The Dinar Daily, Friday January 9, 2015
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  1. #1

    The Dinar Daily, Friday January 9, 2015





    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
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  2. #2

    Re: The Dinar Daily, Friday January 9, 2015

    Parliament resumes its reading of the budget bill



    BAGHDAD / Obelisk: the House of Representatives resumes its regular Saturday to complete the second reading of the budget law will also host hosts commander of Anbar.

    According to a parliamentary source familiar with the “obelisk” Friday that “the realization of tomorrow will be a hearing schedule for the completion of the second reading and discussion of the draft federal budget for the 2015 law.”

    He added that he “will also be hosting the Chairman of the Board of Anbar province, and an official of the security committee and leader of the Anbar Operations to discuss the security situation in the province.

    And that he “will also be the first reading of the draft accession of the Republic of Iraq to the Promotional Framework for Safety and Health Convention Law No. (187) for the year 2006 by the Foreign Relations Committee, the Committee on Labor and Social Affairs.”

    He said he “will also be the first reading of the draft law of treaties held by the Committee on Foreign Relations, (34 articles),” noting that “the meeting will start eleventh in the morning.”

    http://almasalah.com/ar/NewsDetails.aspx?NewsID=44620

  3. #3

    Re: The Dinar Daily, Friday January 9, 2015

    Speaker of Parliament calls to speed up the resolution of the detainees in the prisons of the Ministry of Justice issues


    Information / Baghdad / ..

    The head of the House of Representatives Saleem al-Jubouri, on Friday, to the need to expedite the resolution of the cases of detainees in the prisons of the Ministry of Justice and presented to the judges.

    He said al-Jubouri’s office said in a statement received by the agency / information / copy of it, “House Speaker Dr. Salim al-received in his own office, yesterday evening, Justice Minister Haidar Zamili,” noting that “During the meeting, they discussed the Ministry’s work and ways to improve by working in departments justice, also addressed the meeting, the Special Amnesty Law file in addition to the subject of detainees. “

    Jubouri stressed “the need to expedite the resolution of their cases in the prisons of the ministry and presented to the judges.” Finished / 25

    http://translate.googleusercontent.com/translate_c?depth=3&hl=en&prev=/search%3Fq%3Dfaceiraq%26client%3Dsafari%26hl%3Den&rurl=translate.google.com&sandbox=0&sl=ar&u=http://www.faceiraq.com/inews.php%3Fid%3D3402698&usg=ALkJrhjShRGW8RtWRRfi-mp8dCadAurKCw

  4. #4

    Re: The Dinar Daily, Friday January 9, 2015

    Parliament will vote on the commission of inquiry in the fall of Mosul, and is composed of 26 members


    Brother – Baghdad

    Voice of the House of Representatives, on the formation of the parliamentary investigative committee for the fall of the city of Mosul, however Daash terrorist gangs in the 10 last June.

    The MP said the National Alliance Razak Mheibes in a press statement that “the parliament voted to form a committee consisting of 26 members.”
    He said “the Commission took into account the representation of the components of the Iraqi people, with priority given to Deputy Nineveh.”

    The House of Representatives in the form of 15 November last in 2014, a committee comprising members of the security and defense committee and deputies from Nineveh province to investigate the events in the city of Mosul on 10 June, and fall, however Daash terrorist gangs.

    http://www.khabaar.net/index.php/permalink/38579.html

  5. #5

    Re: The Dinar Daily, Friday January 9, 2015

    Parliamentary Integrity looking for a contractor responsible for implementing the projects of others in Baghdad


    Brother – Baghdad

    Pledged to Parliamentary Integrity Committee member Mohammed Hamidi, on Friday, to open an investigation on the non-implementation of previous projects if Baghdad governorate know the identity of the contractor in charge of those projects, pointing to the existence of agreements between contractors and some of the beneficiaries of the projects contributed to this reluctance.

    He said Hamidi said in a statement seen by the Agency for News Agency (et) that “the Commission integrity not received so far any evidence to reveal the identity of the contractor in charge of the former province of Baghdad, which have not been implemented projects,” stressing that “if we have received any information about him, we shall proceed to open an investigation the subject. “

    Hamidi said, that “the beneficiary of these entities do not follow Projects directly Contractors for many reasons, including the agreement reached with some of them,” noting that “the lack of follow-up contractor will lead to the implementation of the low prices and bad and specifications.”

