Wednesday, February 11, 2015
LDHL Interview: Feb 11, 2015
Please any Questions: send to breitlingcurrency@gmail.com I will get to your questions as soon as possible by personal e-mail, blog post or audio "If you Knew you could not fail, what would you try today?" Philippians 4:13
Saturday, February 7, 2015
Breitling Report: Friday, Feb 6, 2015
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Thursday, February 5, 2015
Breitling Report: Thursday, Feb 5, 2015
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Wednesday, January 28, 2015
Breitling Report: Wednesday, Jan 28, 2015
Please any Questions: send to breitlingcurrency@gmail.com I will get to your questions as soon as possible by personal e-mail, blog post or audio "If you Knew you could not fail, what would you try today?" Philippians 4:13
Monday, January 26, 2015
Breitling Report: Monday, Jan 26, 2015
Please any Questions: send to breitlingcurrency@gmail.com I will get to your questions as soon as possible by personal e-mail, blog post or audio "If you Knew you could not fail, what would you try today?" Philippians 4:13
Parliamentary Finance: Delete the three zeroes from the currency early in 2015
Parliamentary Finance:
Delete the three zeroes from the currency early in 2015
Suggested the parliamentary finance committee, project application
to delete the three zeroes from the currency early next year, saying that the
current situation is appropriate to implement the project. A member of the
Committee Deputy Abdul Hussain al-Yasiri told / JD /: “The central bank has
vowed in the past years the application of the project to delete the zeros
early in 2014, but reversed his decision and announced to wait to implement it,
without knowing the reasons.” According to the agency dinars News
He added: “The project is one of the economic projects important
to the country, being the reduced mass of the large cash and facilitates the
process of transfer and calculated, noting that the implementation of the
project is not linked to the economic situation and political situation in the
country, the fact that the central bank Prepare all supplies for its
Application and the project is now ready for implementation. Pointed out : that
the date of implementation of the project is still not fixed by the central
bank, but it is probably during the next eight months or early 2015. noted that
the Central Bank said earlier that the implementation of the project to delete
the three zeroes from the Iraqi currency depends on the political situation and
economic situation in the country.
Please any Questions: send to breitlingcurrency@gmail.com I will get to your questions as soon as possible by personal e-mail, blog post or audio "If you Knew you could not fail, what would you try today?" Philippians 4:13
Central Bank reserves reach 100 billion dollars
Central Bank reserves
reach 100 billion dollars
Revealed the CBI, on Sunday, announced the arrival of its reserves
of hard currency to the equivalent of 90 trillion dinars end of the month of
February, while expected to continue to increase the proportion “not great” not
being able to reach the barrier percent billion, attributed to the expansion in
Feeding foreign trade to the private sector.
The administration has said the central bank in the gallery its
written reply to questions from the (long-Presse), “The total reserves of the
Central Bank of Iraq Iraq
And affirmed the bank’s management, that “the increase in reserve
growth would continue, but rates are not great,” excluded “arrived from hard
currency reserves hundred billion dollars due to the expansion of foreign trade
in feed for the private sector,”
The Department of the Central Bank, that there is “a great demand
for the dollar through currency auction, which takes the other hand, the Iraqi
dinar is what makes expansion there commercially for some applicants the
dollar.”
It is noteworthy that the Iraqi Central Bank, announced in (the 23
of December 2013 the past), the arrival of the foreign currency reserves of
more than 88 billion dollars, returned it contributes to the stability of the
dinar could be a “source of pride” for the Iraqis.
The Central Bank of Iraq Iraq
The central bank of Iraq
As I mentioned special bulletins Iraq
CBI sells gold to the public it will strengthen dinar and reduce dollarization
CBI sells gold to the
public it will strengthen dinar and reduce dollarization
CBI sells gold to the public it will strengthen dinar and reduce
dollarization
If CBI sells gold to the public it will strengthen dinar and
reduce dollarization
Baidhani described monetary policy successful
Baghdad – Mostafa Hashemi said the academic economic Dr Majid Baidhani that a central bank to activate the monetary policy tools and the willingness to sell gold to the public would be granted dinar greater strength as well as it reduces the dollarization phenomenon experienced by the economy.
