| Please add updates@feedmyinbox.com to your address book to make sure you receive these messages in the future. | |
|
| Please add updates@feedmyinbox.com to your address book to make sure you receive these messages in the future. | |
| Body of possible UK hostage handed over in Iraq
September 2, 2009 at 2:55 pm
|
| A body that may be that of a Briton taken hostage in Iraq two years ago has been handed over to Iraqi authorities, British Foreign Secretary David Miliband announced Wednesday. |
| Saudis detail attempted assassination
September 2, 2009 at 2:42 pm
|
| Saudi Arabia's Interior Ministry has identified the suicide bomber who attempted to assassinate the country's assistant interior minister last Thursday and released details of a phone conversation between the two men prior to the attack. |
| Dead Iran detainee's father satisfied
September 1, 2009 at 10:44 pm
|
| The father of a detainee beaten to death in an Iranian prison says he's satisfied with the way the Islamic government has handled the case -- even as it serves as proof imprisoned protesters were abused. | | | 
| Please add updates@feedmyinbox.com to your address book to make sure you receive these messages in the future. | |
| New 40,000 BPd refinery opens in Kurdistan
September 1, 2009 at 10:25 pm
|
| More good news on the Iraqi front. Kurdistan is the northern region in Iraq, home of the Kurds, that has huge untapped resources. The area is plagued with political upsets on a constant basis that have been largely responsible for the lack of progress recently. As seen on blackhillsportal: Iraq’s largely autonomous Kurdistan region opened a new oil refinery on Saturday, with a projected capacity of 40,000 barrels per day (bpd), the director of the group that built the refinery said. The refinery near the Kurdish capital Arbil is run by private Kurdish group Kar, which will process crude from the Khurmala Dome oilfield, its director Baz Karim told Reuters. “The (Kurdistan Regional Government) will pay us for what the refinery produces. Our capacity is now 20,000 bpd but it will be 40,000 bpd by the end of the year,” Karim said. As well as producing gasoline for cars, the refinery will make kerosene, heavy fuel oil, diesel, paraffin and airplane fuel, Karim said. The northern Kurdistan region, hoping to quickly develop its oil and gas sector, is entrenched in a long-running feud with the central government in Baghdad over energy contracts Kurds have signed unilaterally with foreign firms and which Baghdad deems illegal. Last November, Oil Minister Hussain al-Shahristani said that development of Khurmala to supply refining in Kurdistan was a priority. The Oil Ministry was not immediately available for comment on the Arbil refinery opening.
| | |  |
|
There is currently no factual information leading us to believe that there will be a reval or a lop with the Iraqi Dinar. IMO, It would be more feasible to set a goal to increase the value by a certain percentage on a steady basis rather than wake up one day and find the value had gone from $1.00 USD = $0.0085 NID to$1.00 USD = $3.50 NID...
