WOTS TUE JUL 13 21 The project to delete zeros in Iraq is still technically prepared by the Central Bank of Iraq
On today's My FX Buddies Podcast I only discussed one article and it is below.
Confidence in the Iraqi dinar is eroding… and the prospect of removing zeros
Iraq is witnessing a severe financial crisis that began with the outbreak of the Corona virus last year and the decline in global demand for oil, which represents nearly 91% of Iraq’s financial imports.
With the continuation of the financial crisis and the failure to pay the salaries of employees last year, the government resorted to what was called the Iraqi government reform paper (the white paper), which included the devaluation of the Iraqi dinar against the US dollar, and the decision entered into force at the beginning of this year.
With the rise in oil prices globally, the Iraqi government has been thinking about long-term financial strategies that may protect the country from falling into a financial crisis that may be more influential. One of these strategies was put forward by the economic advisor to the Prime Minister, Mazhar Muhammad Salih, and is represented in deleting 3 zeros from the Iraqi currency, Without specifying a date for the implementation of this step.
In every economic equation, the ratio of profit and loss is calculated, which is indicated by the economist Hammam Al-Shamma that this ratio will not be equally present in the equation, warning of psychological disturbances in the Iraqi market in the event of deleting zeros.
In contrast to the losing party, Al-Shammaa believes that the government may derive limited benefits from deleting zeros, which is that the government and the central bank will face fewer problems in the accounting system and final accounts with limited zeros and small accounting numbers.
On Sunday, June 20, 2021, the financial advisor to the Prime Minister, Mazhar Muhammad Salih, set two conditions for deleting 3 zeros from the currency, while stressing that the option to delete is proposed as part of the strategies for reforming the currency and cash payments system in Iraq.
Saleh told the Obelisk, “The Central Bank of Iraq developed a project to delete three zeros from the Iraqi currency in order to reform the cash payments system, which has become burdened with the insomnia of the economic blockade imposed in the nineties of the last century, and put it into research and study long ago, after looking at about 54 An international experience from the end of the Second World War until the second decade of the twenty-first century, which took place in various countries of the world, in which the monetary payment systems were reformed and made to work more efficiently, the last of which was the Islamic Republic of Iran and before that, Turkey.
He added that “the phenomenon of increasing zeros in the monetary unit or adding zeros to a single monetary unit usually comes due to the exposure of economies to unruly waves of inflation or continuous sharp rises for years in the price level due to wars, sieges and conflicts, which lead to financing the deficit of government budgets through cash issuance.” .
And because the price means the value of goods and services expressed in cash, the continuous rise in prices without stopping leads to the erosion of the value of the monetary unit, which requires the issuance of larger monetary categories due to the lack of value of the smaller monetary groups and the disappearance of their ability to cover transactions and exchanges of high monetary value in the market.
He continued, “Accordingly, the monetary value of things or tangible assets and others inflates, and when inflation ends, according to which prices have increased to three decimal places, or more or less, according to the nature of each economy, countries resort to reducing the artificial reproduction in numbers, especially in the numbers of accounts books, budgets and various numbers of tools Accountability, after two conditions are met.
He continued, “The first condition is price stability and global economic growth, and the second is appropriate stability in political life, so the importance of deleting zeros from the currency and slimming currency units as a necessary condition for reducing accounting numbers and facilitating arithmetic handling and the cost of managing new large numbers and the absence of small numbers and fractions, as it is noted that slimming currencies Cash comes because of its role in the sustainability of calculating huge numbers of financial values that are not absorbed by ordinary computers due to the large number of decimal places and the emergence of many accounting errors, especially dealing in trillions, which means that one number in front of it has 12 decimal places.
Saleh believed that “the hyperinflation that hit the Iraqi economy in the nineties of the last century added three numbers to the Iraqi monetary unit (that is, one dinar became equal to a thousand dinars, and ten dinars became ten thousand dinars, and so on for the rest of the categories), while the small categories disappeared from circulation completely, but rather Every 250 fils became equal to 250 dinars, and it was considered the smallest monetary unit in circulation today, which raised the cost of micro-transactions that mostly affect the poor.