Baghdad – Mostafa Hashemi said the academic economic Dr Majid Baidhani that a central bank to activate the monetary policy tools and the willingness to sell gold to the public would be granted dinar greater strength as well as it reduces the dollarization phenomenon experienced by the economy.
added Baidhani in a statement (morning): The adoption of this
measure requires increasing the Central Bank reserves of gold as a cover for
the currency, and the promotion requires finding a basket of currencies to
assess the economy vulnerable to prices, the dollar downwards or upwards.
reserves rose central gold recently from 38 to 90 tons of the
precious metal after he announced the purchase of 60 tons in the past few weeks
for the purpose of selling it to the public, after contracting with companies
to Sikh to ensure the presence of gold purity high and the origins of
well-known global and used as part of their savings. it is hoped that the
proportion of gold allocated to the Mint about 11 tons, and identifies public
need and desire for the allocation of additional quantities Stamping to sell to
jewelers and investors.
said Baidhani that monetary policy tools two types quantitative
tools and tools of quality and different conditions of use depending on the
economic situation of the country for example, in the case of inflation is the
goal of economic policy to achieve price stability and in either case the
downturn will be aimed at achieving economic growth and increased operating.,
and added that the measures taken by the central bank reflect the familiar real
economic reality of the country, where the launch of gold to the public would
control the levels of liquidity and that it increases the rate of adoption of
the public on the financial assets of the real, represented by the precious
metal rather than dependence on foreign currency .
stressed that this measure will reduce the dollarization
phenomenon experienced by the economy, where most of the business transactions
and trade within Iraq
said Baidhani that the weakness of public awareness of the
importance of buying and selling shares in the local currency dramatically in
the emergence of dollarization, which severely hurt the national economy,
adding that this called for reasons that central to the practice of monetary
policy tools effectively to save the economy from deteriorating and to enhance
the strength of gold dinar.
The Central Bank postponed issuing the first local bonds next year
The Central Bank
postponed issuing the first local bonds next year
aghdad (newsletter). The Iraqi Central Bank, announced Monday,
postponed issuing the first local bonds next year 2015, confirmed that
inflation in Iraq Iraq Dubai
He said Bank Governor Abdel Basset Turki said on the sidelines of
a financial Conference in Dubai: that ‘ Iraq has postponed to next year a plan
to issue its first bonds in local currency in 10 years ‘, adding that ‘ legal
difficulties issuing bonds this year as planned. Turkish added that ‘ it is
unlikely that the coming international bonds in 2014 ‘, stating that ‘ the
objective of not financing Government budget deficit but expanding capital
markets and diversify the investment banks ‘ options. In another context, the
Governor of the Central Bank that inflation is ‘ worrisome now as hovering
above the two percent only, pointing out that the ‘ economy is expected to grow
more than eight percent in 2014. ‘/
Tuesday, January 20, 2015
Breitling Report:: Tuesday, Jan 20, 2015
Please any Questions: send to breitlingcurrency@gmail.com I will get to your questions as soon as possible by personal e-mail, blog post or audio "If you Knew you could not fail, what would you try today?" Philippians 4:13
“Strengthen Iraqi Dinar and make it acceptable internationally, not just local”, says banking expert
“Strengthen Iraqi Dinar and make it acceptable internationally, not just local”, says banking expert
Posted by Iraq News Journal on Oct 30, 2013 | Leave a Comment
Suri calls to strengthen the Iraqi dinar and turn it into a currency is possible to deal internationally
October 22, 2013
Called banking expert Majid picture, today, to strengthen the Iraqi dinar and turn it into a currency is possible to deal at the international level, not just local.
He said the picture: that local and international inappropriate disengagement of the Iraqi dinar to the U.S. dollar, ruling out the success of the disengagement of the Iraqi dinar to the dollar being tied to the global system and the development of local industries and agriculture, then the right conditions will be available disengagement dinar to the dollar.
He stressed: the need to find a new global monetary system instituting various currencies, which Maysay him the International Monetary Fund and the World Bank and the Organization of the century in order to create economic stability of the global monetary.
