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IMF Suggests Stable Iraqi Dinar

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1IMF Suggests Stable Iraqi Dinar Empty IMF Suggests Stable Iraqi Dinar Tue Apr 05, 2011 3:21 pm

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IMF Suggests Stable Iraqi Dinar

Posted on 30 March 2011.

A report on Monday by the International Monetary Fund (IMF) suggests that the Iraqi dinar is currently fairly valued at 1170 dinars to the US dollar:


"The CBI [Central Bank of Iraq] will continue to aim at keeping inflation low, predominantly by maintaining a stable exchange rate. The low level and the relative stability of inflation do not suggest any significant over- or under-valuation of the Iraqi dinar. Also, a stable exchange rate continues to provide a solid anchor for the public's expectations in an otherwise highly uncertain environment and in an economy with a very low level of financial intermediation."

The report continues, "Meanwhile, the CBI will continue to keep its policy interest rate positive in real terms. To enhance mobilization of domestic financing, limitations on state-owned banks' use of government deposits for investing in Treasury bills have been reduced, while the pension fund has also been allowed to invest in Treasury bills and to participate in auctions directly."

It also allows for the possibility of an upward drift in the value of the dinar over the years:

"Staff supports the CBI's policy of managing the exchange rate of the Iraqi dinar to keep inflation low. A stable exchange rate continues to provide a solid anchor for the public's expectations in an otherwise highly uncertain environment. Over time, rising oil revenues could put upward pressure on the real exchange rate, which would warrant allowing greater exchange rate flexibility."



http://www.iraq-businessnews.com/2011/03/30/wp-content/uploads/2011/03/IMF-on-Stand-By-Arrangement-280311.pdf

2IMF Suggests Stable Iraqi Dinar Empty Re: IMF Suggests Stable Iraqi Dinar Tue Apr 05, 2011 5:28 pm

azdinar



Link comes up:

404 | Page Not Found!
Sorry, but the page you were looking for is not here.


3IMF Suggests Stable Iraqi Dinar Empty Re: IMF Suggests Stable Iraqi Dinar Tue Apr 05, 2011 6:43 pm

azdinar



Okay so after a little searching I found the link: http://www.iraq-businessnews.com/?s=IMF+Suggests+Stable+Iraqi+Dinar&x=37&y=9

But what is interesting is where they are getting this information from.

Here is link to that: http://www.iraq-businessnews.com/wp-content/uploads/2011/03/IMF-on-Stand-By-Arrangement-280311.pdf

It is worth a glance or read for all. If you have not read it already.

Title is: Iraq: Second Review Under the Stand-By Arrangement, Requests for Waiver of
Applicability, Extension of the Arrangement, and Rephrasing of Access—Staff Report;
Press Release on the Executive Board Discussion; and Statement by the Executive
Director for Iraq.


Below are just some things that stood out to me:

24. Staff supports the CBI’s policy of managing the exchange rate of the Iraqi dinar to keep inflation low. A stable exchange rate continues to provide a solid anchor for the public’s expectations in an otherwise highly uncertain environment. Over time, rising oil revenues could put upward pressure on the real exchange rate, which would warrant allowing greater exchange rate flexibility. Staff also welcomes the authorities’ continued commitment to safeguard the independence of the CBI, which is critical for maintaining confidence in the
Iraqi dinar.




IX. Exchange rate arrangement:

The Central Bank of Iraq has been conducting foreign exchange auction on a daily basis since October 4, 2003. The central bank followed a policy of exchange rate stability which has translated in a de facto peg of the exchange rate since early 2004. However, from November 2006 until end 2008, the CBI allowed the exchange rate to gradually appreciate. As a result, the exchange rate arrangement of Iraq was reclassified to the category of crawling peg effective November 1, 2006. Since the start of 2009, the CBI returned to its earlier policy of maintaining a stable dinar. Consequently, the exchange rate arrangement of
Iraq was reclassified effective January 1 2009 as a stabilized arrangement.
Iraq continues to avail itself of the transitional arrangements under Article

XIV. Iraq has a generally unrestricted current account regime and a significantly liberalized capital account. However, four measures (plus one exchange restriction maintained for national or international security) have been identified to give rise to exchange restrictions subject to
IMF approval, namely, (i) the requirement to pay all obligations and debts to the government before proceeds of investments of investors, and salaries and other compensation of non-Iraqi employees may be transferred out of Iraq, (ii) the requirement to submit a tax certificate and a letter of non-objection stating that the companies do not owe any taxes to the government
before non-Iraqi companies may transfer proceeds of current international transactions out of the country, (iii) the requirement that before non-Iraqis may transfer proceeds in excess of ID 15 million out of Iraq, the banks are required to give due consideration of legal obligations of these persons with respect to official entities, which must be settled before
allowing any transfer, and (iv) an Iraqi balance owed to Jordan under an inoperative bilateral 4 payments agreement. In addition, one exchange restriction maintained for security reasons should be notified to the IMF under the framework of Decision 144-(52/51).

4IMF Suggests Stable Iraqi Dinar Empty Re: IMF Suggests Stable Iraqi Dinar Wed Apr 06, 2011 9:25 am

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Thanks AZ

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