The Dinar Daily, Monday December 22, 2014
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  1. #1

    The Dinar Daily, Monday December 22, 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


    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 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
    – highlights page 94 of the quarterly SIGR report to THE US CONGRESS in April of 2012…
    __________________________________________________ _____________


    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″..

    __________________________________________________ ______________


    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


    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.


    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.


  2. #2

    Re: The Dinar Daily, Monday December 22, 2014

    Dr. Shabibi IS FREE!!! SEE BOX 13 on PAGE 2

    Currency Auctions Announcement No. (2849)

    The latest daily currency auction was held in the Central Bank of Iraq on the 22-12-2014 results were as follows:

    Number of banks 15
    Auction price selling dinar / US$ 1166
    Auction price buying dinar / US$ -----
    Amount sold at auction price (US$) 118,129,000
    Amount purchased at Auction price (US$) -----
    Total offers for buying (US$) 118,129,000
    Total offers for selling (US$) -----
    Market Rate 1217
    Last edited by sczin11; 12-22-2014 at 11:05 AM.

  3. #3

    Re: The Dinar Daily, Monday December 22, 2014

    Disclosure is a special implementation of the Iraqi Islamic Bank shares in session Monday

    Carried out two: Babylon Brokerage (seller) and win Brokerage (buyer) the number of shares held (7) billion shares on the shares of the Iraqi Islamic Bank Company at the time of the extra session (after 12:00 pm), and according to the procedures implementing the great deals.

    Source: Iraq Stock Exchange


  4. #4

    Re: The Dinar Daily, Monday December 22, 2014

    Parliamentary Foreign Affairs: is the Saudi Embassy will be decided within days

    The Commission on Foreign Relations, on Monday, that the Saudi embassy in Baghdad is will be decided over the next few days, denying access private Saudi technical delegation to Iraq.

    Committee Chairman Hassan Chuird Agency / information /, "The Saudi delegation, which is expected to come to Iraq on the opening of the Saudi embassy in Iraq has not arrived yet, but there is a strong tendency for the re-opening of the embassy," noting that "it will be decided in the coming weeks."

    He Chuird that "the Iraqi diplomacy has taken the first step successfully, illustrated through visits by officials in the government and parliament to the States, which will have positive results on the general situation in Iraq."

    It is said that the Saudi newspaper "Middle East" recently revealed the imminent arrival of Saudi technical delegation to Baghdad for the selection of the Saudi embassy in the Green Zone site. Ended a 25

  5. #5

    Re: The Dinar Daily, Monday December 22, 2014

    Infallible Jubouri affirm the need to speed up passage of the budget and hail victories on Daash

    [Baghdad-where] Search the President Fuad Masum, on Monday, with House Speaker Salim al-political process and the security situation developments.

    And Zktr presidential statement received by all of Iraq [where] a copy of the infallible "received at the Peace Palace in Baghdad this morning House Speaker Salim al-Jubouri and discussed during the meeting, the political process and the most important obstacles and challenges they face, and the need to deepen the harmony of the positions taken by the political blocs and higher institutions of the state in order to keep up with the current stage on the way to defeat terrorism. "

    He infallible Jubouri according to the statement "the need to speed up the passage of laws that affect the daily lives of citizens directly, especially the ratification of the general budget of the state."

    The statement pointed out that "the President of the House of Representatives briefed the president on the substance of his recent visits to neighboring countries, noting that these visits have contributed to strengthen Iraq's position in the region."

    He pointed out, "At the end of the meeting, the two presidents across infallible Jubouri for their welcome victories achieved on Daash terrorist organization in a number of areas, and the need to preserve these achievements and to work strenuously to purge the remaining ones" .anthy

  6. #6

    Re: The Dinar Daily, Monday December 22, 2014

    Kuwait calls Abadi provide facilities for companies operating in Iraq

    BAGHDAD / Source News / revealed a Kuwaiti newspaper, on Monday, Kuwait demanded that Prime Minister Haider al-Abadi providing facilities for Kuwaiti companies operating in Iraq and legislation to encourage investment.

    The newspaper "Al-Qabas" its issue today pursued Agency / Source News /, said that "the issue of restrictions on the Kuwaiti companies in Iraq took the space of the talks," indicating that "some Kuwaiti companies are exposed to legal harassment, as is happening now with Zain Iraq."

    The newspaper added that "Kuwait has demanded the Iraqi government the need to provide facilities for Kuwaiti companies to enact legislation encourages them to invest."

