Kaperoni says "the Iraqi market is now open to markets Global directly without restrictions".

by **Ponee** Wed Jul 22, 2015 10:26 pm

Kaperoni

the recent articles about the 50k, 100k notes are not lower denominations, nor are they talking about raising the value of the dinar at this time. The plan, at this time is "status quo" meaning there is no intent to delete the zeros at this time and the issuance of a 50k and possible 100k are to make the dinar more desirable amongst Iraqi's. The hope is not only to get citizens to use the dinar, but to make it easier to carry in public (at the current exchange rate). Adviser Saleh also states the issuance of these notes will help reduce the physical note count. As for when they will begin to delete of zeros, Magda Tamimi said the deletion of zeros and printing new currency is not convenient at the present time and such a project needs more security stability and should wait until the circumstances improve.

Once sanctions were lifted on Iraq, and the banking system, Iraq is free to engage with the world. [so the sanctions have been lifted? is that right?] Yes...sanctions are lifted some years ago. But currently they are under Article XIV with the IMF which is technically called "Transitional" So Iraq is free to engage with any financial instution that is "willing" to take the risk. And many do...Especially since the CBI now guarentees funds/payments from it's financial institutions. The bottom line, is as long as the CBI is under Article XIV they will have trouble finding instutions to do business with them. Its just the nature of it. Now, once the CBI has met the conditions of the Article IV Consultations...And have demonstrated that they can function by those conditions...They can ask the IMF to give them the blessing of sorts to move from Article XIV to VIII.

Article IV Consultations are the name the annual reviews that take place between the IMF and the Central bank. Once the IMF agrees, and the CBI accepts Article VIII, that is like offering a warranty...it makes Iraq much more attractive to global banks and it makes a clear statement that the CBI is in compliance with the IMF. Banks that are conservative in nature (like Wells Fargo) would only do business with other banks that are VIII compliant. I am not saying they would, but Article VIII is a good start for global commerce with the dinar...without it, they continue to struggle for banking partners. So, the article was techically correct.."the Iraqi market is now open to markets Global directly without restrictions".