He added, “In this way, monetary systems aspire to remove the burden of historical inflation from the folds of the monetary unit by resorting to deleting three zeros from the old currency in order to equalize the new currency with lower numbers but with the same value. Let’s say, for example, that one new dinar is equal to 1000 old dinars without change in value or rights. The accounting books, statistics, numbers and computer systems are also modified with the value of the new currency within an easy and easy reform strategy, and countries consider that slimming the currency system facilitates the circulation of mathematical numbers and helps to issue smaller cash denominations for very small transactions whose monetary values have been destroyed by historical inflation in our country such as the dirham and others.
He concluded by saying, “The project to delete zeros in Iraq is still technically prepared by the Central Bank of Iraq, which is the official sectoral authority and the monetary authority concerned with this matter and in cooperation with all three state agencies and authorities, but the project is postponed at the present time until the appropriate conditions are achieved and remains part of the currency system reform strategies. and cash payments in Iraq.
The dollar exchange rates in the local markets for Tuesday, (July 13, 2021), according to specialists' monitoring.
Baghdad - the stock exchange
147,850
....
The price is in most Baghdad exchanges
Buy
147,250
Sale
148,250
——————————————————
Basra - Bursa
148,000
——————————-
Mosul - Bursa
148,100
———————————
Erbil - Bursa
147,950
———————————
Sulaymaniyah - Bursa
148,000
Favorite Currencies Forex Quotes
| Symbol | Bid | Ask | High | Low | Open | Change | Time |
|---|---|---|---|---|---|---|---|
| USD/IQD |  1458.0000 | 1463.0000 | 1456.7000 | 1456.7000 | 1456.7000 |  -0.2000 | 00:00 |
| USD/VND | 23010.0000 | 23015.0000 | 23000.2000 | 22987.0500 | 22987.0500 | 15.6900 | 04:50 |
| USD/CNY | 6.4659 | 6.4679 | 6.4747 | 6.4621 | 6.4747 | -0.0086 | 05:19 |
| USD/KWD | 0.3002 | 0.3012 | 0.3005 | 0.3004 | 0.3005 | -0.0002 | 05:17 |
| GBP/USD |  1.3851 | 1.3852 | 1.3905 | 1.3849 | 1.3874 | -0.0022 | 05:24 |
| USD/IRR | 42000.0000 | 42210.0000 | 42097.5000 | 42097.5000 | 42097.5000 | 0.0000 | 00:00 |
| USD/IDR | 14470.0000 | 14470.0000 | 14527.0000 | 14437.0000 | 14509.0000 | -38.0000 | 05:21 |
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The Moody American International Foundation for Economic Assessment stated that despite the high oil prices, there will remain challenges facing Iraq's stability represented by the country's absolute dependence on oil with weak institutions in addition to poor management, which will lead to weakness and restriction of the government's ability to face external and internal shocks by relying on the economy It is basically weak .
The International Foundation stated that its assessment took into account Iraq's high rate of political risks and instability resulting from the internal political and social conflict, as well as regional geopolitical tensions, all of which will continue to impede the achievement of institutional and governmental reform, with slow economic growth and the absence of diversification of financial sources .
On the other hand, Moody International Corporation said that implementing the government’s plans to nearly double the oil production capacity in the medium term will support economic growth and enhance Iraq’s financial and external position, but the extent to which this is achieved on the ground will be governed by future expectations of oil demand and price volatility as well as challenges Political instability and mismanagement that undermine investment in the oil and gas sector .
The International Foundation indicated in its report that the weakness of the administration was also manifested in the government's inability to pass the budget throughout 2020, with the fact that Iraq is still classified according to the Transparency Index among the 20 most corrupt countries in the world. The spread of corruption is ultimately one of the biggest institutional challenges for Iraq, which directly affects the nature and effectiveness of the administration and the weakness of the trend towards reform and change .
In the view of Moody's Institute for Economic Evaluation, Iraq's divisive political scene and the risks of political instability in it will continue to impede any progress in the field of economic and institutional reforms. In addition, high oil prices and significantly reduced government spending needs since the end of 2020 have reduced incentives to move forward with reforms .
