Thursday, November 19, 2015


Article: “Finance Committee: the central bank to issue any financial category offset by the withdrawal of classes 10 and 25 000 dinars” This is very important IMO that we have a directive from the IMF (remove restrictions) so the CBI can get into Article VIII…and the subsequent days after the signing of the MoU we have the CBI issue the 50k note in efforts to strengthen the banking system and create demand (by reducing the physical dinar (10k, 25k) which will reduce the spread. All of which is hoped to be accomplished before mid 2016. Very good news for sure.
Article quote: “the Fund shall provide technical assistance to the Iraqi authorities for the implementation of policies related to foreign currency and the removal of restrictions on him.” The IMF is clearly stating they signed the MoU to help remove the remaining restriction on Iraq from moving to Article VIII…only one restriction remains, and that is the auctions and 2% spread. …the IMF spread or 2% in this case is the difference between the official rate at the CBI and the market rate (street rate) in Iraq…in order for the CBI to be in compliance with the IMF, they must keep that rate within 2%…and the IMF is going to Iraq to help them overcome that issue.
And we know from another IMF article they expect Iraq to enter the market by mid 2016…very very good news…there is clear proof that the IMF will help them get in compliance and move to Article VIII within the next 6 months…the auctions will end…the auctions can only stop when their is an alternative…and the float will also start…as already stated by the US Treasury and the IMF and several Iraqi economists and members of the Finance Committee. …once they move to Article VIII, what happens to the dinar is yet to be determined.

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