    A source revealed Integrity Authority, on Thursday (January 8, 2015), that the contractor has eight companies did not perform the previous Baghdad governorate projects, as pointed out that the contractor bought land in Amman and the other seeks to buy.

    http://www.khabaar.net/index.php/permalink/38621.html

  6. #6

    Re: The Dinar Daily, Friday January 9, 2015

    Nijaifi, Jobouri discuss cooperation among Presidencies

    Baghdad (AIN) –The Speaker, Saleem al-Jobouri and the Vice-President, discussed the political and security updates.

    A short statement by the Speaker’s office received by AIN cited “Both sides discussed activating cooperation among the three Presidencies.” /End/

    AIN News - alliraqnews.com

  7. #7

    Re: The Dinar Daily, Friday January 9, 2015

    Parliament to continue conducting 2nd reading of Budget Law next Saturday


    Baghdad (AIN) –Parliament will continue conducting the second reading of the Budget Law during next Saturday session.

    Informed parliamentary source stated to AIN “Saturday session agenda involves keeping the 2nd reading of the Budget Law draft and hosting local officials of Anbar to discuss the security situation in the province in addition to conducting first reading other law drafts.” /End/

    http://www.alliraqnews.com/en/index.php/political-news/62883-parliament-to-continue-conducting-2nd-reading-of-budget-law-next-saturday.html

  8. #8

    Re: The Dinar Daily, Friday January 9, 2015

    Religious Authority stresses necessity of setting quick plans to invest natural gas

    Karbala (AIN) –The Religious Authority stressed the necessity of setting quick plans by the concerned officials to invest the natural gas by making use of other countries’ experiences in this regard.” /End/

    AIN News - https://www.alliraqnews.com

  9. #9

    Re: The Dinar Daily, Friday January 9, 2015

    Religious Authority calls to set strict rules to reduce number of official holidays



    Karbala (AIN) –The Religious Authority called to set norms to reduce the number of the official and unofficial holidays to the minimum number. /End/

    AIN News - http://www.alliraqnews.com/en/

  10. #10

    Re: The Dinar Daily, Friday January 9, 2015

    General Secretariat of the Council of Ministers announced that the government has completed 90% of its government during the past three months.

    BAGHDAD / Obelisk:


    And the transfer of a statement from the Secretary General of the Council of Ministers Hamid Khalaf Ahmed said he was “the issuance of guidance from the Council of Ministers can ministries and agents to follow the government program in coordination with the committee supervising the implementation of the government program, and team gear, the General Secretariat of the Council of Ministers.”

    The Secretary of the Council of Ministers presided over the league Agents Council, which was held at the Secretariat building in the presence of agents of all ministries, “prepared by the Secretariat report on the government program on the basis of plans submitted by the ministries.”

    He called on the secretary-general and deputy ministers to “provide the government program completion rates, starting from the next meeting scheduled to be held early next month.”

    He pointed to “the possibility of interference Cabinet General Secretariat early to prevent a lag in the projects.”

    He Secretary General of the Council of Ministers that “the government has fulfilled about 90% of its obligations within the agreed in the government program time bishop during the first three months of the life of the government,

    calling for the ministries to walk the same vigor follow through agents of government strategy from within their ministries.”

    The Deputy Secretary General of the Council of Ministers a brief explanation of the most important steps to streamline the government’s measures, which included most of the ministries and provincial government departments.

    While the general manager of follow-up and coordination of government department in the General Secretariat of the Council of Ministers to provide some ministries observations on the private and government program and steps taken by the High Commission to follow up the implementation of the government program in the report.

    The meeting also saw a review of the experience of the General Secretariat of the Council of Ministers on the overall quality, and an explanation of the mechanism to reduce the public budget expenses and overcome the negative effects by Undersecretary of the Ministry of Construction and Housing,

    and the gentlemen agents launched a series of special topics administrative reform and simplification of procedures, operational problems, and propose to organize some laws and the issuance of reformist decisions commensurate government program.

    http://almasalah.com/ar/news/44612/%…D8%B2%D8%AA-90

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