From Iraqi business news 9/6/2011 @ 12:16PM

by Najm93 Tue Sep 06, 2011 12:17 pm

The deputy governor of Iraq’s central bank has announced that foreign currency reserves have risen to close to $58 billion, and are expected to increase further thanks to a rise in oil revenues.
Mudher Kasim said higher global oil prices could result in a budget surplus for 2011.
Reuters quotes him as saying, “(The amount of reserves) has gradually increased since the beginning of last year, when it was $40 billion. Now it is close to $58 billion”, while AlsumariaTV puts the opening figure at $50 billion.
Last October, Kasim had put reserves at around $50 billion, with 45 percent held in dollars, 45 percent in euros and 10 percent mainly in gold and British pounds.
Iraq earned $34.1 billion in oil revenue, an increase of $8.7 billion, or 34 percent, over budgeted revenue, in the first five months of this year, Deputy Prime Minister Hussain Al-Shahristani said in June.
The deputy governor said inflation — which quickened to 7.1 percent in July from 6.4 percent in June — was under control but being monitored carefully.
Iraq, battered by years of war and economic sanctions, depends mainly on imports for most goods, including food and building materials.
“If prices continue to increase and the inflation rate approaches two digits, monetary policy tools will be strongly activated to fight inflation,” he said.
Kasim said a plan to take off three zeroes from Iraq’s currency to simplify financial transactions was awaiting parliamentary approval and said the government should approve the project sooner rather than later.

....IMHO we are just waiting to hear the "report" from the trigger being pulled....

by Najm93 Tue Sep 06, 2011 12:29 pm

Question.... Does anyone know the way this " removal of the zeroes" is gonna go???? Is 25k note now just 25 dinar at the new rate or is it worth 1000 25 dinar notes??? I'm confused scratch

by ghosthunter Tue Sep 06, 2011 12:51 pm

Najm93 wrote:Question.... Does anyone know the way this " removal of the zeroes" is gonna go???? Is 25k note now just 25 dinar at the new rate or is it worth 1000 25 dinar notes??? I'm confused

NOOOOOO!!!!!!! They are not DECREASING the value of their money! They are just removing the larger bills (5,000, 10,000, 25,000 IQDs, etc. just like we did with our larger "three zero" bills. Iraqis will be able to exchange them for smaller denomination bills (I believe, like us, the 100 IQD note will be the largest) which are the equivalent to whatever bill they have. For example, a 1,000 IQD note will get them ten 100 IQDs.

The reason they are doing this can only be for one thing. They will be REVALUING their currency so that they won't have to carry around a 5,000 IQD note just to buy a pack of gum. THERE WILL BE NO LOP! Part of your misunderstanding probably comes from bad translations.

"Don't worry, be happy!" Very Happy

:cheers:

by therealbutterfly Tue Sep 06, 2011 12:53 pm

Ghosthunter,

Just FYI, a lop doesn't devalue anything. Just makes large bills equal to new small bills but both have the same value. Just an accounting issue really.

by **bigdaddytim** Tue Sep 06, 2011 12:56 pm

But be real folks. A lop is no more a certainty than is the RV. Just hold your britches.

by milleriniraq Tue Sep 06, 2011 1:00 pm

Sorry about that post of mine. It was a bit confusing as I did throw the dreaded word that shall not be spoken out there. I didn't mean they would devalue their currency. Maybe if I were better at the definition part, I wouldn't be in the middle of Iraq. Of course, I could always use the heat as an excuse....

by jtdinar Tue Sep 06, 2011 1:02 pm

Najm93 wrote:Question.... Does anyone know the way this " removal of the zeroes" is gonna go???? Is 25k note now just 25 dinar at the new rate or is it worth 1000 25 dinar notes??? I'm confused

Nothing personal, but I am soooooooooo worn out over this question. Im going to make this easy for you. First to answer your question, no. Second, this is the EASIEST way to look at it: Iraq will first RV, then re-denominate (which is replacing the 000's with the NEW Lower Denoms), then eventually retire the 000's with the exception of the 1k notes. Hope this helps. By the way this process does not resemble, infer, imply, or look like a LOP for the last time!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Oh and one more thing.....this all happens simultaneous!!!!!!! Which I think is where the confusion sets in.......JMO

by jtdinar Tue Sep 06, 2011 1:07 pm

bigdaddytim wrote:But be real folks. A lop is no more a certainty than is the RV. Just hold your britches.

