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Thread: Accumulation of Reserves will Help Defend the Value of the Dinar

  1. #1
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    Default Accumulation of Reserves will Help Defend the Value of the Dinar

    Iraq’s draft oil law heads for parliament after cabinet nodPublished: Wednesday, 4 July, 2007, 02:14 AM Doha Time

    AMMAN/DUBAI: The Iraqi cabinet yesterday approved an amended version of the controversial draft oil and gas law and will submit the document to parliament for final approval, an Iraqi government official said.
    “The cabinet has endorsed the draft oil and gas law and it will submit it to parliament,” Oil Ministry spokesman Assem Jihad told Dow Jones Newswires.
    The Iraqi cabinet will send the controversial to parliament today, top oil and gas adviser to Prime Minister Nouri al-Maliki said.
    “The cabinet has approved the draft oil and gas law and it will send it to parliament for approval Wednesday,” Thamer al-Ghadhban told Dow Jones Newswires.
    It isn’t known, however, if the cabinet has endorsed only one part of the law which deals with the distribution of oil revenues among Iraqi regions and governorates or the whole bill.
    Al-Ghadhban said last week that negotiations on other disputed clauses of the law would take two months before they could be settled and after that the law would go to parliament.
    The draft law was first approved by al-Maliki’s cabinet in February but new disputes then emerged between the central government in Baghdad and the northern Kurdistan Regional Government that have delayed it.
    The law is meant to bring in international oil companies to invest in Iraq’s potentially lucrative oil fields whose estimated proven oil reserves could reach 115bn barrels.
    The US Administration has been urging Iraqi leaders to speed up the enactment of the hydrocarbon law along with other laws that it says are crucial to national reconciliation.
    Iraqi oil officials couldn’t be reached to comment on the new amendments made to the draft law.
    Officials of the Kurdistan Regional Government had been in dispute with their counterparts in the federal government in Baghdad over who should control untapped oil fields.
    An old version of the draft law proposed that most of these oil fields are to be controlled by a yet-to-be-established national oil company.
    The Kurds rejected that provision of the law.
    But both sides reached last month an agreement on the distribution of oil revenues, under which the Kurds would get up to 17% of these revenues on monthly basis after deducting federal government expenditure.
    Meanwhile, the International Monetary Fund said Iraq is accumulating foreign currency reserves through oil sales hasn’t drawn on cash available through the Fund, even as fighting devastates much of the country.
    “The economy hasn’t really got going, but at the same time, oil prices have helped them a lot, so they have been generating quite large surpluses,” Mohsin Khan, the IMF’s director for the Middle East and Central Asia, said in a telephone interview from Washington on Monday.
    The accumulation of reserves will help defend the value of the dinar and slow inflation, which accelerated to 65% last year, according to the Central Bank of Iraq.
    The central bank raised its benchmark interest rate to 20% in January from 16%, and consumer prices rose 2.3% from December to May, central bank data shows.
    Iraq has had a standby programme with the IMF since the beginning of 2006, and will maintain it until the end of 2008, as a condition for a debt relief programme negotiated with the so- called Paris Club.
    The country has foreign reserves of about $23bn, $18bn of which is held by the Central Bank of Iraq, and the remainder by the Development Fund for Iraq, Khan said on Monday. – Dow Jones Newswires, Bloomberg


    http://www.gulf-times.com/site/topic...8&parent_id=28
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  2. #2
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    Is this suggesting/defending a reval?

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    Nope - just stablility.

    The HCL will defend an RV - major asset.

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    Seems this artcle kinda goes with yours Rock. "Stability" seems to be the new IMF buzzword.

    Gulf oil producers should keep dollar-peg, says IMF

    (MENAFN - Times of Oman) DUBAI — The International Monetary Fund said Gulf oil producers, including Saudi Arabia and the United Arab Emirates, should keep their currencies fixed to the dollar and will not come under pressure to revalue.

    "A fixed exchange rate is best for these oil producers," Mohsin Khan, the IMF's director for the Middle East and Central Asia, said in a telephone interview from Washington on Monday. "Their main export is priced in dollars, it makes it easier for them to hedge."

    Soaring oil exports and not undervalued currencies have fuelled the region's current account surplus, Khan said. It is hard to tell if their currencies are misaligned, he added.

