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March 25 IMF Statement (4/02/2014)
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March 25 IMF Statement (4/02/2014)
by Sam I Am Tue Apr 02, 2019 1:52 pm
A few days ago representatives from the International Monetary Fund visited with CBI officials in Amman, Jordan to discuss developments in Iraq's economy and banking sector. At the conclusion they released the following statement:
“Iraq maintained macroeconomic stability in 2013, despite lower than projected oil production and exports. Growth remained solid at 4.2 percent, thanks to non-oil activity of about 7 percent, driven by construction and retail trade. Inflation declined slightly to 3.1 percent from 3.6 percent in 2012, reflecting stable world food and fuel prices. The exchange rate remained stable, and international reserves grew by $7 billion to $78 billion at end-2013 (about 10 months of imports of goods and services).
“Economic activity is projected to strengthen in 2014, with GDP growth rising to over 6 percent thanks to oil production of 3.2 million barrels per day (mbpd) and oil exports of 2.6 mbpd, even though non-oil activity is affected by the security situation.
“However, in 2013, lower than expected oil revenues and increased spending pressures—largely arising from the difficult security situation—weighed on the overall fiscal performance. As a result, the budget deficit rose to 6 percent of GDP for 2013, financed though the Development Fund for Iraq, which declined from over $18 billion to $6.5 in the course of the year.
“The draft 2014 budget envisages large spending outlays reflecting new commitments for security, social assistance and pensions, and transfers to the provinces. To preserve macroeconomic stability, planned expenditure commitments should be scaled down, while preserving key social spending. In the longer run, Iraq should strive to manage well its large, and rising, oil revenues by containing current spending and building up fiscal and external buffers.
“In this connection, we also underlined the importance of strengthening public financial management, including budgetary processes, classification, and reporting, and introducing an integrated information system, to help prepare and execute sustainable fiscal policies.
“We also discussed progress in the financial sector reform agenda. The Central Bank of Iraq is pressing ahead with the improvement of its operations and the reform of the financial sector by preparing new central bank, commercial bank, and anti-money laundering/combating the financing of terrorism legislation, and introducing a new payment system. However, more needs to be done by the government and the central bank to restructure the large state-owned banks, and leveling the playing field for private banking sector, gradually increasing their access to government business.
“The exchange rate—supported by ample international reserves of the central bank—provides a key nominal anchor to the economy and has served Iraq well. We encouraged the Central Bank of Iraq to renew its efforts to liberalize gradually the foreign exchange market, further reducing the spread between the auction and parallel market rates.
“We would like to thank the acting minister of finance, the acting governor of the Central Bank of Iraq, and their staff for the productive and candid discussions we had during the mission.”
http://www.imf.org/external/np/sec/pr/2014/pr14124.htm
The gurus seemed to be all jazzed about this meeting, concluding that it signals a huge increase in the dinar's value. But seeing as how the recommendation was to bring the auction price closer to the market price, I would have to say that this would mean a devaluation if anything since the market price is lower than the auction price at this time.
http://www.cbi.iq/documents/CBI_FOREIGN_EXCHANGE_AUCTIONS.pdf (figures encircled are at the bottom of the page)
Reading comprehension skills are obviously no prerequisite for guru status.
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“Iraq maintained macroeconomic stability in 2013, despite lower than projected oil production and exports. Growth remained solid at 4.2 percent, thanks to non-oil activity of about 7 percent, driven by construction and retail trade. Inflation declined slightly to 3.1 percent from 3.6 percent in 2012, reflecting stable world food and fuel prices. The exchange rate remained stable, and international reserves grew by $7 billion to $78 billion at end-2013 (about 10 months of imports of goods and services).
“Economic activity is projected to strengthen in 2014, with GDP growth rising to over 6 percent thanks to oil production of 3.2 million barrels per day (mbpd) and oil exports of 2.6 mbpd, even though non-oil activity is affected by the security situation.
“However, in 2013, lower than expected oil revenues and increased spending pressures—largely arising from the difficult security situation—weighed on the overall fiscal performance. As a result, the budget deficit rose to 6 percent of GDP for 2013, financed though the Development Fund for Iraq, which declined from over $18 billion to $6.5 in the course of the year.
“The draft 2014 budget envisages large spending outlays reflecting new commitments for security, social assistance and pensions, and transfers to the provinces. To preserve macroeconomic stability, planned expenditure commitments should be scaled down, while preserving key social spending. In the longer run, Iraq should strive to manage well its large, and rising, oil revenues by containing current spending and building up fiscal and external buffers.