With regard to the aspirations and opportunities for stability in Iraq, most of the technical discussions that took place so far with the International Monetary Fund, which began in late 2020, refer to the opportunity to introduce a structural adjustment program supported by the Financial Support Facility provided by the International Monetary Fund. Such a program will serve as a reform approach, provide a degree of financial support and support Iraq's credit eligibility .
The report of the International Economic Corporation indicated that the continuing challenges of political and administrative instability in Iraq will continue to undermine investment opportunities and the participation of international oil companies in the expansion and development of the oil and gas sectors, which is necessary to achieve higher production rates in the current oil fields .
In its report, the American establishment states that with a degree of uncertainty about what the outcome of the upcoming elections could lead to, due to the electoral amendment approved by Parliament late last year, it does not expect that the composition of the next parliament will be radically different from the composition of the current parliament, which reduces the the chance of a change concrete material on the subject of reform .
The aspects of the impact of environmental, social and administrative considerations for Iraq scored high negative points for the assessment of the American Moody Foundation .
Where she mentioned that the country is exposed to very negative environmental risks resulting from carbon residues in the atmosphere left by burning fuel, due to the total economic and financial dependence on the hydrocarbon fuel sector. The mismanagement of the hydrocarbon sector file and the chronic absence of investment in the infrastructure of the oil and gas sector exacerbated this environmental pollution. Iraq is also among the countries most vulnerable to desertification and low rates of water flow due to the absence of good management of water resources and chronic neglect of infrastructure and water leads to a lack of dedicated to agriculture and the lack of water suitable for drinking water provides many demographic groupings .
The institution said that the negative social risks are represented in the labor market in the country resulting from the high unemployment rates, especially among young people, with expectations of high population growth rates that will further exacerbate this problem. The social risks are further exacerbated by the absence of basic public services such as health care and housing, the weak security situation and the instability of sectarian and ethnic tensions .
The institution stated that the record of the weak efficiency of Iraq's fiscal policy, the weakness of its executive and legislative bodies, its judicial institutions, and its weak control over corruption are the main factors that undermine the country's ability to address social and environmental problems and future shocks .
Financial flows are affected by fluctuations in oil prices
CBI Update: Just a note:
including $77,880,000. CASH
ISX Update: Shares Traded: not updated for todayValue Traded: not updated for today
7-12-2021 Intel Guru Frank26 The next step for the CBI is to add value by lifting the 3 zeros, releasing it from the American dollar and floating it internationally because they are Article VIII and being on par, not pegged, to the American dollar which only adds more to the value of the currency of Iraq.
7-12-2021 Intel Guru Holly ... Things are moving everyone so keep the faith! To those who complain about dates constantly changing: "This event is not being done for you (nor me); you (we) are simply going to benefit by it.” It is out of everyone’s control but those who are in charge. This is a transition not a transaction. Never, ever give up. When you sign your NDA be quiet.
7-12-2021 Intel Guru MarkZ [via PDK] ...the chatter is fantastic…my banking folks are very keyed up for late in the week-this week...for us...The news has been exceptionally positive over the weekend guys. I am still just as giddy as I was on Saturday...We all want it to go quicker than it is. I am not concerned anymore because the process has started. Buckle up and watch it play out...I am expecting a big week with steady progress and hopefully a culmination for us all.
7-12-2021 Newshound Guru Pimpy Article: "Zimbabwe Currency...its history in brief" This article says these notes [Zim 1,000,000,000 notes] are no longer any good. What I recommend you do is go to a currency exchange place and ask them if these notes are any good. Now the thing about the dinar is they are good notes. They are being used in country. These [Zim 1,000,000,000 notes] are no longer being used in-country is what it looks like. It's better to be safe than sorry. I don't want people wasting more money on Zim notes. I don't have Zim notes...do a little more digging and find out about these notes. You might have bought a bunch of zim notes that aren't worth anything. Just be careful.
7-12-2021 Intel Guru Frank26 I don't know when. I don't know the date...but based on every breath I take I am well aware that it is happening IMO...we are at that point that we are pressed against the wall...the power is there now. They are about to give it to the citizens and you but you just have to hang in there and go through the process as painful as it may be because this is not at all painful compared to what's out there in the world...
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