The Dreamer.......

In my view, Iraq has the oil reserves, cash reserves, and gold reserves to allow the Dinar to trade on the Forex market. A stable currency backed by these hard assets would allow Iraq to trade on the exchange as a major currency. The large market swings referred to is not warranted. For example, the U.S. Dollar and the Euro move up and down in the market via small pips not large 40 or 50 point swings.

The stability of the Dinar because of Iraq's hard backed assets makes it a candidate for forex trading. I disagree with your assumption that the Dinar will never be listed on the forex market.


The Rebuttal !!

The CBI only has .57 billion dollars in gold and SDRs combined. The CBI owns no oil, not a single drop. They have ~ 38.015 billion dollars in foreign assets mostly dollars. The CBI with that small amount of assets could be minipulated by one large investment fund. They would quickly short the market, drive down the price, buy up the dinar and demand to be paid in gold or dollars. A entry in the Forex market would break the CBI within a week or less.

The CBI assets are listed in the KFI. They have no oil assets. The oil belongs to the people of Iraq and is managed by the Govt. It is exported and sold to fund the budget.


I just can't understand why folks don't get that Iraq is no "Smoke Screen" !!! They run a very tight Monetary system and are very transparent !!! .....It's a lot more simple than folks think......there is no rabbit out of the hat trick here !!! It is what it is !!

A change in monetary policy...reserve requirements:



Explanation to Banks of New Monetary Policy Instruments

Monetary Policy Instruments

The design of a central bank’s monetary policy instruments should serve both to foster efficient short-term liquidity management by banks and to deliver the central bank’s desired monetary policy (which can be measured by a variety of intermediate variables, including the yield curve, the exchange rate, and the rate of growth of the monetary supply). With regard to liquidity management, the central bank’s policy instruments must work together with money and securities markets and an efficient payment system to provide banks with confidence that they can always meet their payment obligations at a reasonable cost. The most certain, but also the most costly, form of liquidity is provided by excess reserves (vault cash and balances with the central bank in excess of required reserves). Intermediation spreads (the difference between interest rates on deposits and on loans) can be narrowed by enabling banks to minimize their holdings of non-interest yielding excess reserves. Bank’s ability to minimize excess reserves depends on the availability of other reliable means of liquidity management.
The CBI currently has the following active and passive instruments that affect market liquidity (base money):

• Foreign exchange auctions, in which the CBI buys or sells dollars to the market in light of its policy objectives;
• A reserve requirement regulation that requires banks to hold in relation to their customers deposits: differentiated levels of deposits with the CBI, vault cash, and MOF securities.
• An Overdraft Facility, for banks with reserve account balances at the CBI that are not sufficient to settle their net end of day payment obligations;
• A Discount Window for bills of exchange and similar bank paper with a maturity of less than 90 days and at least two endorsements (currently charging 11% for good quality paper);
• Lender of Last Resort Facility, which provides individually negotiated loans against collateral, for banks with chronic liquidity problems;
• MOF securities Window, at which banks may buy or sell MOF securities at par (i.e. at issued interest rate).

The above instruments are not adequate for the development of an efficient market oriented financial sector. In particular, they are not adequate or appropriate for developing an efficient and liquid market in government securities or for conducting a market based monetary policy.

While the new FX auctions are well designed and are functioning satisfactorily, the other instruments are being redesigned. The reserve requirement does not provide banks with a useful liquidity management tool and would have complicated the implementation of a monetary target. It also includes a government securities requirement that should not be part of the requirement. The various lending facilities are not very transparent and do not always serve policy objectives. The MOF securities window provides much needed liquidity to MOF securities, but under terms that undercut the development of secondary trading and of an interbank market. Furthermore, the MOF securities window deprives the CBI of one of its most important instruments of monetary control by leaving to banks the discretion to buy or sell MOF securities with the CBI.

Articles 28, 29 and 30 of the CBI law establish the CBI’s powers to conduct open market operations, provide standing facilities for banks, establish reserve requirements, and, under exceptional circumstances, provide Lender of Last Resort credits. These articles provide the basis for the modern policy instruments being adopted by the CBI.

The new reserve requirement and banking facilities regulations are designed to help banks manage their liquidity more effectively in the market. Banks are encouraged to deal with each other more extensively rather than the central bank when managing their liquidity.

The reasons for and key features of each new instrument are set out below.

Reserve Requirement

The CBI’s reserve requirement, confirmed as recently as December 12, 2003, is really three separate requirements in one Instruction. It requires banks to maintain frozen deposits with the CBI, which are currently 20% of their current/demand deposit liabilities of the previous month, 5% of their savings deposit liabilities, and 2% of their time/fixed deposit liabilities. In addition, the Instruction also contains two additional, basically unrelated requirements to hold MOF securities of at least 10% of banks’ total deposit liabilities and vault cash of at least 5% of total deposit liabilities. These required reserves are not remunerated. The Reserve Requirement Instruction is addressed by CBI’s Board of Directors to the Statistical and Research Department and the Credit and Banking Control Department. The report from banks in compliance with the Instruction is addressed to the Accounting Department.

