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Kaperoni - as investors and investment comes into Iraq, the exchange rate will rise.
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Re: Kaperoni - as investors and investment comes into Iraq, the exchange rate will rise.
Kaperoni
...monetary policy is a set of procedures that the CBI must follow, like all central banks. Their are no short cuts.
That being said, the CBI is trying to do what is right and they have an agreement (SBA) with the IMF to achieve those goals...It takes time and it is a process.
[...can anyone...tell me why the US would give aid to Iraq without something in exchange, example, US insistence that Iraq stay pegged to the dollar?]
The US has said no such thing.
The IMF has stated so under the current conditions and that is because they are guiding the CBI through this financial crisis.
[why would Iraq depeg or stop selling the dollar and "free float" the dinar? It just doesn't seem likely...] ...is not a choice. It is not something that decided randomly, but an event as part of the CBI's monetary policy. To simplify, the CBI has what it calls a Capital Account...in which investment funds are that come through the banking system end up in.
As the Capital Account grows, so does inflationary pressure on the Iraqi economy. As a result, the CBI, must have a more flexible exchange rate (some type of float) to counter this pressure.
In other words, as investors and investment comes into Iraq, the exchange rate will rise.
10.25.2016
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Article: "Coinciding with the victories of our security forces in Mosul, Central ..alpennek raise the price of the dinar against the dollar" Quote: "...the central bank decided to raise the value of the Iraqi dinar against the US dollar by financial mechanisms fall in its policies for indicating that these mechanisms are subject to the principle of supply and demand in the domestic market...the Iraqi dinar will see over the next few days, a significant rise in price against the US dollar"
...if they are talking about the spread, it is a good thing that they reduce it since currently its 1294 which is way over the 2% requirement.
But I do like the words..."a significant rise in price against the US dollar".
10.24.2016
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Article: "During the first economic conference of the projects directed to put up new investment opportunities in Baghdad and the provinces" private investment is all wishful thinking until they open the banking sector/pass the needed laws.
Said many times that the dinar will float. The CBI monetary policy must change if they want foreign investors.
10.23.2016
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