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The Exchange Rate of Foreign Currency in Economic Feasibility Studies

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Post by Guest on Thu Mar 28, 2013 7:24 am


Now I am excited!
Ok, I think we are going to see a 1.134 US by April 15th to May 22nd and 3 years later a rise in the Dinar due to market rises, infustructure development and exports from Iraq to the world. But, as always, and knowing Iraq, take it with a grain of salt.




The Exchange Rate of Foreign Currency in Economic Feasibility Studies

This is a feasibility study completed by the Ministry of Planning (the guy who say he is going to open the budget once its approved by President and placed in Gazette) in March 2013. He goes on the explain what effects the exchange rate of the dinar. Notice the bottom of the report, his study supports a dinar rate of $1.13 to the US $1.






Credit to Phil
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.

http://www.mop.gov.iq/mop/index.jsp?sid=1&id=308&pid=295&lng=en

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Post by Kevind53 on Thu Mar 28, 2013 7:47 am

It does look very promising ... great find.

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Post by Terbo56 on Thu Mar 28, 2013 9:14 am

Sounds awesome to me!!!The Exchange Rate of Foreign Currency in Economic Feasibility Studies 3176285109The Exchange Rate of Foreign Currency in Economic Feasibility Studies 2834342768The Exchange Rate of Foreign Currency in Economic Feasibility Studies 2834342768The Exchange Rate of Foreign Currency in Economic Feasibility Studies 2051221954
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Post by ou812 on Thu Mar 28, 2013 9:27 am

I would take that rate and run like heck.

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Post by Guest on Thu Mar 28, 2013 9:42 am

This article has been around for almost two years, but there has been some changes to it recently. One thing I like about it, is it comes from the government of Iraq and is not speculation from some dinar site or guru. I would also take 1.134 on a few million and wait out the rest! AJ

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Post by Guest on Thu Mar 28, 2013 9:55 am

AJAnderson wrote:This article has been around for almost two years, but there has been some changes to it recently. One thing I like about it, is it comes from the government of Iraq and is not speculation from some dinar site or guru. I would also take 1.134 on a few million and wait out the rest! AJ

I like the way you think, AJ...that last sentence. That sure would help out a lot of people.

:basket: :eggcolor: :sprg: :egg paint:

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Post by Terbo56 on Thu Mar 28, 2013 10:12 am

I believe I mentioned the 22nd of May awhile back, didn't I? That is what I read about Iraqi Gov., too-The Exchange Rate of Foreign Currency in Economic Feasibility Studies 3402893793
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Post by Guest on Thu Mar 28, 2013 11:35 am

AJ, I don't know if this is the same but MORE EXCITING NEWS if not:

Parliamentary economy: Instructions «Central» new soon-transfer companies from banks and blackmail Expert: The dollar is set at 1179 dinars but will rise


She said her last position if it failed after application mid-April .. And financial analyst predicted external pressures

28/3/2013
Parliamentary economy: Instructions «Central» new soon-transfer companies from banks and blackmail Expert: The dollar is set at 1179 dinars but will rise

BAGHDAD - Mustafa Nasser

Showed committee economy parliamentary that the new instructions issued by the Central Bank on controlling the exchange rate of the dollar and that will be applied next month, will enable money transfer companies to get Money directly from the central bank after it was taken over private banks, stressing that the instructions be saved those companies from extortion of private banks.

While it considered that the deadline given by the bank for currency traders to initiate the application instructions, enough, indicated that it wishes a radical solution to the high exchange rate, saying it was waiting for the success of such instructions.

The financial expert said that the exchange rate in accordance with the instructions will be up to 1179 dinars to the dollar, the expectation of rising dollar because of external pressures, considering that some instructions "excessive" under the current circumstances.

Said Abdul-Abbas estrus, a member of the Committee on the economy and investment parliamentary "the world" on Wednesday, "according to the new instructions were allowed to money transfer companies that provide billing for traders importers after it was billing comes exclusively from private banks, and now has become possible to provide invoices through remittance companies Financial, a specific amount not to exceed 500 thousand dollars, "noting that" company money transfer before the new regulations can not effectively get hawala directly from the central bank, because they do not have an account at the Central Bank are providing invoices to private banks that have an account at the Central Bank hawala exchange for them through the organization of an instrument of transfer and launch a week after. "

He went on "FAQ address this situation, because most traders do not import millions as rumored, but import amounts up to 100 or 200 thousand dollars, the bills that are in the millions to the Central Bank fabricated and false", past by saying "so abound outlets hawala front traders not to restrict private banks, in order that there be no control of transfers, but with that if the central bank opened the way for money transfer companies to open accounts he has to allow them to deal with traders as private banks, it will control the biggest. "

The central bank issued new instructions on the sale of the dollar in its daily auction, last Sunday, stressing that the aim from behind to stabilize the exchange rate of the dinar against foreign currency, and meet the needs of the private sector, including the import of goods and services and to encourage banks to expand their scope, stressing that contrary to the instructions new to be applied with effect from next April 15 will be forwarded to the Commission determine the imposition of fines and penalties.

