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Saturday, May 13, 2017

DINAR IRAQ & DONG VIETNAM UPDATE, 13 MAY

Article: "International Development Bank (IDB) is granted a membership license to MasterCard International"
Quote: "The International Development Bank (IDB) on Thursday held the signing ceremony for the contract for the granting of a basic membership license to MasterCard International in Baghdad."
It certainly is a huge step in the direction of a nation trying to make great strides in their economy. It would also be nice when electricity is running 24/7 to keep those ATMs on.
Article: "Iraq presents the settlement of compensation and debt-for-Kuwait Investment"
Quote: "the ministry has held discussions with the deputy US ambassador to Iraq and his accompanying delegation mechanisms to complete readiness credit program with the International Monetary Fund," stressing "the ministry's readiness to complete the second review of the program to prepare the credit with the Fund meetings international Monetary. "
"The meeting also discussed compensation with the State of Kuwait and ways to file settled through investment window inside Iraq."
This will need to be completed before we will see any monetary reform begin. The good news is it sounds like they are close or have a deal.
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Iraq is doing what is asked of them by the IMF and WB (though 3-6 months late) to prepare the banking system for international integration with the financial system.
Iraq needed to make these changes, along with several others (including reducing the spread) to set the stage for acceptance into IMF Article VIII. Remember the goal here as stated in the SBA is to accept Article VIII to "create a favorable business climate" for investment.
Accepting Article VIII will give freedom of movement of capital in and out of Iraq (so investors can get profits out), make the dinar convertible worldwide through the banking system, and most importantly allow the CBI to stop the daily auctions and let the market and world set the value for the dinar (they will stop the peg). This is all about creating the conditions for a market economy.
"Economists then wonder the government's insistence on the use of "penny" cash as a unit" They are not saying the fils or lower denominations are out in circulation. They are talking about the proposed future currency, the new lower denominations.
It is obvious they are NOT in favour of the penny since they have not had the penny for over 30 years [since the 1980’s] and the newer generation does not know anything about it or how to use it. So the CBI must be training the citizens on what to expect shortly.

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