The following article found on Zawya is fabricated hype which was published by one of its paying members. This article is purely based on speculation rather than the facts. The facts I am interested in are provided either by The IMF or Central Bank of Iraq. This article has absolutely no value. This article is purely creating nothing but hype... "The Central Bank of Iraq Central Bank of Iraq Central Bank of IraqCBI Iraq | Financial Services News | Profile | Officers » Researchhas taken steps to rebase the Iraqi dinar and issue new banknotes, a senior official at the bank said Tuesday. "We have reached a conclusion that we should take off three zeroes from the current Iraqi dinar banknotes," Mudher Qasim, the bank's senior advisor, told Dow Jones Newswires in an exclusive interview. "The process is progressing and we have taken some steps," Qasim said. "We will issue a decision in due time." Qasim didn't give a timeframe when that decision would be taken, but said printing new banknotes and fully replacing old notes would take two years from the time the decision is taken. Iraqi Finance Minister Bayan Jabor said his ministry had suggested to the central bank to take off three zeroes from the current Iraqi dinar banknotes. "The Central Bank Governor (Sinan Al-Shabibi) has informed me that the bank is in the process of taking that decision," Jabor told the state-run al-Iraqia Satellite Channel Monday. "The Central Bank of Iraq Central Bank of Iraq Central Bank of IraqCBI Iraq | Financial Services News | Profile | Officers » Researchsupports what the finance minister was saying," Qasim said. If the rebase decision is taken, it means a current 25,000 Iraqi dinar banknote will become IQD25, for example. Tuesday, the Iraqi dinar traded at IQD1,200 against the dollar, according to a trader in Baghdad. When three zeroes are knocked off the Iraqi dinar, a dollar will equal only 1.20 dinars. Currency rebasings are usually monetarily neutral and are introduced to make commercial calculations and cash dealing easier and cheaper. Turkey knocked six zeroes off its lira currency Jan 1, 2005, for example. Russia did the same for its currency. "In a country like Iraq where cash consists 80% of money dealing, we need smaller bank notes," Qasim said, adding that current Iraqi banknotes were difficult to store and need strict security measures when moving money from one place to another. There are now some 20 trillion Iraqi dinar banknotes in use in the market, which is a very big amount and if Iraq knocked 3 zeroes it would become IQD20 billion which is a reasonable amount, he said. Qasim also said one of the reasons for rebasing the Iraqi dinar is because the bank has managed to reduce the country's high rates of inflation. The inflation rate fell to 14.7% in May this year from a record high of 60% in late 2006. In July 2004, the now dissolved U.S. civilian authority in Iraq decided to print the current Iraqi banknotes replacing those used to bear the picture of the former Iraqi leader Saddam Hussein. Iraqis then had three months to swap their old dinars with the new ones. "This time we aren't in hurry, if it takes two years to swap the new currency with the old one, then let it so," Qasim said. The current banknotes were printed by Britain's De La Rue Plc (DLAR.L), the world's biggest commercial printer of bank notes. Jabor said in November last year that the central bank would rebase the dinar in early 2008. -By Hassan Hafidh; Dow Jones Newswires; + 962 799 831 831; hassan.hafidh@dowjones.com (END) Dow Jones Newswires 19-08-08 0720GMT "Also, I tried to verify the above sources without success... Nothing but speculation...
Aswat Al Iraq - [ 7/29/2009] The Iraqi Stock Exchange (ISX) on Tuesday said that the Bank of Baghdad will join its electronic trading sessions as of this Thursday, brining up the number of electronically registered companies to 47 out of a total 91. The ISX witnessed the first e-trading session on April 19 over five registered companies, three banks and two hotels. The banks are the Ashur International Bank (AIB), Al-Mansour Bank and the Iraqi Credit Bank while the hotels are the Ashtar Hotel and Al-Mansour Hotel. On June 7, the Iraqi Middle East Investment Bank and the Warka Bank joined the electronic trading sessions. The ISX now holds three electronic sessions on a weekly basis: on Sundays, Tuesdays and Thursdays.
| Reuters - [7/30/2009]
|
| Japan Petroleum Exploration Co (Japex) (1662.T) has entered negotiations with Iraqi authorities to develop a giant oilfield in the Middle Eastern country, the Nikkei business daily said on Thursday.
The company has its sights set on the East Baghdad field, located outside Iraq's capital, the newspaper said without citing sources.
Japex has proposed developing the southern portion of the field, with initial output forecast at 400,000 barrels a day, enough to satisfy about 10 percent of Japanese demand, the newspaper said.
It also said that rival companies are expected to submit bids as well.
A Japex spokesman declined to comment on the report.
The Iraqi government invited foreign firms to join an auction last month for contracts to develop eight oil and gas fields.
Japex, whose joint bid with Chinese majors and others had failed earlier, will aim to secure big contracts through one-to-one negotiations with Iraqi authorities, the Nikkei said.