So how do you account for the fact that Shabbibi himself has stated BOTH currency's will exist at the same time????? You can't have two different values for a 25,000 note and a 25 note..theres no "Presto, Change 'O" and magically your 000's disappear of the currency...........what people don't understand is that this RV is NOT THE SAME FOR THE IRAQI'S AS IT IS FOR US.......post RV their currency may look like its being LOPPED but in fact it is gaining PPP....(Parity Purchasing Power).......for us the 25k note is still a 25k note......NOT A 25 DINAR NOTE...............

by Najm93 Tue Sep 06, 2011 1:53 pm

@jt.... Just because you say "Nothing personal" does not make your comment any less CONDESCENDING!!! I understand your frustration with the frequency of the question but I'm willing to bet that there are areas where I am more suitable to answer questions than you are.... The question was to gain a deeper understanding of the process!!! I am always willing to humble myself in the persuit of knowledge. Nobody knows EVERYTHING!!!! My ignorance only pertains to this removal of the zeroes business. Apologies again for the reiteration but you will never know if you don't ASK!!!

by therealbutterfly Tue Sep 06, 2011 2:03 pm

jtdinar wrote:
bigdaddytim wrote:But be real folks. A lop is no more a certainty than is the RV. Just hold your britches.

So how do you account for the fact that Shabbibi himself has stated BOTH currency's will exist at the same time????? You can't have two different values for a 25,000 note and a 25 note..theres no "Presto, Change 'O" and magically your 000's disappear of the currency...........what people don't understand is that this RV is NOT THE SAME FOR THE IRAQI'S AS IT IS FOR US.......post RV their currency may look like its being LOPPED but in fact it is gaining PPP....(Parity Purchasing Power).......for us the 25k note is still a 25k note......NOT A 25 DINAR NOTE...............

Yes you can have 2 diff values when doing a redenomination. Feel free to read http://www.pwc.com/en_GH/gh/pdf/re-denomination-of-the-cedi.pdf and that might help you understand how it all works. There is another one I will find for you that lays out how Turkey did it.

by jtdinar Tue Sep 06, 2011 11:38 pm

therealbutterfly wrote:
jtdinar wrote:
bigdaddytim wrote:But be real folks. A lop is no more a certainty than is the RV. Just hold your britches.

So how do you account for the fact that Shabbibi himself has stated BOTH currency's will exist at the same time????? You can't have two different values for a 25,000 note and a 25 note..theres no "Presto, Change 'O" and magically your 000's disappear of the currency...........what people don't understand is that this RV is NOT THE SAME FOR THE IRAQI'S AS IT IS FOR US.......post RV their currency may look like its being LOPPED but in fact it is gaining PPP....(Parity Purchasing Power).......for us the 25k note is still a 25k note......NOT A 25 DINAR NOTE...............

Yes you can have 2 diff values when doing a redenomination. Feel free to read http://www.pwc.com/en_GH/gh/pdf/re-denomination-of-the-cedi.pdf and that might help you understand how it all works. There is another one I will find for you that lays out how Turkey did it.