He called Economic Information Center, the government need to work on the disengagement of the Iraqi dinar to the dollar, indicating that the current data do not indicate seriously special programs to find alternatives to the parallel development of the oil.
Gold and the Revaluation of Iraqi Dinars
Gold and the Revaluation of Iraqi Dinars
Posted by Iraq News Journal on Mar 29, 2014 | Leave a Comment
Surprising the economists all over the world, the Central bank of Iraq has purchased 36 tons of gold worth $1.52 billion this month in order to help the Iraqi dinars to get stabilized against the foreign currencies.
The purchase has been recorded as bigger than the purchases that have been taken place in the year of 2013. It helped Iraq to move at the 15th spot.
But anyone following the recent history of Iraq’s dinar is left scratching their head, as this month’s purchase more than doubled Iraq’s gold reserves from 27 tons to 63 tons for an increase of over 133 percent. Despite transacting the 15th largest annual gold purchase in the world, there was absolutely no move in the value of Iraq’s money – holding steady at approximately 1,165 dinars per USD, where it has been for more than two years and three months.
Revaluation of Currency Can Be Anticipated
Since the year of 2010, economists and lawmakers of Iraq are talking over omitting the three zeros from Iraqi currencies. Should it ever happen, the move is expected to be accompanied by a simultaneous revaluation of the dinar by inflating its value overnight, which is seen as necessary in order to properly account for the nation’s vast increase in wealth through oil revenues since the end of the 2003 war?
Thanks to the country’s enormous oil reserves which rank 5th in the world, and its steadily increasing oil production which ranks 7th, progress has been remarkably quick. According to Trading Economics, Iraq’s GDP has grown an average of 6.625 percent per year since 2005, reaching 8.58 percent in 2011 and a stellar 10.2 percent in 2012 – ranking 14th highest in world according to The World Bank. Iraq is in the best shape it has been in years, and is well on its way to mounting one of the greatest economic recoveries since Japan and Germany of post-World War II.
But many believe that all this progress is not being reflected in the value of the dinar, which is being kept pegged to the USD at artificially low levels. As noted in the graph below tracking the value of the dinar (inverse to the graph above), the CBI did inflate the dinar from the end of 2006 to the end of 2008. But it has since then kept the dinar stubbornly suppressed.
Is this why the CBI purchased so much gold this month? Is it preparing to increase the dinar’s value for a second time, as everyone has been expecting? The answer is most likely no.
Increasing a currency’s reserves – through acquiring more U.S. dollars, U.S. treasury bonds, gold, etc. – will strengthen a currency. But if Iraq already has more than 10 years’ worth of economic progress that has yet to be priced into the dinar, then the CBI does not need to buy more gold to increase the value of its money. Ten years of oil wealth would be enough to justify an upward revaluation of the dinar all by itself. If the CBI really wanted to revaluate its currency, it doesn’t need more gold to do it.
Given the CBI’s relentless pressure on the dinar for so many years, it is unlikely to raise the value of its money any time soon. A cheap currency stimulates business activity, creates jobs and lubricates the gears of the economy. It is precisely what western nations have been doing for the past five years since the 2008-09 financial crisis.
Explaining the Need for Extra Gold
While extra gold in its vaults does give the CBI room to increase the value of the dinar, it is likely that the CBI would rather use that extra room to print more money instead. The CBI has been steadily expanding the money supply for years. The extra gold gives it the ability to keep doing so.
In the case of Iraqi money, the CBI would rather have quantity over quality. Using the extra gold to expand the money supply instead of boosting the value of the dinar affords benefits which are much more urgently needed – especially while reconstruction is still ongoing.
The Economic Chain Reaction
The most urgent problem that Iraq faces is a growing population and not enough jobs, as noted by the following graphs.
Iraq’s population has grown by 25 percent since the war ended 10 years ago, while the unemployment rate has been cripplingly high. While fixing this problem is not as easy as I attempt to make it, we could condense the process into one basic objective – create jobs and increase the citizens’ personal wealth.
A series of remedies have been triggered by this though, and they are:
A) Make money cheaper. A cheaper currency is cheaper to borrow, stimulating business expansion and job creation, putting money in people’s pockets which is then spent to further stimulate commerce and growth. But how do we make money cheaper?
