Shabbi Side steps IQD questions.

After listening to and then reading the conversation, I wouldn't trust Shabbi to walk my dog across the street if there were no traffic in site!


Read for yourself!


Transcribed.........

John: With respect to the ongoing need for stability in Iraq and its exchange rate, would it not follow that there's a direct need for a potential revaluation of the currency to induce both foreign and domestic investment in iraq and with regard to that, how far do you believe that we are from a potential revaluation of the Iraqi currency?

Thank you very much for this question, and even if I know the answer I can not tell you. (audience laughs) Well the thing is, no I think the questions all you can not have an economist saying without the answer, depends, you know? So the question is actually is the revaluation will uh which is really going to depend on on on to what extent we are going to continue you uhhh let us say controlling inflation. As you know, i don't know if you go to the cbi website, you will see the first objective is maintaining price stability, so uh there is a little bit of inflation in Iraq. I mean its now, it used to be 2%or 3%, now its about 5%. We are watching that very carefully. uhhhh If this inflation continues we'll have to revisit, more revisit, more than revisit and, I can not say. We're going to revisit the question of exchange rates, because I mean, uhhh revaluation, I mean based on inflation of course. I mean you know uh uhhh the other factors that determine the movements in currencies are, look sometimes we look at trade imports and exports, all your obligations and then the balance of payments and all these things definitely no doubt we look at those, but uh uh those are problems relating more with uh with uh the development part of the economy. The question of maintaining price stability is really something you see inflation and all things because no one else in the economy is concerned with inflation. I mean the government put its budget, uhh, I mean the government is the spender, the central bank is the saver. So the, its not very important for them to concentrate on inflation, so actually the question here that we are going to track and follow the development of inflation first and of course other factors as I mentioned. Second, and then we'll determine our exchange rate movement.

Bob: Thank you governor. This may be the same question so I can understand if you can't answer it but I've heard a report that in the last couple of days that iraq is about to cut 3 zeroes off of the currency and that they call this redomination. This may be the same question that you just received, but I wondered if you had any information about that?

Shabibi: Well, I mean I don't know whether its the same question. I think this cutting of the 3 zeroes is uhhh umm uhh has of course, shouldn't be exaggerated is the problem. I mean the question is just redomination and uhh um people, of course you see there are a lot of people that are uhhh writing a lot of articles in the newspapers, I mean criticizing the central bank that its going to the the value of the iraqi dinar is going to depreciate or something. All kinds of talk. I mean this is a question just actually facilitate payment facilitate actually ease of counting and all these things and of course now when you see now a lot of figures, I mean you see trillions, huge figures, I mean if you want to be precise you put about 12 figures or 15 figures on all these things um 15 digits or something. So I think, I think we have a plan on that. And uhhh you remember uhh why the there was not actually a government decree to add these zeroes. They happened actually because of the course of movement of the economy at the beginning of the 80's. I mean just inflation was very high, inflation was rampant and therefore I mean small notes and these things were actually not said not to be used on these things. So uhhh uhhh uhhh government started to add the 3 zeroes and these things and at the time and of course uuhhhhhhhhh conditions are different now. Inflation under control, exchange rate is managed by the central bank all these things. When you have actually the zeroes you could not manage, not of course of the fault of the government or the central bank, which I think there was, but I think the question is that because there was a lot of exigent factors. We're not saying we are champions now, I mean there were actually a lot of external factors which affected actually the behavior of all stake holders and therefore actually a lot of people didnt know actually what to do. They started to add 3 zeroes and all these things, so now actually the situation is completely different from that time. You had the high inflation, you have now a low inflation. You had actually something which is stable, macronomics situation, I mean at the time was actually not stable. So uhhhh the only way to combat all of these things at the time is to increase the denomination and put 3 zeroes. I think, I think uh to bring back uh the Iraqi Dinar where actually the 3 zeroes are removed, and of course you have to this, will have gone hand in hand with monitoring of the exchange rate and all these things. And and and and we'll see. I think now it is uh it is it is probably uhh I mean we are, we are studying that, not studying. We haven't decided actually on that but when but when to implement removal
of 3 zeroes is very soon. But of course this requires not only the central bank activity, this requires because I mean its something you have to make a lot of propagand(a) uhhhh a lot of uh uh uh uhh advertisement campaign and all these things. And you have of course to go probably some a campaign to to to uhh educate a lot of people on these things. So I think, I think it needs a lot of help from the government, from many people in the government, especially the security forces, and we hope that security becomes less busy with the violence issue so they can devote time for us.



Thank you, 4xtrader. Even in print, Shabbi did not say there would be no lop. He side stepped the question.CanadianGirl
Posted Today, 12:33 PM

debintampa, on 27 June 2011 - 12:26 PM, said:

FROM JUNI...