I don't see anywhere in this article that two different values will exist. Quite the contrary actually, taken from the article................
For companies that adopt IFRS as the
reporting framework, these specific standards
are relevant: IAS 1; IAS 21; and IAS 34.
Companies whose functional currency is the
Cedi will apply the requirements of paragraph
35 of IAS 21 to translate from Cedis to
Ghana Cedis. This is because of the redenominated
functional currency. However,
since ‘the value will be the same’, no
translation differences are expected to occur
in this process. For companies that report
using a presentation currency as defined in
the standard, the requirements of paragraph
39 have to be applied.
Reporting under Ghana
Accounting Standards (GAS)
Companies that use GAS as the reporting
framework have to consider GAS 2 and GAS
19. The reporting currency, as defined in GAS
19, for such companies will change on the
reference date. Paragraphs 6 and 9 set the
rules that should be applied in translating to the
reporting currency. Any translation differences
should be recognized in accordance with
paragraph 11 of the standard. Again since ‘the
value will be the same’ no translation
differences are expected to occur in this
process.

In addition, this was obviously a "re-denomination" not a "revaluation" as we are expecting in the case of Iraq. Iraq must RV first then re-denominate, otherwise it does their economy no good as hyperinflation does not exist currently.

by hhammer Tue Sep 06, 2011 11:44 pm

Agreed. The RV MUST take place first or the entire plan, purpose, country fails miserably. The RV WILL OCCUR FIRST.....IT HAS TO....

by jtdinar Tue Sep 06, 2011 11:48 pm

Najm93 wrote:@jt.... Just because you say "Nothing personal" does not make your comment any less CONDESCENDING!!! I understand your frustration with the frequency of the question but I'm willing to bet that there are areas where I am more suitable to answer questions than you are.... The question was to gain a deeper understanding of the process!!! I am always willing to humble myself in the persuit of knowledge. Nobody knows EVERYTHING!!!! My ignorance only pertains to this removal of the zeroes business. Apologies again for the reiteration but you will never know if you don't ASK!!!

No condescending nature was meant. There is TONS of information out there regarding this topic so your ignorance is unfortunately not an excuse in this case. I don't claim to be a super guru or an information extraordinaire on the IQD, but I have been in this investment for over 2 years now and I have done my homework. My knowledge comes from IMF related articles, the "Future of Iraq" State Department Documents, and many other "fact" based articles and documents. Your quest for knowledge is an admirable one, please PURSUE it.

by therealbutterfly Wed Sep 07, 2011 10:39 am

jtdinar,

When you have a 25k note valued at the same rate as a new 25 note, thats in essence 2 diff rates. But they are used interchangeably. Since you are so well versed in this investment with your whole 2 years of being involved, you should understand what a redenomination is. Since thats what Iraq has stated since 2006 it will do. You surely understand that Turkey, Romania, etc all did the same thing. Why not ask people that lived thru it? There are many on the sites that were there. They clearly state that they could use a 10k note or a 10 note to make the same purchase. Isnt that technically 2 diff rates?????? Hmmm......

You are very condescending in your writing (just like I was above). You seem to have an elitist attitude that you know everything and any other thoughts are wrong. I sure wouldnt want to be around you if this doesnt happen like you claim.

The fact is, no one knows for sure what will happen. If they actually do what they claim they will in their articles, there will be alot of upset people. Those that have widened their mind and accepted ALL options wont be jumpin off bridges. After 8+ years of watching this investment, I have seen how it went from a straight rv at a dime, to now $6+ rates or even $16! Yet no one can explain how Iraq can sustain a high rate with $58bill in reserves backing 30 TRILLION dinar in circulation. Everyone glosses over that with a flip of the hand saying "they have oil etc". Or "they HAVE to be close to Kuwait's rate!", or the best one "Its all about PRIDE! They HAVE to have the highest rate!". Nevermind that they are still rebuilding their country and infrastructure. That it could take a lil bit to get back to the high rates of yesteryear. Nope, no one wants to hear that. But Shabs never said it would be the strongest 'right now', just that it WILL BE.