    On the other hand newspaper pointed out that "Iraq was supposed to pay for the Kuwait billion dollars next January, as part of the compensation, but the billion Iraqi treasury income, not Kuwait Compensation Fund after defer paid to Kuwait in January 2016, note that the total remaining Compensation is $ 4.6 billion. "

  7. #7

    Re: The Dinar Daily, Monday December 22, 2014

    Of the oil: the budget must be formulated on the basis of $ 50 a barrel, and construction on the US $ 65 is unreasonable

    According to a member of the Parliamentary Commission on oil and energy, Ibrahim Bahr al-Ulum, the low price of a barrel of oil in the market made it difficult to estimate the price of oil and possibly collapsing to below $ session.

    He pointed out that, "the former planning of the budget was based on 64 and $ 65 a barrel has become irrational in spite of our conviction that prices will recover perhaps after the middle of next year."

    And the Bahr al-Ulum that "the supposed price that must be formulated on the basis of the budget by the current atmosphere is $ 50 per barrel, and that changes have occurred in the pricing of next year there could be estimated budget to compensate the budget," he said, adding that "the maximum to produce and export oil Iraq does not exceed more than three million barrels per day maximum, so it is necessary to look for revenue to help the advancement of the Iraqi economy and that many of the provinces have the potential to run a second non-oil sectors of the agro-industrial and private. "

    He Bahr al-Ulum that "the crucial role played by OAPEC in determining the production and pricing and production of oil exporting countries."

  8. #8

    Re: The Dinar Daily, Monday December 22, 2014

    Council calls for modern finance minister to end the liquidity crisis in the judiciary

    Alsumaria News / Anbar - Student Haditha District Council in Anbar province, on Monday, Finance Minister Hoshyar Zebari terminate this liquidity crisis, and the exchange of employees and retirees and the security forces' salaries, noting that the Rasheed Bank in free money from the judiciary, three months ago.

    He said council chairman Khaled Suleiman said in an interview for "Alsumaria News", "Haditha District Council demands Finance Minister terminate this Anakveh liquidity crisis afflicting the judiciary represented employees and retirees after the security forces and the pay."

    He said Solomon, "The branch of Rasheed Bank Haditha in which money does not exist three months ago after the fall of the Heat, however, terrorists Daash and closing the road between Ramadi and modern, "noting that" This is the reason for confusion conduct of everyday life among employees, retirees and members of the security forces. "

    He called Suleiman and Minister of Finance to "send the employees' salaries to the Rasheed Bank in a recent by air bridge link between Baghdad and Anbar in Ain al-Asad base in the hand, al-Baghdadi."

    He called modern Mayor spend Anbar province Abdul Hakim Aljughaifi, Sunday (December 21, 2014), the International Coalition to intensify their missions air bombardment mobilize elements of the organization "Daash" Alkhsfah in the area west of the judiciary and that it intends to attack, from which the modern.

  9. #9

    Re: The Dinar Daily, Monday December 22, 2014

    Abtan: the budget will leave the cabinet insert the current week

    {Baghdad: Euphrates News} detect and Youth and Sports Minister Abdul Hussein Abtan, the determination of the Council of Ministers completion of the draft general budget bill during the current week.

    He Abtan told {Euphrates News} "The Council of Ministers will hold its meeting on Tuesday, to discuss the draft general budget for the 2015 law," pointing out that "the Council of Ministers will hold another meeting, if no agreement is reached in this regard."

    He added: It is expected to be completed by the budget law this week to be sent to the House of Representatives to be approved. "
    It is said that the Iraqi cabinet has postponed its past, to be discussed to reduce the shortfall in the budget and that the House of Representatives approved on schedule and without Takhir.anthy

  10. #10

    Re: The Dinar Daily, Monday December 22, 2014

    sczin11- 1:03 PM Baghdad time monday...Initial report stating NO meeting by Cabinet TODAY!!!

    Cabinet denies a special meeting held today to discuss the budget in 2015

    Cabinet denied convene an extraordinary meeting of the Council on Monday to discuss the 2015 budget.

    An official source from within the Council in a statement to Radio tow the ministerial drafters costly to reduce state spending and reduce the deficit ratio in the budget of 2015 did not complete their work so far, noting that the regular meeting of the Council of Ministers, which will be held on Tuesday will see the launch of this committee for all their findings from talks on the issue of reducing the unnecessary expenditure of state institutions, and the Commission will be addressed during the meeting a draft budget draft for discussion by the Board in accordance with the many topics to be resolved, including the question of the price of a barrel of oil between sixty to seventy dollars.

    The source added that the cabinet may vote on the draft budget tomorrow during Tuesday's hearing in the case was completed dialogues their own or in a special session held after tomorrow's hearing in the case has not been completed these dialogues.


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