The newspaper also said Nippon Oil Corp (5001.T), Inpex Corp (1605.T) and JGC Corp (1963.T) are jointly vying with Italy's Eni SpA for a contract to develop the Nassiriyah oil field in southern Iraq. |
If this notice has been in circulation for the last few months on bases all over Iraq...
EFFECTIVE OCTOBER 2009 WHO: ALL CUSTOMERS dealing with Finance Offices in Theater
WHAT: - Removal of US currency
- Increased use of Iraqi Dinar and EFT payments
- AII checks cashed will be loaded on to an ECC
- You WILL NOT be able to withdraw US Dollars from your ECC
- You are able to withdraw Iraqi Dinar from your ECC at the daily exchange rate.
WHEN: 1 OCTOBER 2009
WHERE: Victory Base Complex (VBC) and OIF Theater
WHY: The U,S. Dollar is being phased out of the theater This will facilitate a decrease in the dependency of the U.S. Dollar, and to encourage Iraqi Financial Institutions to expand and mature into reliable resources for the Iraqi people.
The question is... What about all the Iraqi Dinar which returns home with the troops? Is it a souvenir? Or will they be able to trade it in for their own currency someplace other than Iraq? The rumors are flying. In my own opinion, I feel that a RV will be announced in the next few months, and that the Iraqi Dinar will be open to International Trade.
I have 2,500,000 New Iraqi Dinar and I am just tired of waiting for something to happen. Any offers?
The week of July 13th, 2009 launched a milestone for the Central Bank of Iraq. The mystery as to why their website had not been updated in months, has finally been put to rest. Today the CBI has launched their new website, which is very content and user friendly. Visit it here http://cbi.iqPost your comments about it HERE.
Multi-National Division Baghdad   Story by Staff Sgt. Mark Burrell Date: 07.16.2009 Posted: 07.16.2009 05:41  BAGHDAD – "Can I get fifty bucks in Iraqi dinar?" That may sound like an odd request from an American Soldier at a finance office in Baghdad, but in the next few months it will be as natural as buying DVDs or energy drinks from the Iraqi shops here.
However, the Army and Air Force Exchange Services run shops and the military postal services will still only accept U.S. dollars, explained Maj. Timothy Lancaster, the commander of the 208th Finance Company, 10th Sustainment Brigade Troops Battalion.
"The goal is to migrate from using primarily U.S. dollars to primarily Iraqi dinar by, Oct. 1," said Lancaster. He stressed that October isn't a deadline, but a reasonable goal.
Lancaster, from Mannheim, Germany, is in charge of six finance detachments from all over the world that support finance in Multi-National Division – Baghdad.
"Iraq is their own country and sovereign," Lancaster added. "Their currency is the Iraqi dinar, so we need to respect that and start adopting what we can to support them."
As coalition forces have left the cities and Iraqi security forces have taken over security, Army finance is trying to transition the economy back to the shoulders of Iraqis using the dinar to lessen CF visibility here, according to Lancaster.
"The advantage of switching over is we inject their economy and that makes the dinar stronger," said Capt. Jason Hempstead, the 828th Financial Management Detachment commander, 208th Financial Company. The Pennsylvania National Guard Soldiers from the 828th run the Camp Liberty Finance Office.
"It helps us accomplish our mission and it helps Iraqis become more economically stable," added Hempstead, who hails from, Richmond, Va.
In theory, the goal to lessen the CF footprint, help stabilize the Iraqi economy and spend more local currency in markets in Baghdad should be easy, but that isn't the case, said Lancaster.
"The switch from the dollar to the dinar has been harder than expected because it's been so ingrained in Iraqi vendors," explained Lancaster. "Vendors are so used to seeing cash and U.S. dollars, there has to be a mental shift."
That shift is already starting to take place around bases in Baghdad as more and more local shop owners don't bat an eye when asked if they take dinar, said Lancaster.
"It shouldn't be a problem, the vendors usually accept local currency," added Hempstead.
Though many Soldiers come in to request money from their Eagle Cash card, the need for U.S. currency is mostly coming from paying agents that pay their contractors, added Hempstead.