According to the instructions issued by the bank to "share weekly for banks to sell cash dollar be $ 4 million can be increased and the reduction, while the share of money transfer companies $ 150 thousand for companies that have a capital 45 billion dinars, and 100 thousand dollars for companies with less capital for that."

Under instructions that "in the case of submission of invoices and documents fundamentalist goods spectrograph to enter Iraq in advance, the Bank provides a full Akiem those goods from foreign currency after being examined."

And on companies to mediate for buying and selling currencies showed FAQ that "quota weekly 50 thousand dollars to companies with a capital of 500 million dollars, and 25 thousand dollars for companies less than that," adding that "the sale and purchase of foreign currency for the money transfer companies and companies broker for buying and selling foreign currency from through authorized banks in Iraq. "

He estrus that "most private banks now extorting traders constantly, and often complained that private banks take them half the price of exchange in the black market, that is, the bank buys the dollar to 1179, for example, are required to traders buy half of what is needed in 1200 and the other half by 1179, and a lot of our merchants complained and the Central Bank told us about it, "believing that" the deadline given by the Central Bank to launch adequate instructions for preparing the market, and that did not solve the problem these instructions, they should look for other solutions. "

The student member of the Committee on Economy and Investment parliamentary "solution radically, it is not reasonable to reach the dinar to 1270, it is unacceptable," stressing that "there are groups working to create a difference between the dollar and the dinar, and they do not like the high price of the dinar exchange for equal commercial rate with official, because the parasites are manipulating the market for the larger interest of them at the expense of the citizen. "

And said "the Central Bank came as a measure to reduce the influence of private banks, traders, and the central bank wants through these instructions to control the exchange rate through the capital of private banks and money transfer companies, and we are waiting up to 15 next April when the application (actual), to see if instructed useless in this aspect or not, "following up" I am contacting companies money transfer to see if the new regulations تضرهم or serve them and we will know their answers soon, but the important topic that these instructions you will control the exchange rate or not, and this is what we check it now ".

And contacted the "world" yesterday, Zuhair Ali Akbar, deputy central bank governor, but he refused to talk about the topic, calling to talk with other officials at the central bank, and expressed his surprise at the touch media outlet in person, saying that his phone should not be up to media , and asked not to repeat the second attempt, and the closure of his general reporter, "the world" in a way that "silver".

In turn, said Majid picture, financial expert, in an interview with "the world" yesterday, said, "These instructions will provide sufficient funds for local merchants. It is supposed when applying these instructions that there should be limits to sell the dollar cash is 1179 dinars to the dollar it seems" , adding that "either outside formal markets such as banks and banking companies, it is possible that there is increased demand could see a market III contributes to a slight rise in the dollar, but imposed by the instructions that lead to the low exchange rate of the dollar against the dinar."

"The dollar amount allocated to money transfer companies is 100 to 150 thousand dollars by capital, and this amount I think it's sufficient to discharge operation, but I think the pressures that come from outside the local market is that will affect the price of the dollar," believing that "FAQ new requirements superfluous to organize the existing demand for the dollar in light of the prevailing regional conditions. "

He explained that the picture of "the new instructions are compilation of all previous instructions, standardization and attempt to regulate the auction of hard currency at the central bank," noting that "the basic requirements is to ask the switching systems of financial, banking and specific documentation provided by the customer to these institutions, and in the light the central bank given in these documents and make sure of its powers and made available to all the requirements in the financial transformation. "