B) Increase the money supply. The more money there is circulating through the economy, the cheaper it is to borrow, which empowers businesses, expands commerce, creates jobs, and increases personal wealth. As shown in the graph below, the CBI has been printing money with gusto, steadily increasing the amount of dinars in circulation for years.
But that created a problem. Such a rapid expansion of the money supply caused the currency to fall in value too quickly, eroding purchasing power, making prices more expensive, and creating hyper-inflation – as noted in the graph below where inflation in Iraq reached an incredible 76.55 percent by August of 2006.
C) Increase the interest rate. By increasing interest rates on government bonds, a central bank increases the value of its currency, allowing it to catch-up with runaway prices and brings inflation down. Thus, as noted in the graph below, the CBI increased the interest rate from 7 to 20 percent over 2006 and 2007.
But that created a problem of its own, since rising interest rates make money too expensive to borrow, impeding business expansion, job creation and commerce. To make matters worse, high interest rates make a currency stronger, as noted in the graph below of the dinar’s rapid increase in value from the end of 2006 to the end of 2008 – mostly due to high interest rates that surpassed 14 percent during that entire period.
By 2009, interest rates at 14 percent were way too high to stimulate growth. It ran opposite to what the government wanted to achieve, namely job creation and increased wealth. So the challenge remained: How can you bring interest rates down to make money cheaper, and pump more dinars into the economy to make money more available – without collapsing the dinar and triggering hyperinflation all over again?
Boost in Economy from Gold Purchase
Because keeping interest rates low and pumping more dinars into the economy through daily auctions puts downward pressure on the value of the dinar which leads to inflation, the CBI needs to counter that downward pressure by increasing the nation’s reserves, exerting upward lift to the value of money and helping to keep the dinar steady.
By boosting its gold reserves, the CBI gains some room to play with. It can use that extra room to either increase the value of the dinar, or to print more dinars and release them into the economy without depreciating the dinar and triggering inflation. In the interest of job creation and economic stimulation, it has chosen the later, as most central banks have done worldwide.
So the CBI was speaking truthfully after all. It did buy the gold to help stabilize its currency. But not to make it stronger rather, to prevent the dinar from collapsing and to prevent hyper-inflation as it prints more money to finance its continuing reconstruction.
Alert: The reserve to support the value of the national currency
Alert: The reserve to support the value of the national currency
Posted by Iraq News Journal on Apr 15, 2014 | Leave a Comment
Baghdad – Mostafa Hashemi: Suri described Balmusdh protective oil price fluctuations represents the economic stability of any country component of equal opportunities for the supply and demand for services in it, where he sees an economist that the presence of stability as well as to isolate external influences and minimize the national economy and revitalize the work of the productive sectors and solving economic problems internal push towards strengthening and enhancing the value of the dinar.
overall stability , said economic expert, Dr. Majid picture that the economy is affected by a factor of stability is totally reflected directly on the value of the currency as well as the presence of internal and external influences play a role in determining that value.
He added picture in a statement (morning): The amount of cash reserve represents bumper biggest fluctuations in oil prices follows affect the fluctuation of the exchange rate where it not for the strength of the amount of the reserve sovereign to the value of the dinar. purchasing power and has a cash reserve of the dinar – as announced recently – more than 80 billion dollars paving the way to be because of the Iraqi currency purchasing power larger than it is now, as well as that it will contribute significantly to raise its value against other foreign currencies.
In a time when cash reserves of some countries declines or great heights of a sudden, the cash reserves of the Iraqi paced a solid upward stable away from the fall or the sudden rise. economic reforms and pointed out the picture that enhance the value of the dinar comes by isolating external influences and mitigate the effects of Internal factors of instability in things in general and economic chaos, as the increased demand for goods and services lead to increased demand for the dollar.
stressed that economic development impact of the strengthening of trust and strengthening of the dinar itself, where the economic reforms and the elimination of the problems that hit the Iraqi economy represented by unemployment and the housing crisis, poverty and diversify the services that will balance the need for services in the home, explaining that the activation of the productive sectors will greatly help to provide employment opportunities that reduces imports. domestic production and stressed that offers the possibility of parallel supply and demand for goods and services and local production within Iraq will lead to enhance the value of the dinar, adding that the currencies of other countries as dollar, euro, yen and the yuan and other currencies derived its strength in the currency market of the power economy of their countries.