    The comments come a week after Morgan Stanley said Middle East oil producers might face pressure to revalue their currencies to narrow the surpluses. China has been the main focus of criticism from the IMF and US for keeping the yuan undervalued to spur exports, though oil exporters have a collective current account surplus of 25.5 per cent of gross domestic product, compared with 9.5 per cent in China, Morgan Stanley analyst Serhan Cevik said in the note.

    "The analytical framework for deciding on fundamental misalignment for oil producers is lacking, because some of these countries are running surpluses through no fault of their own," Khan said on Monday.

    The IMF last month said it will require its 185 member countries to reject practices that create instability for other nations, such as "currency misalignment."
    "Human beings make life so interesting. Do you know that in a universe full of wonders they have managed to invent boredom?" ~spoken by Death, in The HogFather

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    the International Monetary Fund said Iraq is accumulating foreign currency reserves through oil sales hasn’t drawn on cash available through the Fund, even as fighting devastates much of the country.
    Right, lets keep those oil prices high!
    “The economy hasn’t really got going, but at the same time, oil prices have helped them a lot, so they have been generating quite large surpluses,” Mohsin Khan, the IMF’s director for the Middle East and Central Asia, said in a telephone interview from Washington on Monday.
    The accumulation of reserves will help defend the value of the dinar and slow inflation, which accelerated to 65% last year, according to the Central Bank of Iraq.
    The more foreign reserves the higher the value!
    The country has foreign reserves of about $23bn, $18bn of which is held by the Central Bank of Iraq, and the remainder by the Development Fund for Iraq, Khan said on Monday. – Dow Jones Newswires, Bloomberg

    This clears up any confusion about the DFI funds being accounted for in the CBI financials

    As of 14-June Gross Foreign Assets of CBI

    26,488
    26,488,000,000,000
    1,250 ÷
    --------------------------
    21,190,400,000 USD

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    all that bold color is a nice touch JP !
    "Political Correctness is a doctrine, fostered by a delusional illogical minority and rabidly promoted by an unscrupulous mainstream media, which holds forth the proposition that it is entirely possible to pick up a turd by the clean end."
    "it just may be a lunatic you're looking for" -- Billy Joel

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    Quote Originally Posted by Ialdoboath View Post
    Seems this artcle kinda goes with yours Rock. "Stability" seems to be the new IMF buzzword.

    Gulf oil producers should keep dollar-peg, says IMF

    (MENAFN - Times of Oman) DUBAI — The International Monetary Fund said Gulf oil producers, including Saudi Arabia and the United Arab Emirates, should keep their currencies fixed to the dollar and will not come under pressure to revalue.

    "A fixed exchange rate is best for these oil producers," Mohsin Khan, the IMF's director for the Middle East and Central Asia, said in a telephone interview from Washington on Monday. "Their main export is priced in dollars, it makes it easier for them to hedge."

    Soaring oil exports and not undervalued currencies have fuelled the region's current account surplus, Khan said. It is hard to tell if their currencies are misaligned, he added.

    The comments come a week after Morgan Stanley said Middle East oil producers might face pressure to revalue their currencies to narrow the surpluses. China has been the main focus of criticism from the IMF and US for keeping the yuan undervalued to spur exports, though oil exporters have a collective current account surplus of 25.5 per cent of gross domestic product, compared with 9.5 per cent in China, Morgan Stanley analyst Serhan Cevik said in the note.

    "The analytical framework for deciding on fundamental misalignment for oil producers is lacking, because some of these countries are running surpluses through no fault of their own," Khan said on Monday.

    The IMF last month said it will require its 185 member countries to reject practices that create instability for other nations, such as "currency misalignment."

    Now ! Thats the kinda of article I was waiting for.I was worried that iraq would keep the exchange rate low due to the fact they are or will be a big exporter like china and vietnam is doing right now.Its good news to see an article that states this will not be allowed.

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    oh , you were quoting Rock, I see , your post is in black & white
    "Political Correctness is a doctrine, fostered by a delusional illogical minority and rabidly promoted by an unscrupulous mainstream media, which holds forth the proposition that it is entirely possible to pick up a turd by the clean end."
    "it just may be a lunatic you're looking for" -- Billy Joel

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    Can you SME-LLLLLLL what Darock is cooking??? Smells like money to me!!! Good article, thanks Rocky. Hopefully it'll happen soon.
    If you want something in life, you gotta make it happen!!!

