Tuesday, December 22, 2015


Article quote: “lifting the US dollar selling to banks and exchange companies rate by 16 dinars any by 1.37 percent to 1182 dinars.”
It seems to me that the CBI is moving in this direction primarily to stall the drop in their reserves, irrespective of any “international standards” that they reference.  In that sense, this is a good move for the short term.
The article also stated that it would give them “6 months” of time.  I don’t think that that means that they will run out of reserves in 6 months.  Instead, it is more likely that they are buying some time to implement the IMF agreement to move to a float.
I therefore conclude that we will see a movement to a new exchange rate regime within 6 months and that this “tweeking” of the rate is an assurance that their financial position will be secure through that time period.

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