“In this connection, we also underlined the importance of strengthening public financial management, including budgetary processes, classification, and reporting, and introducing an integrated information system, to help prepare and execute sustainable fiscal policies.
“We also discussed progress in the financial sector reform agenda. The Central Bank of Iraq is pressing ahead with the improvement of its operations and the reform of the financial sector by preparing new central bank, commercial bank, and anti-money laundering/combating the financing of terrorism legislation, and introducing a new payment system. However, more needs to be done by the government and the central bank to restructure the large state-owned banks, and leveling the playing field for private banking sector, gradually increasing their access to government business.
“The exchange rate—supported by ample international reserves of the central bank—provides a key nominal anchor to the economy and has served Iraq well. We encouraged the Central Bank of Iraq to renew its efforts to liberalize gradually the foreign exchange market, further reducing the spread between the auction and parallel market rates.
“We would like to thank the acting minister of finance, the acting governor of the Central Bank of Iraq, and their staff for the productive and candid discussions we had during the mission.”
http://www.imf.org/external/np/sec/pr/2014/pr14124.htm
The gurus seemed to be all jazzed about this meeting, concluding that it signals a huge increase in the dinar's value. But seeing as how the recommendation was to bring the auction price closer to the market price, I would have to say that this would mean a devaluation if anything since the market price is lower than the auction price at this time.
http://www.cbi.iq/documents/CBI_FOREIGN_EXCHANGE_AUCTIONS.pdf (figures encircled are at the bottom of the page)
Reading comprehension skills are obviously no prerequisite for guru status.
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Re: March 25 IMF Statement (4/02/2014)
by browneyes8011 Tue Apr 02, 2019 3:44 pm
Ummmm... that rate sheet is from 2015!!
The official rate is 1190, per CBI
The official rate is 1190, per CBI
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Re: March 25 IMF Statement (4/02/2014)
by claud39 Tue Apr 02, 2019 6:40 pm
browneyes8011 wrote:Ummmm... that rate sheet is from 2015!!
The official rate is 1190, per CBI
https://www.xe.com/fr/currencyconverter/convert/?Amount=1&From=USD&To=IQD
- Live market rate
Amount
Of
IQDIraqi dinar
AT
USDUnited States Dollar
1 IQD =
0,000836730USD
1 USD = 1 195.13 IQD
1 IQD = 0.000836730 USD
Conversion Iraqi Dinar to Dollar US
Last update : 2019-04-02 22:37 UTC
Read important information about the IQD .
All figures correspond to the rates average market directly, which are not available to consumers and are given for information purposes only. To see an estimate of our money transfer rates, please use our money transfer service.
Claud (Moose)
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Re: March 25 IMF Statement (4/02/2014)
by RamblerNash Tue Apr 02, 2019 11:29 pm
The CBI posts the market rate on their website.
https://cbi.iq/static/uploads/up/file-155410027977777.pdf
https://cbi.iq/static/uploads/up/file-155410027977777.pdf
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Re: March 25 IMF Statement (4/02/2014)
by Sam I Am Wed Apr 03, 2019 10:55 am
browneyes8011 wrote:Ummmm... that rate sheet is from 2015!!
The official rate is 1190, per CBI
It's actually from 2014, and so is the article, which is why I gave the date of the article in the title.
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Re: March 25 IMF Statement (4/02/2014)
by browneyes8011 Wed Apr 03, 2019 12:10 pm
IF you had looked at the CURRENT rate sheet, you would have seen the correct rates, which are in line with the CURRENT market pricing. There is a 9 dinar spread currently, on average.
Reading comprehension skills are obviously no prerequisite for guru status.
Reading comprehension skills are obviously no prerequisite for guru status.
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Join date : 2019-04-02
Re: March 25 IMF Statement (4/02/2014)
by Sam I Am Thu Apr 04, 2019 8:47 am
What do the current rates have to do with an article that I wrote five years ago about a statement that just came out of Iraq? as I stated in the article in order to reduce the gap between the auction price and the market price a devaluation was necessary. In fact they devalued the dinar in 2015 shortly after this article came out.browneyes8011 wrote:IF you had looked at the CURRENT rate sheet, you would have seen the correct rates, which are in line with the CURRENT market pricing. There is a 9 dinar spread currently, on average.
Reading comprehension skills are obviously no prerequisite for guru status.
*****************
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