And increased financial expert said that "FAQ stresses the need for mastery of the opening credits for amounts in excess of 100 thousand dollars, and this will lead to the organization of the process of using banks without using monetary issues," مستطردا "There are some documents that require customs upon receipt of the goods, and also from taxes when purchase and conversion and other issues, and this means that a central link to the work of customs, in order to organize the business processes. "




http://www.alaalem.com/index.php?news=%C7%E1%C7%DE%CA%D5%C7%CF%20%C7%E1%E4%ED%C7%C8%ED%C9:%20%CA%DA%E1%ED%E3%C7%CA%20%AB%C7%E1%E3%D1%DF%D2%ED%BB%20%C7%E1%CC%CF%ED%CF%C9%20%D3%CA%CE%E1%D5%20%D4%D1%DF%C7%CA%20%C7%E1%CA%CD%E6%ED%E1%20%E3%E4%20%C7%C8%CA%D2%C7%D2%20%C7%E1%E3%D5%C7%D1%DD%20%E6%CE%C8%ED%D1:%20%CD%CF%CF%CA%20%C7%E1%CF%E6%E1%C7%D1%20%C8%DC%201179%20%CF%ED%E4%C7%D1%C7%20%E1%DF%E4%E5%20%D3%ED%D1%CA%DD%DA&aa=news&id22=6830>--

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Post by Kevind53 on Thu Mar 28, 2013 12:28 pm

The Exchange Rate of Foreign Currency in Economic Feasibility Studies 252703917 scratch The Exchange Rate of Foreign Currency in Economic Feasibility Studies 3754190863

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Post by Guest on Thu Mar 28, 2013 12:39 pm

April 15th and beyond seems to be some kind of date...

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Post by Kevind53 on Thu Mar 28, 2013 3:24 pm

Yea I caught the April 15th ... but the article itself seems to be written in gibberish with a dollop of double talk.

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Post by Guest on Thu Mar 28, 2013 4:26 pm

Punisher,
That article is telling us that the US Dollar is going to be limited and force the use of the Dinar. It is part of the process of a revaluation to happen. Iraq has to get its citizens back to their own currency to finally elliminate the dollar.
Good article!
AJ

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Post by Guest on Thu Mar 28, 2013 5:31 pm

Aj, all this good news could be adding up to a May rv Smile

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Post by Terbo56 on Thu Mar 28, 2013 6:04 pm

Between April 15th, and May 22nd,or a little after that date, I think I mentioned this earlier back-The Exchange Rate of Foreign Currency in Economic Feasibility Studies 949729897The Exchange Rate of Foreign Currency in Economic Feasibility Studies 2051221954
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Post by Guest on Thu Mar 28, 2013 6:18 pm

Good eye Terbo Smile

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Post by Terbo56 on Thu Mar 28, 2013 6:28 pm

I'm glad you think so! I hope THIS time they follow through with no interruptios- We all should be looking for a 'credit union' to cash out in so the 'crooks and bankers don't screw with our money, What do you say?:cheers:-
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Post by Guest on Thu Mar 28, 2013 6:46 pm

@terbo56 wrote:I'm glad you think so! I hope THIS time they follow through with no interruptios- We all should be looking for a 'credit union' to cash out in so the 'crooks and bankers don't screw with our money, What do you say?:cheers:-
The follow through is the hard part for Iraq!

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Post by Guest on Thu Mar 28, 2013 7:14 pm

I am more hopeful than ever something should happen by May. If June and July come then January 2014.

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Post by Terbo56 on Thu Mar 28, 2013 7:36 pm

Stop it! I want off this friggin sinking ship-The Exchange Rate of Foreign Currency in Economic Feasibility Studies 4115835343The Exchange Rate of Foreign Currency in Economic Feasibility Studies 235134252The Exchange Rate of Foreign Currency in Economic Feasibility Studies 3508649203The Exchange Rate of Foreign Currency in Economic Feasibility Studies 3508649203
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Post by SEBtopdog on Thu Mar 28, 2013 7:42 pm

Hey terbo....For some reason your last post showed up twice, so I deleted one of them. I hope you didn't post it twice ON PURPOSE! If so, I apologize.
The Exchange Rate of Foreign Currency in Economic Feasibility Studies 4052720375

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Post by Terbo56 on Thu Mar 28, 2013 8:12 pm

Seb, I didn't know that- It did the same thing earlier on here, but I caught it- Thankyou 4 taking care of that for me-You don't have to explain anything to me- I know you did it for a reason, and I never had a problem with that- No worries!!The Exchange Rate of Foreign Currency in Economic Feasibility Studies 2243815925The Exchange Rate of Foreign Currency in Economic Feasibility Studies 3454816888The Exchange Rate of Foreign Currency in Economic Feasibility Studies 2051221954
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