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Tuesday, June 5, 2018

Currently the IMF is monitoring the MCP (Multiple Currency Practices) within Iraq, 5 JUNE

Currently the IMF is monitoring the MCP (Multiple Currency Practices) within Iraq. 

The MCP is the difference between the CBI rate and the Market (street) rate. 
The CBI rate is a de facto peg to the US dollar and the street rate is the rate venders or banks can sell the dinar in exchange for dollars or visa versa. 
The monitoring program requires that the difference in these rates not vary more than + or – 2 %. Being able to control the rate of the currency is a requirement to show stability.
So the CBI has to recently adjust the CBI rate since the street rate also dropped. 

This keeps the dinar within this required range for 90 days.
We know that in mid March there was a violation of the 2% rule and so the IMF started the MCP 90 monitoring all over again.
The CBI simply did not want this to happen again and expects to complete the monitoring on time on mid-June.
This is also yet another indicator as to why I am telling you do not expect anything movement in the reinstatement of the dinar until at least past mid June.

This mess with the election fraud may be resolved by some backroom deals or it may come to re-counting and maybe even a re-voting process. We just have wait and see.
We have at least 10 days starting to let the Electoral Commission work with the Judiciary in sorting through the complains and deciding the next step.

So why did the CBI decide to hold it up the project to delete the zeros until after the elections, even though they told us it was all ready and prepared? 

The CBI along with the IMF wanted to first play out the political process of the elections and to make sure that these corrupt officials are eliminated from office and the amendments to the election law are passed in Parliament once and for all.
Iraq needs these laws to keep these crooks out of politics.
It’s all about eliminating the currency manipulation, fraud and the corrupt banking. 

These new elections laws also are very drastic and hurt those that need to vote on them the most. So they need a New Parliament to get them passed. 

They need to weed out all of this corruption.
The CBI need to ensure the success of the currency reform also by not letting this election chaos, that was sure to come, interfere with potential investors in Iraq. 

So if they did RV prior to the elections this would put this chaos during the time period when they need to draw in potential investors the most to the new Iraq dinar. 

It is a simple factor of the much needed, political stability to make the launching of the new dinar successful.

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