they also did not get the position, but to solve its economic problems of the Interior. dollarization and hinted the picture that dollarization phenomenon in Iraq, something naturally, especially that all imports of external financial relating to oil is in U.S. dollars, and therefore linked to the national economy in this currency is very large because of all exports and imports in dollars.
added that the phenomenon of resorting to the dollar and Aktnazha linked to the weakness of the local currency and to go to a strong currency in which the trust to be saved, stressing that confidence in Iraqi dinars strong at the present time, because it has a reserve of sovereign strong.
revaluation was an academic economist earlier called for those in charge of the economic sector in Iraq to re-evaluate the value of the currency after it enhances the cash reserve quantities of gold. said Dr. Majid Baidhani he supposed After adding about 1.5 billion dollars to the Central Bank reserves to rise the value of the dinar to a higher level compared to its exchange rate against the dollar, praising the procedures followed in the context of monetary policy, stressing the need to speed up the move to re-evaluate the dinar to strengthen the foundations and pillars of the national economy.
should be noted that the bank Central boosted its reserves of gold to up to 90 tons after announcing the purchase amounts of it for the purpose of selling them to the public in support of enhancing the value of the local currency.
Iraq Buys $1.56 Bln of Gold, Biggest Purchase in 3 Years
Iraq Buys $1.56 Bln of Gold, Biggest Purchase in 3 Years
Posted by Iraq News Journal on Apr 16, 2014 | Leave a Comment
The Central Bank of Iraq acquired the metal to help stabilize the Iraqi dinar against foreign currencies, it said in an e-mailed statement.
Iraq bought 36 metric tons of gold this month valued at about $1.56 billion in the largest purchase by a nation in three years.
The Central Bank of Iraq acquired the metal to help stabilize the Iraqi dinar against foreign currencies, it said in an e-mailed statement. The country held about 29.8 tons of bullion as of August, according to data on the International Monetary Fund’s website. The latest addition was the biggest since Mexico bought 78.5 tons in March 2011.
While nations purchased about 544 tons in 2012 in the largest accumulation in about five decades, acquisitions slowed to 369 tons last year, according to the London-based World Gold Council. Countries will continue buying amounts in the “hundreds” of tons, the producer-funded council said in February. Bullion prices rebounded 9.2 percent since December, after slumping the most since 1981 last year as demand for a store of value waned.
“Gold is quite attractive to central bankers,” Mark O’Byrne, a director in Dublin at brokerage GoldCore Ltd., which has more than $200 million in bullion under management, said today by phone. “They see it as an important asset diversification and a safe-haven element within foreign-exchange reserves.”
Gold for immediate delivery traded at $1,316.15 an ounce in London, after sliding 28 percent last year. It reached a record $1,921.15 in September 2011. Prices averaged $1,344.78 so far this month, valuing Iraq’s purchase at about $1.56 billion.
Iraq’s Reserves
Adding the amount Iraq said it bought in March to its reported holding in August would make it the 40th-largest holder by country, according to the WGC. The nation has no plans to sell metal from its reserves, Muneer Omran, director general of investments at the central bank, said in an interview in Dubai in January.
Bullion had accounted for less than 2 percent of the nation’s total reserves, compared with about 70 percent for the U.S. and Germany, the biggest holders.
“Demand from the likes of Iraq is important,” GoldCore’s O’Byrne said. “It doesn’t necessarily mean it will lead to higher gold prices per se, but it definitely means that there’s an ongoing demand from central banks that is likely to continue” and should support prices, he said.
Mexico owns about 123 tons of the metal, according to the WGC. Turkey’s reserves, at about 488.6 tons now, expanded as much as 44.7 tons in July 2012. Bullion has been added to its balance sheet as a result of accepting gold in its reserve requirements from commercial banks.