"We issued about four million U.S. dollars from this office last month," said 1st Lt. Donald Warren, a disbursing agent from, Indiana, Pa., assigned to the 828th Financial Management Detachment. "But for every day operations, we have both types of currency to fulfill the need for the mission."
In the market, the price of the Iraqi dinar fluctuates daily, but for the past seven months the military exchange rate has held at 1,170 Iraqi dinars to one U.S. dollar, explained Lancaster. Differences in on base and off base exchange rates can lead to black market currency prices and fear of counterfeit currency coming into circulation.
"We have guaranteed currency from trusted sources, like the National Bank of Iraq, so it's safe to get your dinar from our finance offices," said Lancaster. There are also security measures that Lancaster's offices take that check for watermarks among other things.
Using the dinar will also cut out steep costs of transitioning cash from the United States to Iraq with Soldiers carrying it every step of the way, added Lancaster.
"Is it a simple flip of a switch? No, it really isn't," said Lancaster. "We will always be here for the Soldiers, but we want the banks here to do the banking for the Iraqis."
As word spreads and more Soldiers start to take advantage of the dinar, the easier it will be to transition out of Iraq when the time comes, the easier it will be to get a better deal on those DVDs and energy drinks at the markets.
This is how I got started with the Iraqi Dinar. Back when the war started I saw some TV show, maybe Oprah..., saying how there are a lot of troops fighting for our freedoms who do not have family or friends. That there is a website to join which puts you in contact with troops in Iraq, kinda like a pen pal. I thought that would be interesting so I went online and became a member. Quickly I started receiving emails from all different troops just looking to talk to someone back home. I wrote many letters back and forth. Over time I became friends with some troops. I would send over care packages from items back home, and they would send me cool trinkets from Iraq. Not once did I think about getting involved with the Iraqi Dinar, until one day I received a letter from one of my pals. This letter contained a really cool postcard, which I may scan and post later, some photos and a crisp 25000 Dinar note. Even though it was worth anything at the time, I thought it was the coolest thing since sliced bread. Over the next few months I would send US cash to the troops and they would send me more and more new Iraqi Dinar. Over the years I have accumulated millions in Dinars, I have financially supported a bunch of troops, and in return I have made some solid friends which I still talk to 6 years later. I even had 1 marine who moved into my apartment complex and is now working as a Palm Beach County Sheriff. So this is what go me started on this hobby. Over the years I have hoped that this will help me financially... Well, looking at the world as it is... All the debt countries are in... All the companies that took things for granted are going belly up... Currently I have a good job. I am working on starting a computer business. I have a fiancee. I have so many things to be grateful for. Not so much as making millions off the Iraqi Dinar, I wish the world would straighten itself out. I wish the world would get rid of all the negativity. I wish the worlds politicians who are only out for their own gain would get whats coming to them. All I want now is to be happy. In fact I am happy. I have seen so many videos and photos of all the people who are suffering in Iraq because their money isn't worth shit, and the people have to work like slaves just to get bread and water... Whatever happened to a Utopian society? Whatever happened to trading services for goods and vice versa... I look at the current times as a cleansing period. With GM going under... why should we have to pay $50000 for a vehicle which only takes $10000 to produce? Why??? I just had enough. I thought a democratic society is a society for the people by the people?? If so, then why don't we vote on where our tax dollars go? I don't want to own 3.17 shares of GM. I don't even drive a GM vehicle... Why so many levels of government? Why can't I start a lottery? Why can't I start a casino? Why so many friggin laws? Why are the laws so confusing? I hope Obama can assist on cleaning up this mess... to be continued later on...
This is a good sign... The exchange rate had moved from 1170 to 1165.50. The current information on the CBI.iq site has not been updated yet. They schedule their site updates every quarter. This should be visible within the next month or two. Until this happens check this out...
