Council of Ministers as the final next Monday."
    He continued that "the government is determined to provide financial budget for next year, before the end of 2014".

    It is hoped that the House of Representatives cut the legislative recess, and will hold a special meeting, if he took the general budget, to be read and approved.
    From: Farah Adnan, 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%3D3339351&usg=ALkJrhg26e3jOZGe3RJyhuoTyCSKAeZYBw
    Last edited by sczin11; 12-18-2014 at 12:59 PM.

  10. #10

    Re: The Dinar Daily, Thursday December 18, 2014

    Kurdistan: We have not reached a solution gives us the economic independence with Baghdad and we will endeavor to achieve self-Aktefaúna



    Agency eighth day December 18, 2014, 15:41 No comments 19 Reading

    Arbil - ((eighth day)) Minister of Natural Resources, said the government of the region drastically to the right of the Government of the region in its oil export problem independently unresolved with Baghdad, but "hopes for the first time" in the possibility of resolving the longstanding dispute.

    The minister said, "Despite the new agreement, the Government of the Territory had not reached an agreement yet on other issues including the right to export oil independently and revenue-sharing mechanism."

    He Hawrami said, "The Kurdistan Regional Government will do its part fully in helping Iraq in fulfilling the objectives of energy exports. But we set ourselves clear targets for self-sufficiency so it will not face a second economic threats of violence and a ban on our never. "

    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%3D3340224&usg=ALkJrhhOx9HUnns3HJfpUvzMMasPHw9jfg

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