Personally I am praying for it to happen just like everyone says. But i am fully prepared to see it happen the other way too. It stinks but I am ready for any outcome.

by **greenlight** Wed Sep 07, 2011 2:04 pm

jtdinar wrote:
I don't see anywhere in this article that two different values will exist. Quite the contrary actually, taken from the article................
For companies that adopt IFRS as the
reporting framework, these specific standards
are relevant: IAS 1; IAS 21; and IAS 34.
Companies whose functional currency is the
Cedi will apply the requirements of paragraph
35 of IAS 21 to translate from Cedis to
Ghana Cedis. This is because of the redenominated
functional currency. However,
since ‘the value will be the same’, no
translation differences are expected to occur
in this process. For companies that report
using a presentation currency as defined in
the standard, the requirements of paragraph
39 have to be applied.
Reporting under Ghana
Accounting Standards (GAS)
Companies that use GAS as the reporting
framework have to consider GAS 2 and GAS
19. The reporting currency, as defined in GAS
19, for such companies will change on the
reference date. Paragraphs 6 and 9 set the
rules that should be applied in translating to the
reporting currency. Any translation differences
should be recognized in accordance with
paragraph 11 of the standard. Again since ‘the
value will be the same’ no translation
differences are expected to occur in this
process.

In addition, this was obviously a "re-denomination" not a "revaluation" as we are expecting in the case of Iraq. Iraq must RV first then re-denominate, otherwise it does their economy no good as hyperinflation does not exist currently.

page 4:
The two currencies in circulation
As both currencies will be in circulation for a
period of six months, businesses have to
develop systems to handle both currencies
over that period in their accounting records.
One option is to set up and define the Cedi
(old currency) as another foreign currency in
the financial management systems that
support multi-currency. With this, data can
be captured in both currencies with minimal
data entry errors.

Also, you can expect all you want about our Dinar being a revaluation and not a re-denomination, but that idea is in stark contrast with every bit of news regarding the 3 zero removal.
I can provide many recent articles saying that very thing.
They will re-denominate and they might RV at the same time and will certainly do so over the next 3 years - also from the news out of the CBI.

by therealbutterfly Wed Sep 07, 2011 2:10 pm

http://www.reuters.com/article/2011/09/07/iraq-inflation-idUSL5E7K726V20110907

Here is one that states redenominate. What do you say jtdinar?

Also jtdinar, back to your other post.... country's redenominate AFTER bringing inflation to single (or near) digits. As in the case of Turkey and Romania Wink

by jtdinar Wed Sep 07, 2011 2:19 pm

therealbutterfly wrote:jtdinar,

When you have a 25k note valued at the same rate as a new 25 note, thats in essence 2 diff rates. But they are used interchangeably. Since you are so well versed in this investment with your whole 2 years of being involved, you should understand what a redenomination is. Since thats what Iraq has stated since 2006 it will do. You surely understand that Turkey, Romania, etc all did the same thing. Why not ask people that lived thru it? There are many on the sites that were there. They clearly state that they could use a 10k note or a 10 note to make the same purchase. Isnt that technically 2 diff rates?????? Hmmm......

You are very condescending in your writing (just like I was above). You seem to have an elitist attitude that you know everything and any other thoughts are wrong. I sure wouldnt want to be around you if this doesnt happen like you claim.

The fact is, no one knows for sure what will happen. If they actually do what they claim they will in their articles, there will be alot of upset people. Those that have widened their mind and accepted ALL options wont be jumpin off bridges. After 8+ years of watching this investment, I have seen how it went from a straight rv at a dime, to now $6+ rates or even $16! Yet no one can explain how Iraq can sustain a high rate with $58bill in reserves backing 30 TRILLION dinar in circulation. Everyone glosses over that with a flip of the hand saying "they have oil etc". Or "they HAVE to be close to Kuwait's rate!", or the best one "Its all about PRIDE! They HAVE to have the highest rate!". Nevermind that they are still rebuilding their country and infrastructure. That it could take a lil bit to get back to the high rates of yesteryear. Nope, no one wants to hear that. But Shabs never said it would be the strongest 'right now', just that it WILL BE.

Personally I am praying for it to happen just like everyone says. But i am fully prepared to see it happen the other way too. It censor but I am ready for any outcome.