Exchange rate 1 usd = 1167.50 nid
I have a feeling that the inflation rate is going to start decreasing as the value of the dinar starts to increase... What are your thoughts?
I have a feeling that the inflation rate is going to start decreasing as the value of the dinar starts to increase... What are your thoughts?
Akeel Jawad, seven, left, and Alaa Abass, ... AP - da 6 ore 15 minuti
Akeel Jawad, seven, left, and Alaa Abass, 11, count cans collected from the streets of Baghdad, Iraq, Monday, Jan. 19, 2009. The two start their day at 4 AM, collecting cans to redeem to help their families to make ends meet. They earn 2-3 Iraqi dinar, about 2- 2.5 US dollars a day. Jawad's father, who suffers from post-traumatic stress, is unable to support the family. Alaa's father was killed by sectarian violence in 2008. (AP Photo/Karim Kadim) This is from: http://it.notizie.yahoo.com/foto/galleria/foto-guerra.html?imageUrl=/ap/20090119/r_p_ap_wl_iraq/pwl-aptopix-iraq-poverty-28-6e860357cdbb&sp=-1Photo number 24 I just thought it was interesting how it says 2-3 Iraqi Dinar, about 2-2.5 US dollars...
January 07, 2009 The Consultant at the Iraqi central bank, Mudhir Mohamed Saleh, said that the bank's policy in its auction for the sale of foreign currencies, focus on stabilizing the exchange rate and strengthen the Iraqi dinar against the dollar, to face inflationary pressures which in our view that the exchange rate the most important. It is the policy of the central bank to raise the value of dinar gradually. The average daily demand increased last week at 163.8 million dollars, which is higher than the highest rates achieved in the last period, as the third quarter of this year, the rate of 150 million dollars at each session. The Central Bank of Iraq reduced the interest rate to 14 percent rather than 15 percent. Source(Azaman) Back to Iraqi News & Iraqi dinar Updates http://www.edinarfinancial.net/news/?quer=&nm=&ny=&nn=567
| Printed from the XE Universal Currency Converter at: www.xe.com/ucc
| | Live rates at 2009.01.06 14:44:35 UTC | 1.00 USD | = | 1,140.60 IQD | | United States Dollars |
| Iraq Dinars | | 1 USD = 1,140.60 IQD |
| 1 IQD = 0.000876732 USD | |
| |  | | Being the Governor of the Central Bank of Iraq is quite possibly the single most challenging job for a Central Banker anywhere in the world. To reduce inflation and keep a currency stable, while operating in one of the most violent wars in modern times, is a phenomenal feat of economic, and possibly psychological, prowess. In an exclusive interview in Baghdad, Dr Sinan Al-Shibibi told Mike Gallagher what it takes to turn a ruined economy around, while living with the daily death and destruction which nearly brought Iraq to its knees | |
Dr Sinan Al-Shibibi is the Governor of the Central Bank of Iraq and has been at the helm of one of the world’s most challenging banking positions since he took up his post in June 2003. Dr Shibibi walked into a shell of a Central Bank which technically only existed on paper because it had been comprehensively looted, first by members of Saddam Hussein’s government in what is widely considered to be the world’s biggest ever armed robbery when the regime’s members absconded with an estimated $1 billion, and latterly when it was again looted and then razed in subsequent bombings by insurgents. Dr Shibibi began his career as Head of the Importation and Marketing section of Iraq’s Ministry of Oil in 1975, before moving to the Ministry of Planning as Chief of the Plan Preparation and Co-ordination Division two years later. In 1980 he moved to Geneva to join the United Nations Conference on Trade and Development (UNCTAD), and he remained there until his retirement as a Senior Economist in 2001, when he left to become a consultant on trade, debt and finance. During his time at UNCTAD in Geneva, Dr Shibibi managed projects on the implementation of policy, analytical and the institutional aspects of debt management, including the implementation of UNCTAD’s Debt Management and Financial Analysis System (DMFAS) in several Arab countries. Dr Shibibi has also undertaken extensive research on financial flows, the economics of disarmament, balance of payments, external debt, globalisation, and the Iraqi economy. He graduated from the University of Bristol, England, with a Ph.D. in Economics and has published several research papers on a number of subjects, including ‘Globalisation of Finance: Implications for macroeconomic policies and debt management’ in 2001 and prophetically, a paper titled, ‘Prospects for the Iraqi Economy: Facing the new reality’ in 1997. The paper was published in a book with the same title in November 1997 and reprinted by the UNCTAD secretariat. It dealt with the effects of sanctions, debt, and war reparations on the then future prospects of the Iraqi economy. The security situation in Iraq has improved dramatically and investors are showing renewed interest in the oil-rich country, while the brain drain is showing signs of a reverse. Iraq is open for business and a number of Middle Eastern banks, such as NBK, Ahli United Bank and Burgan Bank have already gained a foothold there. Are you going to start offering banking licences?