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    Quote Originally Posted by Wolverine View Post
    oh , you were quoting Rock, I see , your post is in black & white

    :lmao: :lmao: :lmao:
    If you want something in life, you gotta make it happen!!!

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    So if we divide the known reserve by the known M2 (whatever that is atm) we would then have the USD backing atm, yes?

    Reserve / M2 would give us a ratio of USD to NID currently held. Divide the NID# by the USD# would give us the current % backing for the dinar, would it not?

    Or am I too far out of hight school business math to remember all this right?

    Quote Originally Posted by JPmonopoly View Post

    As of 14-June Gross Foreign Assets of CBI

    26,488
    26,488,000,000,000
    1,250 ÷
    --------------------------
    21,190,400,000 USD
    "Human beings make life so interesting. Do you know that in a universe full of wonders they have managed to invent boredom?" ~spoken by Death, in The HogFather

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    Quote Originally Posted by Wolverine View Post
    oh , you were quoting Rock, I see , your post is in black & white
    you got it, I sure wish the CBI would hurry up
    and update the key financials. I see the Feb M2
    has been changed back to preliminary figures and
    preliminary currency in circulation for May 24 has
    jumped to 19.5 Trillion from 18.8 May 17th.

    Just an observation

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    Quote Originally Posted by Ialdoboath View Post
    So if we divide the known reserve by the known M2 (whatever that is atm) we would then have the USD backing atm, yes?

    Reserve / M2 would give us a ratio of USD to NID currently held. Divide the NID# by the USD# would give us the current % backing for the dinar, would it not?

    Or am I too far out of hight school business math to remember all this right?
    problem is the last known final M2 is from Jan at 18.3 Trill so its
    a bit difficult to use this 23 Billion figure from the article, but if we
    do

    18,300,000,000,000 Jan M2
    23,000,000,000 ÷ July Reserves
    --------------------------
    795 to 1

    Im assuming the M2 is closer to 24 Trillion now

    24,000,000,000,000 July M2 estimate
    23,000,000,000 ÷
    --------------------------
    1,043 to 1

  14. #14
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    That looks decidedly un-good for a reval to anywhere near a penny, let alone more.


    Quote Originally Posted by JPmonopoly View Post
    problem is the last known final M2 is from Jan at 18.3 Trill so its
    a bit difficult to use this 23 Billion figure from the article, but if we
    do

    18,300,000,000,000 Jan M2
    23,000,000,000 ÷ July Reserves
    --------------------------
    795 to 1

    Im assuming the M2 is closer to 24 Trillion now

    24,000,000,000,000 July M2 estimate
    23,000,000,000 ÷
    --------------------------
    1,043 to 1
    "Human beings make life so interesting. Do you know that in a universe full of wonders they have managed to invent boredom?" ~spoken by Death, in The HogFather

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    man, talk about backin' off a nickel !
    "Political Correctness is a doctrine, fostered by a delusional illogical minority and rabidly promoted by an unscrupulous mainstream media, which holds forth the proposition that it is entirely possible to pick up a turd by the clean end."
    "it just may be a lunatic you're looking for" -- Billy Joel

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    invisable me
    invisable me

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    Quote Originally Posted by imluvinit View Post
    invisable me
    invisable me
    you tripped me !
    "Political Correctness is a doctrine, fostered by a delusional illogical minority and rabidly promoted by an unscrupulous mainstream media, which holds forth the proposition that it is entirely possible to pick up a turd by the clean end."
    "it just may be a lunatic you're looking for" -- Billy Joel

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    Quote Originally Posted by Wolverine View Post
    you tripped me !
    :lmao: :lmao: :lmao:

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    Quote Originally Posted by Wolverine View Post
    you tripped me !
    well watch where you are going next time :D

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    you & convenience stores.....invisible .......imagine that !
    "Political Correctness is a doctrine, fostered by a delusional illogical minority and rabidly promoted by an unscrupulous mainstream media, which holds forth the proposition that it is entirely possible to pick up a turd by the clean end."
    "it just may be a lunatic you're looking for" -- Billy Joel

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