TNT Chatter 9/15/18

by **Ssmith** Sun Sep 16, 2018 9:42 am

TNT

Authorsamoliver:
CBI AUCTION ONLY SELLING DINAR

CBI decided on 12 Sep 2018 to perform public auction No.(D208) to sell CBI Securities for (182) days and for (100) Billion IQD, The remittance was sold for (60) Billion IQD with multiple interest price and with the highest cut off price (2.50%) , The number of participant was (4), Only (3) Bank won the offered amounts. https://cbi.iq/news/view/842

NOTICE THAT NO MORE DOLLARS ARE BEING SOLD AT AUCTION. NOW, THE CBI SECURITIES ARE BEING SOLD FOR 182 DAYS AT 100 BILLION IQD. NO MORE DOLLAR DISTRIBUTION IS GOING ON BETWEEN BANKS FOR 182 DAYS.

LET'S SAY THAT AGAIN. NO MORE DOLLARS BEING SOLD BETWEEN IRAQI BANKS FOR THE NEXT 182 DAYS. ONLY THE DINAR CAN BE USED.

LET'S TAKE A CLOSER LOOK AT THE ABOVE NOTICE. SECURITIES ARE TRADED IN A SECONDARY MARKET. WHAT THIS MEANS IS THE CBI HAS BEEN DISTRIBUTING ITS OPERATIONAL BUDGET ACROSS IRAQI BANKS, SO THEY CAN DEVELOP A MARKET BASED INSTRUMENT OF MONETARY POLICY AND FACILITATE THE ISSUANCE OF MOF SECURITIES.

A SECONDARY MARKET IS A FINANCIAL MARKET WHEREBY PREVIOUS STOCKS, BONDS, OPTIONS, AND FUTURES CAN NOW BE BOUGHT AND SOLD. THIS ALSO INCLUDES LOANS THAT CAN BE SOLD TO INVESTORS. THIS IS NOT SOMETHING THAT CAN BE DONE ON A PROGRAMMED RATE.

NOW, LOOK JUST A LITTLE CLOSER.

WHEN YOU BUY AND SELL GOVERNMENT SECURITIES IN BANKING, YOU HAVE JUST GONE INTO AN OPEN MARKET OPERATION. HERE IS WHAT AN OPEN MARKET OPERATION SYSTEM DOES. IT BUYS AND SELLS GOVERNMENT SECURITIES IN THE OPEN MARKET TO EXPAND OR CONTRACT ANY AMOUNT OF MONEY IN THE BANKING SYSTEM THAT IS NO LONGER EXCLUSIVE IN IT'S SCOPE OF TRADING WHICH IS NOW BEING DONE ON AN OPEN MARKET.

ONE FINAL NOTEWORTHY STATEMENT WAS USED ABOVE. MULTIPLE INTEREST PRICING WAS USED IN TRADING AMONG THE IRAQI BANKS ON THIS AUCTION.

THIS IS WHEN YOU COMPARE ASSETS AND DETERMINE MARKET VALUES FOR THESE ASSETS.

WHAT DOES ALL OF THIS HAVE TO DO WITH YOU AND ME? WELL, IT MEANS THE CBI CAN NOW BUY DINAR FROM ANYONE IN THE WORLD. YES, THE IRAQI DINAR IS NOW ON THE OPEN MARKET SYSTEM WITHIN THEIR OWN COUNTRY.

THIS MEANS THEY CAN RELEASE IT TO THE WORLD AT ANY GIVEN MOMENT FOLKS ONCE THEY ARE ABLE TO OPERATE THEIR NEW FINANCIAL SYSTEM, AND IT LOOKS LIKE THEY ALREADY ARE.

Tishwash:
this was just one offering, they will be selling dollars again on Sunday IMO the auctions is closed on Friday and Saturday

Authorsamoliver:
Let's hope it is continuous and the dollar has stopped. It would be terrible to give such hope to the people of Iraq by giving them open market trading options for one day, and then, take them away. Time will reveal all things. Wink

Denise:
For me the great news about starting open market operations in dinar is that this is one of the primary mechanisms to reduce the money supply M2. Iraq has printed 86 trillion IQD since their rate of $2.85 and it is this printing that has devalued their currency.

It is my hope that they will begin selling dinar-denominated securities to reduce the M2 and make a higher rate possible.

referencing the M2 as of July 2018

Iraq Money Supply M2 2003-2018 | Data | Chart | Calendar | Forecast

Money Supply M2 in Iraq increased to 89332 IQD Billion in July from 88363 IQD Billion in June of 2018. Money Supply M2 in Iraq averaged 53307.10 IQD Billion from 2003 until 2018, reaching an all time high of 90728 IQD Billion in December of 2014 and a record low of 6953 IQD Billion in December of 2003.

tradingeconomics.com/iraq/money-supply-m2

Harambe:
AP News: Iraqi lawmakers elect Sunni Arab as parliament speaker (9/15/18)

Also Saturday, legislators elected Hassan Karim as the first deputy parliament speaker, according to legislator Dhafer al-Aani. Karim is a member of al-Sadr’s bloc.

The parliament has yet to vote for the second deputy parliament speaker, a Kurd.

Three members of parliament are running for the seat. ... Parliament now has 15 days to elect the president who will task the nominee of the largest bloc to form the government.

Political wrangling among the Shiite-led blocs and other factions will likely indefinitely delay the process of naming a prime minister.

https://apnews.com/9b24d2a0a3f54372ac1e5f9594481f94