Project will lead to reducing the rate of the national currency in circulation from four billion to one billion notes
Posted by Iraq News Journal on Aug 18, 2014 | Leave a Comment
A member of the Finance Committee MP / coalition of Kurdish blocs / Dler capable, that the relative improvement of the value of the Iraqi dinar against the dollar during the current period, making some states want to deal with it. He is capable of: that the Iraqi dinar is improving day after day, thanks to the new monetary policy pursued by the central bank, prompting some countries such as India and neighboring countries wishing to deal in the business processes. He pointed out that the increase in the confidence of the world in Iraqi dinar will make it difficult international currency, likely that the coming weeks will see an improvement over the value of the dinar against the dollar, and this will enhance the confidence of the world with it. India has approached the Iraqi government the adoption of dealing in local currencies in the process of commercial exchanges of the two countries instead of the dollar and currencies in order to support the Indian and Iraqi forces. The Finance Committee has confirmed that 2014 will see the deletion of zeros from the Iraqi currency, are described: The deleted will be in coordination with the Central Bank. The committee member said Abdul-Hussein al-Yasiri in a press statement: The process of deletion of zeros from the national currency will begin during 2014, through an agreement with the central bank, noting: This project will lead to reducing the rate of the national currency in circulation from four billion to one billion. Added: The value will be reduced to the size of the quarter, and this will enhance the value and easy to transport, pointing out that fraud or manipulation of currency cash, it will be very difficult. The CBI identified earlier in the beginning of this year will see the implementation of the project to delete the three zeroes from the national currency, but the Iraqi government has demanded the bank to wait to apply the project, fearing the emergence of counterfeit currency during the switching process.
Please any Questions: send to breitlingcurrency@gmail.com I will get to your questions as soon as possible by personal e-mail, blog post or audio "If you Knew you could not fail, what would you try today?" Philippians 4:13
Monday, January 19, 2015
Will have an Audio up later this afternoon or early in the morning, thanks all, still trying to get schedule in order.
Please hit me up with some questions, will line up a audio schedule for this week.
Breitling
Please any Questions: send to breitlingcurrency@gmail.com I will get to your questions as soon as possible by personal e-mail, blog post or audio "If you Knew you could not fail, what would you try today?" Philippians 4:13
Breitling
Please any Questions: send to breitlingcurrency@gmail.com I will get to your questions as soon as possible by personal e-mail, blog post or audio "If you Knew you could not fail, what would you try today?" Philippians 4:13
Tuesday, January 13, 2015
Breitling Report: Tuesday, Jan 13, 2015
Please any Questions: send to breitlingcurrency@gmail.com I will get to your questions as soon as possible by personal e-mail, blog post or audio "If you Knew you could not fail, what would you try today?" Philippians 4:13
Project will lead to reducing the rate of the national currency in circulation from four billion to one billion notes
Project will lead to reducing the rate of the national currency in circulation from four billion to one billion notes
Posted by Iraq News Journal on Aug 18, 2014 | Leave a Comment
A member of the Finance Committee MP / coalition of Kurdish blocs / Dler capable, that the relative improvement of the value of the Iraqi dinar against the dollar during the current period, making some states want to deal with it. He is capable of: that the Iraqi dinar is improving day after day, thanks to the new monetary policy pursued by the central bank, prompting some countries such as India and neighboring countries wishing to deal in the business processes. He pointed out that the increase in the confidence of the world in Iraqi dinar will make it difficult international currency, likely that the coming weeks will see an improvement over the value of the dinar against the dollar, and this will enhance the confidence of the world with it. India has approached the Iraqi government the adoption of dealing in local currencies in the process of commercial exchanges of the two countries instead of the dollar and currencies in order to support the Indian and Iraqi forces. The Finance Committee has confirmed that 2014 will see the deletion of zeros from the Iraqi currency, are described: The deleted will be in coordination with the Central Bank. The committee member said Abdul-Hussein al-Yasiri in a press statement: The process of deletion of zeros from the national currency will begin during 2014, through an agreement with the central bank, noting: This project will lead to reducing the rate of the national currency in circulation from four billion to one billion. Added: The value will be reduced to the size of the quarter, and this will enhance the value and easy to transport, pointing out that fraud or manipulation of currency cash, it will be very difficult. The CBI identified earlier in the beginning of this year will see the implementation of the project to delete the three zeroes from the national currency, but the Iraqi government has demanded the bank to wait to apply the project, fearing the emergence of counterfeit currency during the switching process.
