Central Bank Tracking

[Marilyn]

This was a bit of bad news we found a few weeks ago. It seems there are tidbits of information coming out of The Central Bank. This article seems to be from Feb '04. It discusses the use of an exchange rate of 1500 in their budget for 2004. Please read and comment ...


Price-Waterhouse-Coopers Digest June 2004

"Iraq's Botched Currency Reform," Central Banking 14 (3): 39-45 (February 2004) Steve Hanke and Matt Sekerke (Johns Hopkins University, Baltimore, Maryland, USA)
"...The 2004 budget prepared by the Ministry of Finance and the Ministry of Planning does not rely on debt issuance or the CBI (Central Bank of Iraq]'s printing presses. But the budget is highly sensitive to the dinar exchange rate. The 2004 budget is prepared on the assumption that the dinar exchange rate will be 1500 to the dollar. . . . This is an extremely important assumption, because most of the government's revenues are in dollars, and most expenditures are in dinars...."

http://www.pwc.com/extweb/newcoweb.n...4?OpenDocument

[fsm75]

Tony:

Thanks for bringing me back down to earth. Sometimes during my fantasies my brain fills with helium. LOL

[Psycho for Dinar]

I bought into this with full expectations of having some of the most expensive toilet paper in the midwest. If it even takes twenty years, what the heck....it was a wild ride!!!

[Mr Mike]

Well, I bought my dinar at roughly 1,000 US for a 1,000,000 IQD
Now if it opens up for international trading at a price of 1usd to 1,500iqd, wouldn't it make sense to sell now, and put that money into the ISX. Otherwise when it opens we start at an automatic loss. Any thoughts on this? tia
Mr. Mike

[Blake]

Well, I bought my dinar at roughly 1,000 US for a 1,000,000 IQD
Now if it opens up for international trading at a price of 1usd to 1,500iqd, wouldn't it make sense to sell now, and put that money into the ISX. Otherwise when it opens we start at an automatic loss. Any thoughts on this? tia
Mr. Mike

Who are you going to sell it to right now??

[Marilyn]

Even if Shabibi decides to open it as low as it now, 1460, the market will drive the price up quickly. ..

[Marilyn]

I just wondered if anyone else heard anything about the "18 months" reference...

[highrollr19]

18 month ref? Guess I haven't, or maybe I have, and it just wasn't called that. As for me, I have 3 million which I purchased quite a while back, so for me, the value it is at now (1460) is a profit. I don't mind waiting 5 years. I don't even mind waiting 20. If it doesn't hit during my lifetime, I will just leave it for my kids.

[Jared]

I planned on a 2 year minimum wait time. With little information coming out from the bean-counters, there's not much we can use to forcast with. I rented a safety deposit box for 2 years, when my lease is up, I cash in. (i hope anyhow).

Jared

[Bill in Dc]

to all--
the assumptions upon which said reference--"Iraq's Botched Currency Reform," Central Banking 14 (3): 39-45 (February 2004)--is predicated appear to have changed.

According to The Economist Economic Intelligence Unit (EIU) Country Report Iraq, June 2004 Main Report, the Ministries of Finance and Planning "... made substantial revisions to the 2004 budget ... [and] the changes are positive and reflect assumptions of greater capital inflows."

The EIU cites ascession of funds from the development fund for Iraq (DFI) to the tune of an estimated $5.4 bil ($4.4 bil greater than thought) and what they called "uncommitted funds" from the UN oil for food program to the Iraqi government as the source of these increased capital in-flows.

These comments appear to put the assertions of the February piece at least partially in question. Bottom-line: Yes, the budget was prepared and predicated at 1500NID:$1, but other capital inflows now may have changed the equation somewhat. Sadly, my little pea-brain can only handle so much of this stuff and I will defer to those with more in-depth knowledge of economics to assess the positive or negative aspects of this information!

In the end, though, my brain cells do tell me that with the assumptions no longer being valid, it would be mistaken to place too much credibility in the assertions made in the article!

Oh yeah, sorry, cannot provide link ... the EIU summaries are fee-based ... those that have access can corroborate my input ... others, i'm afraid will have to trust my veracity!

regards,

bill

[allen]

do you think it is possible that since this was written in Feb 04, they didn't expect Iraq to rebound like it has? It has done better than expected, right? Besides now there is more time to buy more Dinar.

[iraqidinar2005]

Mr. Mike and others that are worried...This is my advice to you. If you are already considering selling this early in the game, then I would seriously recommend you not visit this site or watch the exchange rate. Not that you are not welcome, it is for your own benefit. Seriously, if any of you are feeling anxious now, it would be best to put your dinar at the bottom of your fire-proof Sentry safe and forget you even bought them. You will thank me in 5-10 years. If you want to play with the ISX, then set aside other money to do so. Leave your dinar alone until one day five years from now, you see the CCN Money ticker at the bottomm of your TV show that Iraqi dinar is up $.05 to $1.05 and that light bulb goes off in your head...Hey, didn't I buy some of that dinar!?!?! LOL

[minigirl]

Mr. Mike and others that are worried...This is my advice to you. If you are already considering selling this early in the game, then I would seriously recommend you not visit this site or watch the exchange rate. Not that you are not welcome, it is for your own benefit. Seriously, if any of you are feeling anxious now, it would be best to put your dinar at the bottom of your fire-proof Sentry safe and forget you even bought them. You will thank me in 5-10 years. If you want to play with the ISX, then set aside other money to do so. Leave your dinar alone until one day five years from now, you see the CCN Money ticker at the bottomm of your TV show that Iraqi dinar is up $.05 to $1.05 and that light bulb goes off in your head...Hey, didn't I buy some of that dinar!?!?! LOL

I agree that I'm going to sock it away, and use additional funds to play the ISX. But I highly doubt I can forget I bought them - it won't take a CNN ticker to remind me :) I'm way too jazzed. lol I'm not considering selling early - I think we all know we're in it for the long haul with the bulk of the dinar we purchased. I do know I have a certain 'point' where I'd be willing to exchange a SMALL portion of my dinar for USD for immediate financial concerns.... but that's long off as well I'm sure -(see the other post where I referenced my ulcer! lol)

:)

p.s. welcome to the forum!!!! :)