Iraq Dinar Speculation

Followers of the Iraqi Dinar no doubt remember how the budget has been affected over the last couple months by the instability of oil prices. In fact, a large portion of the Iraqi government budget was simply lopped off on three separate occasions as oil plummeted from $150 per barrel to the $30 range.

This obviously puts a stress on the value of the Iraqi economy, and also on the value of the Iraqi Dinar. Good change may be on the way, however.

Yesterday, oil hit $70 per barrel, and many experts are insisting that it will go higher… with the impending decline of the USD, prices could hit $250 per barrel. A spokesman from BP states that they have reserves enough to last 42 years, but others who subscribe to “peak oil” – the theory that the maximum rate of oil production has been reached – believe supplies will run out much sooner because of growing demand.

Previous budget was based on oil prices of $62.50.

Maliki said at a meeting with provincial governors in Baghdad,

The rise in oil prices and production could allow us, God willing, to present a supplementary budget…

According to the Iraqi Oil Ministry on Monday, oil prices are around 70 dollars a barrel and oil revenues rose 8.1 percent in April compared to  March, with lower exports being offset by the higher prices.

Go figure, it’s the Iraqi Dinar!

…there has been continued increase in the Dinar verses the Dollar in the past 6 years and it should continue to gain.

Here’s the full article: http://www.fxstreet.com/technical/forex-forecasts/trade-of-the-day/2009-06-05.html

The Iraq cabinet reviewed and approved the first draft amendment for investment law 13/2006 and is pushing it through to paliament.

The new law will allow investors, both foreign and local, to own lands and real estates, paving the way for future growth.

Good news!

The DFI (Development Fund for Iraq) holds an estimated $20-30BB (20-30 billion US dollars). The fund was created in May of 2003 at the request of Coalition Provisional Authority (CPA) Administrator and deposited into the US Federal Reserve Bank of New York. Part of the total amount has since been moved to the CBI (Central Bank of Iraq).

From Abdulbasit Turki:

“The anti-corruption coordinator at the U.S. embassy in Baghdad, Joseph Stafford, said that the U.S. president has agreed to the extension for one more year.”

The DFI account in Iraq was created for “cash payment requirements”. So far, it has been used mainly for the wheat purchase program, Iraqi security forces equipment, elecricity and oil infrastructure programs, and the currency exchange program.

We hope that in the near future, “cash payment requirements” will include covering a revaluation of the currency. I know I’d like to be on the receiving end of that “requirement”!

Chairman of the House of Representatives, Iyad al-Samarrai, makes the statement that the oil and gas law has gone on too long without action. He says the bill is important and vital for the Iraqis.

The proposal is drafted and ready for approval. Doing so will open many doors for progress in Iraq, what do you think is stopping them from forging ahead?

Although they recognize Iraq has fullfilled several of the requirements to have Chapter 7 lifted, Kuwait is still owed and Iraq is not yet ready to be freed of Chapter 7.

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