I understand what you are saying but 2 different notes do not designate 2 different rates as there is only ONE exchange rate. Iraqi's will exchange their 000 notes for the new LD's and you are partially correct, they CAN still use their 000 notes at the new rate but it will not be the same for the Iraqi's as it is outside of the country. As far as Turkey and Romania, the economic climate was completely different. It is Apples and Oranges, they do not compare. A simple re-denomination does nothing for the Iraqi economy without a new value and purchasing power. I am far from claiming to know everything, and ultimately you are correct in that no one knows for sure EXACTLY how this will go down. I can only comment on how I think it WILL NOT go down. Turkey's re-denomination almost collapsed their entire economy. If you read Shabs articles once again, he clearly intends to "raise the value" of the IQD, only then will there be a re-denomination. I MOST CERTAINLY UNDERSTAND WHAT A REDENOMINATION IS AND WHEN IT IS SUCCESSFUL. APPARENTLY YOU DO NOT.......

by therealbutterfly Wed Sep 07, 2011 2:35 pm

jtdinar LOL. You are funny.

by jtdinar Wed Sep 07, 2011 3:14 pm

greenlight wrote:
jtdinar wrote:
I don't see anywhere in this article that two different values will exist. Quite the contrary actually, taken from the article................
For companies that adopt IFRS as the
reporting framework, these specific standards
are relevant: IAS 1; IAS 21; and IAS 34.
Companies whose functional currency is the
Cedi will apply the requirements of paragraph
35 of IAS 21 to translate from Cedis to
Ghana Cedis. This is because of the redenominated
functional currency. However,
since ‘the value will be the same’, no
translation differences are expected to occur
in this process. For companies that report
using a presentation currency as defined in
the standard, the requirements of paragraph
39 have to be applied.
Reporting under Ghana
Accounting Standards (GAS)
Companies that use GAS as the reporting
framework have to consider GAS 2 and GAS
19. The reporting currency, as defined in GAS
19, for such companies will change on the
reference date. Paragraphs 6 and 9 set the
rules that should be applied in translating to the
reporting currency. Any translation differences
should be recognized in accordance with
paragraph 11 of the standard. Again since ‘the
value will be the same’ no translation
differences are expected to occur in this
process.

In addition, this was obviously a "re-denomination" not a "revaluation" as we are expecting in the case of Iraq. Iraq must RV first then re-denominate, otherwise it does their economy no good as hyperinflation does not exist currently.

page 4:
The two currencies in circulation
As both currencies will be in circulation for a
period of six months, businesses have to
develop systems to handle both currencies
over that period in their accounting records.
One option is to set up and define the Cedi
(old currency) as another foreign currency in
the financial management systems that
support multi-currency. With this, data can
be captured in both currencies with minimal
data entry errors.

Also, you can expect all you want about our Dinar being a revaluation and not a re-denomination, but that idea is in stark contrast with every bit of news regarding the 3 zero removal.
I can provide many recent articles saying that very thing.
They will re-denominate and they might RV at the same time and will certainly do so over the next 3 years - also from the news out of the CBI.

Im not expecting anything. Shabs has stated "increase the value" the word "revaluation" itself has been used. Im not pulling these out of my arse. Again, a redenomination does the Iraqi economy NO GOOD without an increase in value.......and they will RV first, Redenom second, then retire the large notes.......ALL SIMULTANEOUSLY......

by jtdinar Wed Sep 07, 2011 3:15 pm

therealbutterfly wrote: jtdinar LOL. You are funny.

YOU AS WELL.......AND THANK YOU FOR THE DEBATE.....WE CAN AGREE TO DISAGREE AND LEAVE IT AT THAT......THE PROOF SHALL BE IN THE PUDDING AS THEY SAY......

by therealbutterfly Wed Sep 07, 2011 3:24 pm

jtdinar wrote:
therealbutterfly wrote: jtdinar LOL. You are funny.