There have been applications for banking licences and we have been considering their merits. The banking sector in Iraq still faces a lot of challenges and there needs to be a lot of improvement in Iraq’s banking sector. There needs to be consolidation. There also needs to be a change in the structure of the banking environment because there are a lot of family-owned banks around. Iraq’s banks need to be more ambitious and that means they will need to take chances and it will require a greater willingness on their part to compete with other local and international banks. The banks will need some sort of deliberate encouragement from the public sector, as well as from the government, such as allowing them to issue letters of credit for state-owned enterprises. Many people were thinking that, because of our policy of combating inflation, the Central Bank of Iraq was offering high interest rates for banks to get them to come and leave their funds there, instead of going out into the market and looking for better deals. Some would say that they were acting in this manner because of the security situation, although it is something I do not believe. If a foreign bank was interested in entering Iraq, what would it have to do? What would the Central Bank of Iraq be offering by way of guidance or advice? What would you say to them?
By law there can only be six banks with majority foreign ownership in Iraq, although that article is due to expire on 31 December 2008. What they are facing after that is a requirement that they put up a minimum of IQD 50 billion ($43 million) in paid-in capital, so they really have to put their money upfront. They have to prove that they are serious about being banks and not just coming to Iraq to be investment houses. Is there more room for banks in Iraq?
I would think so. We would welcome foreign banks if they came to Iraq, but they would have to come with the intention of offering something concrete for the banking system in Iraq. We can’t have foreign banks operating by remote control. We can’t have remote-controlled ownership. They need to have an active presence on the ground and work with the people, face to face and try to offer them something realistic by way of banking services and products. They need to open a branch and be competitive with other banks in what they are offering customers. Of course security is a problem, but we will cooperate with them in suggesting security arrangements. The real economy is going to develop and there are going to be enormous opportunities, so I think it is vital that they come early and establish a presence and cooperate with the private sector by offering them competitive products and services. What about Islamic finance?
We have a few banks which have been founded on Islamic principles, but we are still in the process of developing the regulation in that respect. I don’t want to hide the fact that potential demand is high, and probably more so after the credit crisis, because some people are beginning to think that Islamic finance will not be as affected by the global downturn as conventional finance because it relates to the real economy. We will have to see if that is the case, but we have a few banks and they are working. We have a regulatory framework in place, but I think it still needs to be made clearer. What do you see being the challenges in 2009 for banking in Iraq?
We still have plenty of challenges ahead of us. We are hoping to increase our dealings with banks from outside Iraq and we will need to re-examine our programmes with international financial organisations like the International Monetary Fund (IMF). We have been working under an IMF programme which is going to conclude at the end of the year, whereby we will have completed the 80 per cent of debt reduction that was agreed under the plan. We will probably have to establish new relationships with local banks. I do not want to foresee any new arrangements with the IMF because this is something that still needs to be debated, but we are definitely going to have increased dealings with institutes like the Bank of International Settlements and we already have a lot of regional cooperation. The most important thing is going to be getting some help in our efforts to provide the local banks with information about how the credit crisis might impact upon them. I know we are not affected directly by the credit crisis, nor do we want to be affected by it. I really want to concentrate on getting the banks to be more ambitious. I will make a special effort on that and it will be part of what we will be looking at when we evaluate the performance of the banking sector. Will 2009 be the year when Iraq’s banks show their true potential?