This reserve requirement does not reflect best practice and the CBI is introducing a new requirement, better designed for the needs of monetary policy in a market economy. Where they exist, reserve requirements almost universally are seen as a tool of monetary policy rather than banking supervision. Thus the responsibility for monitoring each bank’s compliance with the revised requirement has been moved from the Credit and Banking Control Department to the Agreements and Loans Department, the department with primary responsibility for monetary policy implementation.
For monetary policy purposes a uniform requirement (i.e., the same ratio for all reservable deposits) is preferable. The ratio in the new requirement is applied to all deposit liabilities in the definition of money because that makes the money multiplier (the ratio of the quantity of money to base money) more stable and predictable.

In addition, it
has a neutral impact on the public’s choice of deposit maturities, which from a "tax" policy perspective is preferable. Foreign currency deposits are also included in the deposit base for the reserve requirement so as not to favor foreign currency deposits and hence dollarization. The requirement against both dinar and foreign currency deposits must be meet with dinars.
The current regulation imposes separate requirements on bank’s deposits with the CBI and bank’s vault cash. In the new requirement these are combined so that the single, uniform requirement may be satisfied by the sum of each bank’s vault cash and current account deposits with the CBI.1
The primary benefit to banks of the new requirement results from allowing the requirement to be met on average rather than on a continuously basis. The requirement will continue to be established for monthly periods but the current frozen deposits will be moved into the single clearing account for each bank. The assets that must be held on average to satisfy the requirement will be banks’ Iraqi dinar deposits with the central bank (other than in the standing deposit facility) plus their (new) Iraqi dinar cash in their vaults. A bank may use any and all of its deposits with the CBI on any day as long as its average end of day balance (plus its average ID vault cash) is equal or greater than the required amount.
The CBI Board has set the reserve ratio at 25 percent. Because the new reserve requirement allows banks to use their dinar vault cash to satisfy the requirement, bank’s reserve assets will be greatly increased. To limit the impact of this change on bank liquidity (without raising the requirement ration even more), the Board also stipulated that 20 percent (of deposits) must be meet by deposits at the CBI and 5 percent (of deposits) by vault cash.
A monthly averaging period can convert the reserve requirement into a quite useful tool for absorbing individual bank and system wide liquidity fluctuations in day to day positions.
The 10% government security requirement is being discontinued, as is the separate requirement for vault cash.

Found elsewhere !!! Thought it was some good info, This is what others are coming up with ....just to show you it's not just me now .................



Once again... it's a good time to post these numbers...
I put these numbers together a while back, so they may be a little off by now... but these were the only countries with a rate of 1:1 or more and what there M2 is.
If Iraq dropped 3 zeros, they would have 32.5 Billion and be the highest on the list. With the exception of the UK, but the UK has a 2 trillion dollar GDP and it Traded of the FX, so it not much of a comparison.

Country/M2
Kuwait 16 Billion
Malta 3.2 Billion
Bahrain 4.3 Billion
Oman 4.4 Billion
Cyprus 11.8 Billion
U.K. 1.4 Trillion
Latvia 5.6 Billion
Jordan 13.9 Billion
Cayman, Island 5.1 billion

Just for comparison.... these are the lowest currencies in the world... notice a trend?

Korea 1,800 Trillion
Mongolia 1.2 Trillion
Tanzania 2.8 Trillion
Iraq 32.5 Trillion
Lebanon 80 Trillion
Uganda 3 Trillion
Colombia 104 Trillion
Belarus 16.5 Trillion
Venezuela 66.5 Trillion
Sierra Leone 687 Billion
Indonesia 1,200 Trillion
Iran 950 Trillion
Vietnam 810 Trillion

This info by itself is all that's needed to know the dinar will never RV.

We just as well show what the USA has so we can see it cant ever revalue either. And we are the ones that set the standards for everyone else.
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USA M2 2009-Jan. 8.2439 Trillion
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http://www.federalreserve.gov/releases/h6/Current/

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DougMyers member # 40

It has to be allowed to float freely.

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'I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.'
Thomas Jefferson 1802

without a doubt but with 30+trillion dinar its either gonna take forever to remove or just lop..their economy cant justify a lop or rv at this time jmo...not even sure which way to lean anymore, the info that comes out goes back and forth so who knows they for sure wanna remove the zeros but how lol

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"The American people will never knowingly adopt socialism. But, under the name of 'liberalism,' they will adopt every fragment of the socialist program, until one day America will be a socialist nation, without knowing how it happened." - Norman Thomas, U.S. Socialist Party presidential candidate 1940, 1944 and 1948