YOU AS WELL.......AND THANK YOU FOR THE DEBATE.....WE CAN AGREE TO DISAGREE AND LEAVE IT AT THAT......THE PROOF SHALL BE IN THE PUDDING AS THEY SAY......

CAN YOU STOP YELLING AT ME PLEASE!!! I DIDNT YELL AT YOU!!!!!!!!

by **greenlight** Wed Sep 07, 2011 3:26 pm

jtdinar wrote:
greenlight wrote:
jtdinar wrote:
I don't see anywhere in this article that two different values will exist. Quite the contrary actually, taken from the article................
For companies that adopt IFRS as the
reporting framework, these specific standards
are relevant: IAS 1; IAS 21; and IAS 34.
Companies whose functional currency is the
Cedi will apply the requirements of paragraph
35 of IAS 21 to translate from Cedis to
Ghana Cedis. This is because of the redenominated
functional currency. However,
since ‘the value will be the same’, no
translation differences are expected to occur
in this process. For companies that report
using a presentation currency as defined in
the standard, the requirements of paragraph
39 have to be applied.
Reporting under Ghana
Accounting Standards (GAS)
Companies that use GAS as the reporting
framework have to consider GAS 2 and GAS
19. The reporting currency, as defined in GAS
19, for such companies will change on the
reference date. Paragraphs 6 and 9 set the
rules that should be applied in translating to the
reporting currency. Any translation differences
should be recognized in accordance with
paragraph 11 of the standard. Again since ‘the
value will be the same’ no translation
differences are expected to occur in this
process.

In addition, this was obviously a "re-denomination" not a "revaluation" as we are expecting in the case of Iraq. Iraq must RV first then re-denominate, otherwise it does their economy no good as hyperinflation does not exist currently.

page 4:
The two currencies in circulation
As both currencies will be in circulation for a
period of six months, businesses have to
develop systems to handle both currencies
over that period in their accounting records.
One option is to set up and define the Cedi
(old currency) as another foreign currency in
the financial management systems that
support multi-currency. With this, data can
be captured in both currencies with minimal
data entry errors.

Also, you can expect all you want about our Dinar being a revaluation and not a re-denomination, but that idea is in stark contrast with every bit of news regarding the 3 zero removal.
I can provide many recent articles saying that very thing.
They will re-denominate and they might RV at the same time and will certainly do so over the next 3 years - also from the news out of the CBI.

Im not expecting anything. Shabs has stated "increase the value" the word "revaluation" itself has been used. Im not pulling these out of my arse. Again, a redenomination does the Iraqi economy NO GOOD without an increase in value.......and they will RV first, Redenom second, then retire the large notes.......ALL SIMULTANEOUSLY......

You did say "we are expecting". I only thought you were including yourself in that.
You make some claims here. I would love to see links to such articles. I've never so far read any news article claiming a "revaluation". I have seen "increase the value", but never prior to an RD. It may be implied as being simultaneous, but never prior. I would love to add such a link to the ones I currently have.
Here's just a few of the latest. As you notice, this process, or project of RDing will not increase the value even a little. It's not meant to do so at all.
These first 3 are much the same from 3 different sources... just so you see it's not just 1 source saying so.
http://www.iraqdirectory.com/DisplayNewsAr.aspx?id=16715
http://www.almustakbalpaper.net/ArticleShow.aspx?ID=8568
http://thecurrencynewshound.com/2011/09/03/iraqi-association-of-private-banks-removing-zeros-is-only-a-modification-not-a-revaluation/

And you should really get a kick out of this one:
http://www.ikhnews.com/news.php?action=view&id=19429

Now, can you show me your facts so I can add to mine please?

by therealbutterfly Wed Sep 07, 2011 3:35 pm

THank you greenlight. I also have never seen nor heard shabs actually state he will revalue the money. Its been redenominate or lift the zeros or delete the zeros since 2006.

From Iraqi business news 9/6/2011 @ 12:16PM

From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM

Re: From Iraqi business news 9/6/2011 @ 12:16PM