One thing that stands out about banks in Iraq is that their loan portfolios do not exceed their aggregate capital and from a regulatory standpoint, without other legal infrastructure that mitigates risk, this kind of conservative banking is not a bad thing. The total assets of the private banks have grown by 90 per cent since 1 January 2007, which is a strong sign of the confidence that the public places in local banks. Deposits have grown by 70 per cent, but the loans and capital have each only grown by 60 per cent during the same period and they continue to remain at that level. It means that every single loan in the banking system could fail and they would still have assets to cover the depositors. I want the banks to move more into the productive sector and contribute to the real banking environment, rather than continually come to the Central Bank to deposit their funds and try to make money off the interest. That is why I think 2009 is going to be very important – it is going to be the year of financial intermediation. The banks are going to have to do something with the deposits that they take. If they take deposits, then they have to be prepared to lend to customers and this is the issue. I think there should be some deliberate policy to encourage them to get their hands on some of the business from both the private and public sector. Right now, although it is not a legal requirement, state-owned enterprises and private businesses tend to use Trade Bank of Iraq for any letters of credit. State-owned enterprises should be free to do business with private banks. This is a policy which we explicitly advocate, even through letters and circulars, that communication between government enterprises and private banks should be direct. What were the biggest challenges you faced when you took up your post as the Governor of the Central Bank of Iraq in 2003? Well, first off, there was no functioning Central Bank building because it had been destroyed and looted before and shortly after the invasion. Given that the economy was largely cash-based, getting a currency exchange up and running was an important undertaking and something we quickly went to work on setting up. We had a brief period of grace shortly after the fall of the government of Saddam Hussein and before the violence began to escalate in the spring of 2004, which we used to our advantage to get things up and running. Getting that done was vital because it helped to restore confidence in the monetary system at a time when confidence was fragile. The immediate introduction of a new Central Bank law by the then governing Coalition Provisional Authority was helpful because it was geared towards market-based reforms. It was very different from what we used to have and we needed not only the staff to go with that, but what was equally important was having the right mentality at a political level to go with such dramatic changes to the banking system. Pulling that off required a lot of coordination between the likes of the Central Bank and the Ministry of Finance and other parts of the government, especially because it meant having such laws included in the draft of the new constitution for Iraq which was being drawn up at the time. Was the establishment of a functional banking framework the first major challenge?
Opening up is not easy, but we knew that in order to get things done, we had to be prepared to talk to a lot of organisations and banks about new ideas and skillsets. However, the deteriorating security situation scared off a lot of international banks and financial institutions. Getting them to come to Iraq was obviously very difficult. Despite that, we have managed to establish and maintain those relationships which helped to establish what might be called the bank’s framework. Managing to integrate with the rest of the world, especially at an economic level went very well. The staff of the Central Bank of Iraq are incredibly hard workers. They frequently came in on weekends and regularly worked late into the night, despite the security situation over the past few years. What would you say were the early successes?
Creating a functioning system for the foreign currency auction was one notable success, as was managing to restructure the obligations of the Ministry of Finance towards the Central Bank. The reserve requirement is now prudently regulated. We managed to not only develop monetary policy, but also managed to begin executing it and enforcing it. We also had to explain to the government what the Central Bank was and what it did. Now we have a Central Bank which is respected for doing what it is supposed to do, such as maintaining price stability. In five years, the Central Bank of Iraq has gone from being the arm of a totalitarian regime (under Saddam Hussein) to one that is respected by all the major global financial institutions. Sorting out the debt reduction with the IMF and managing to reduce it by 80 per cent was another major achievement and we should have reduced the final tranche by the end of 2008. This was something which we negotiated in, I think, November 2004, and in which Adil Abdul Mahdi, the Vice-President of Iraq, was a key figure. Thanks to his leadership, we managed to get a debt reduction of 80 per cent and I think it is the biggest debt reduction of its kind for a middle income developing country. Is the independence of the Central Bank of Iraq a key aspect of this success?