The Exchange Rate: Justifications for exchange-rate adjustment
The Exchange Rate of Foreign Currency in Economic Feasibility Studies
Below are the central controls related to the exchange rate of the foreign currency to convert the project inputs and outputs from foreign currency to its equivalent in the local currency, and that is by calculating the net discounted present value standard and the internal return on investments in economic analysis that governs investment projects that costs excess one million dinars.
Estimate the shadow price of foreign currency:
1. It is necessary to put central controls to amend the official exchange rate * to reflect the shadow price of the foreign currency, and that is considered one of the necessary requirements to implement the net discounted present value standard and the internal return rate on investment in the economic calculation stated in the instructions, paragraph nine.
The central controls for adjusting market prices distinguished a group of outputs and inputs traded internationally, where the projects production or usage of them is reflected on the abundance of foreign currency in the economy and thus project outputs or inputs used of such are considered purely foreign currency outputs or inputs.
The central controls for adjusting market prices distinguished a group of outputs and inputs traded internationally, where the projects production or usage of them is reflected on the abundance of foreign currency in the economy and thus project outputs or inputs used of such are considered purely foreign currency outputs or inputs.
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* What is meant by exchange rate: the number of units of foreign currency, expressed in dollar per one dinar.
In particular the following outputs and inputs of foreign currency were distinguished:
According to the pricing rules the value of the output and input (traded) is calculated using export prices (FOB) and import prices (CIF), according to what is listed in the pricing rules.
In other words the pricing rules calculate what the project produces from foreign currency (quantity of exports multiplied by the export price (FOB) in foreign currency or the quantity of substitute imports multiplied by the import price (CIF) in foreign currency, as well as what the project uses from foreign currency and imported inputs multiplied by the import price (CIF) in foreign currency …. etc.).
In a later step, project outputs and inputs must be converted from the foreign currency to its equivalent in local currency (dinars) by using a specific exchange rate for the foreign currency.
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2. Justifications for exchange-rate adjustment: there are a number of important and powerful arguments which support the view that the official exchange rate reduces the real value of foreign currency for purposes of calculating the economic national profitability for investment projects and hence for the purposes of investment planning. It is demonstrated in this context to call for assessing the dinar for less than (3.208) dollar (official exchange rate) when assessing project outputs and inputs of traded goods of exports, substitute imports and imports… etc.
The justifications to call for the use of an exchange rate that is lower than the official exchange rate are:
- The use of an exchange rate that is lower than the official rate is the appropriate action at the investment planning level to translate the country’s economic strategy aiming at stimulating central investments in the sectors that encourage the development of non-oil exports, as well as sectors that encourage the expansion of domestic production base in order to reduce imports and compensate it with local commodities. This helps to reduce reliance on foreign exchange earnings from crude oil exports and increases the share of non-oil sectors in the local production.
- The application of the amended exchange rate on project imported inputs will assist in directing investments away from aggregated sectors dependent on imported inputs and the preference of those sectors that rely on locally produced inputs.
- The use of the amended exchange rate helps to correct the balance in favor of the traded goods sectors compared to non-traded goods.
- The real exchange rate has declined rapidly since the early seventies, through rapid rise of the level of prices and local costs which led by the steadiness of the official exchange rate to change in prices and actual local rate costs that gave an advantage for imported goods at the expense of locally produced goods, meaning that it led to deterioration of the competitiveness of alternative replacement goods and export commodities.
- This action shows that the official exchange rate overestimates the value of the dinar, compared to the foreign currency and from the promoting goods substituting imports and export commodities point of view of.
And in support to this view is the state’s utilization and in a broad approach to the customs and quantitative protection policies especially for consumer goods, as well as export subsidies that exports have through an amended export exchange rate.
3. Estimate the amended exchange rate of the Iraqi dinar to be used in technical and economical feasibility studies and for (1.134) dollar per dinar. This price should be approved for 3 years until re-appreciation by the competent authorities.
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