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Wednesday, December 5, 2018

DINARLAND UPDATE, 5 DEC

Kirk H. Sowell

So today may be a big day in #Iraq politics, with parliament scheduled to meet...with completing the cabinet of PM Adil Abd al-Mahdi on the agenda. Or maybe it will wimper & fail to make quorum, or just skip the cabinet votes & be nothing.

So they managed quorum after all, with 168 MPs, parliament is meeting. But quorum is 165 so that's a very narrow margin of error if they try to hold a vote, just four could walk out and break quorum.
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RVAlready (TNT)

I think it is a good week for Allaq to push the button. They really need the RV to move forward…So much of what they want to do needs money. The RV will supply that.
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sandyf (Dinar Alert)

...Although what Kap [Guru Kaperoni] says is perfectly valid I would not agree. Floating the currency would not be a normal course of action for an emerging economy. Egypt was pushed into a float and look what happened...I doubt if that is what people want to see. It is not only emerging economies at risk, the Russian Rouble became fully convertible in 2006 but avoided the risk of floating until 2014, again a significant drop in currency value.

...I for one would hope that Iraq does not face similar problems.
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Kaperoni (Dinar Alert)

[And The reason why the IMF is still preventing Iraq to become ARTICLE VIII?]


They are in compliance now but have not had their 2018 Article IV Consultation yet because the government has not been officially formed. Though not a requirement, I do expect this consultation to occur before any move to Article VIII.

...the 2% rule has nothing to do with the choice of float...the 2% rule has to do with stability within Iraq and keeping the dinar exchange rate consistant within the country...the 2% rule is meant to eliminate MCPs within the country...not related at all to the nominal exchange rate of the currency...unfortuately many people do not understand the terminology used by the IMF and others related to monetary policy...an example is MCPs or Multiple Currency Practice...MCP does not mean two currencies or dinar and dollar as some like to say. It means the price of an Item in one part of the country vs the price of the same item in another part.
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David M. Witty

Iraqi Parliament delays vote on unfilled cabinet positions. Iraqi Parliament meeting to approve unfilled cabinet positions ends in chaos & shouting among political blocs.
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Doc.K (KTFA)

[Guru ChrisC...Why does everyone think decimal places equals fils? Using fils at this rate would be ludicrous. If we don't see that decimal point move to the left, I don't get what we are dancing about.]


In order to have parity or an exchange rate with a major currency, they need to change to the same 2 place decimal system to convert. i.e. The USD does not have $1.259 it is only $1.25 or $1.26. This forces them to use a fraction of a dinar ( a fil = the metals) in the market place and INTERNATIONALLY. They are not dealing with WHOLE #s anymore as in $1 usd = 1200 dinars.

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