We have worked hard to coordinate with the government and to explain to them the benefits of having an independent Central Bank. This independence is, I would say, good for the government itself, although I would prefer to refrain from using the word ‘independence,’ it does allow us to maintain price stability and that is good for the government. We achieve stability, but it is also an achievement for the government. The important point is that the Central Bank is always in discussion with the government. Before this it would have been the government which would have been making all the decisions and the Central Bank would have had to follow on from there. There is discussion - it is not one-sided. The government comes to us with any questions they have, not just on monetary policy, but also economic factors, such as the availability of the dollar and auction and exchange rates. They don’t just take decisions without coordinating with the Central Bank. Given the amount of change that banking in the Middle East is undergoing, what kinds of discussions are you having with other Middle Eastern Central Banks?
I am in regular discussion with my counterparts throughout the region. We always meet through the Arab Monetary Fund and we are always talking on the phone, especially these days, to discuss a lot of things which are going on in the region and beyond. I think the Central Banks of the Middle East definitely have some challenges now because they are more open than Iraq to the world economy due to the instruments which they employ, which are more related to the kinds of instruments the West uses. Iraq is of course open, but we still do not have things like derivatives and so on. So, yes, we are always in discussion with them, for instance when a bank bailout takes place, but they are doing well so far. We have been discussing the implications of things like bank bailouts. I regularly meet†Arab governors and other governors during the sessions†of the Arab Monetary Fund. Inflation has been a problem throughout the Middle East in the past few years. What has the Central Bank of Iraq been doing in this respect? Core inflation is currently 13.6 per cent and it has stayed within a steady band for quite some time, particularly over the past three months. Inflation has definitely been a challenge over the past year. The issue here is that we are more or less basing our monetary policy on our ability and achievements in combating inflation. Through a programme with various intra governmental organisations, we managed to reduce headline inflation from 64.8 per cent to a headline rate of seven per cent. We actually had minus figures for a while. Was monetary policy the tool you used to check inflation?
I wouldn’t say it is exclusively monetary policy that has brought inflation down; it is a combination of measures. A lot of economists do not believe that monetary policy in this particular situation made a big difference, and instead preferred to look at developments in the real economy. Nevertheless, I believe monetary policy was quite effective. I and a lot of my colleagues who worked in Iraq in the 1960s used to believe that inflation was a natural outcome of development. It is not unusual to have inflation during the development process and people even now think the same. What they do not understand is that inflation destroys any development achievement. There has been a lot of speculation that the Iraqi dinar might be revalued at some point as the economy becomes stronger as a result of increased oil revenue. Is there going to be a revaluation of dinar in the near future?
I always refrain from making any comments on the subject of revaluation. I refrain because everybody will always believe a Central Banker over anyone else on this matter, so I am not going to say anything.
http://www.cpifinancial.net/v2/Magazine.aspx?v=1&aid=1809&cat=BME&in=102
| | |
LONDON (Reuters) - A body was handed over to Iraqi authorities on Wednesday that Iraq believes is one of the British hostages seized in Baghdad in 2007, Foreign Secretary David Miliband said.
CAIRO (AFP) - Turkish Foreign Minister Ahmet Davutoglu said on Wednesday he felt positive about his visits to Syria and Iraq aimed at defusing tensions between the neighbours after Iraqi claims that Damascus was sheltering insurgents.
BAGHDAD (AFP) - A court sentenced four Iraqi security force members to death on Wednesday for Iraq's bloodiest ever bank robbery, in which eight police guards were shot dead and millions of dollars stolen.
Print this article