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Kaperoni Article quote: "A member of the Economic Committee in the House of Representatives Ali Sobhi al-Maliki said his committee held a meeting with Governor of the Central Bank of Iraq, where the latter stressed that it is not possible to raise the value of the Iraqi dinar against the dollar."
IMO this is a great article because even though they can't at this time, they are confirming (of sorts) that the plan is to raise the value of the dinar.
"IMF Managing Director Approves a Staff-Monitored Program for Iraq" Here is something really key...from a chart on page 32. The CBI was suppose to accept Article VIII in 2012! That was exactly when Shabibi was run off. "October 2012 Article VIII acceptance" Over 3 years behind schedule! Quotes: "19. The government will maintain the Iraqi Dinar’s peg to the U.S. dollar..." "20. ...Such a move towards acceptance of the obligations under Article
VIII of the IMF’s Articles of Agreement will send a positive signal to the investment community that Iraq is committed to maintain an exchange system that is free of restrictions..."
IMO, though #19 says..."maintain the Iraqi dinar’s peg to the U.S. dollar" I do not believe that will be the case once they have moved to Article VIII...since this move will invite investment to Iraq (open the door to the new wild west of investment), it will create inflationary pressure.
As a result, the dinar must float to compensate. In any event, once they are in Article VIII, the pressure created on Iraq's economy, will cause the dinar to rise in value (Balassa Samuelson effect)...so we should be very optimistic and excited that Article VIII appears to be coming this year.
Last edited by Ponee on Thu Jan 14, 2016 12:45 am; edited 1 time in total
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Have you ever read Article VIII? It has to do with how they handle exchanging reserves when they need to. Nothing more, nothing less.
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And the reserves are dangerously low. They are frantically working on how to make payroll for April, due to the fallen (36 dollars per barrel) oil prices. Ridiculous to reference 2012. 4 years ago and the landscape is completely different now.
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