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The change from USD to IQD in Iraq

From Army Times author Kris Osborne (no link provided):

U.S. slows cash flow into Iraq, Afghanistan
By Kris Osborn

The U.S. government is slowing the flow of dollars into Iraq and Afghanistan as part of a push to build up the local currencies, banking systems and economies.
In the effort by the State and Treasury departments and the Army, all U.S. payments to local vendors in Iraq and Afghanistan will be made by electronic transfer starting Oct. 1, said Brig. Gen. Phillip McGhee, director of resource management, Third Army.
In recent years, billions of U.S. dollars has flowed into the countries.
“There was no banking structure, there were no financial institutions. They either didn’t exist to begin with or they collapsed after the start of Operation Iraqi Freedom,” McGhee said. “We went for years reverting back to what we know and can do very well, and that is put a lot of cash out there.” But that approach invited corruption and theft, tied up U.S. troops as security guards and gave insurgents a key financial tool.
“Insurgents and al-Qaida prefer to use U.S. currency,” McGhee said. “They can use that anywhere in the world, so the sooner you get that out of there, they will have to find another currency.” But the primary reason for the switch, the general said, was to give Iraqis and Afghans more control of their recovering economies. Using local currency boosts confidence in local governments, one analyst said.
“For the long term, this is good for the country to the extent that people see the Afghan and Iraqi governments as providing stable institutions. It does build some confidence,” said Keith Crane, who directs environment, energy and economic development programs at Rand Corp., a California based think tank.
The flow of U.S. cash is already drying up. U.S. payments will move through a web-based Defense Department service called “Wide Area Work Flow.” That allows the government to “write contracts to the vendors in U.S. currency that are paid in local currency,” McGhee said. “If you are a contractor and your contract was written through [electronic funds transfers] — you can see where your payment is in the system.” The funds will be sent to local banks that have been certified ready to handle e-transfers, where they will be available for the vendors to withdraw in local currency. Reducing cash payments saves the Army money. Each transaction costs about $32 a payment, according to an Army news release.

(Hat tip to one of the readers of DS, please claim your credit in the comments if you wish it.)

Posted in General Iraq Discussion, Iraq Finance, Iraqi Banking related | 12 Comments »

Oil Law passes Iraqi Cabinet stage

A couple of sources are claiming that the HCL was passed, but that is not true. Dinar Speculators are still waiting for an official approval of the HCL in spite of hte article quoted below. As you can see, it says the Iraqi Cabinet approved it… but it still needs to make it through parliament.

Regardless, it’s a good sign that they are moving forward!

Article below:

The Iraqi government has approve 5a8 d a draft Oil Law. The accord does represent a major rapprochement between Baghdad and the Kurdish Regional Government. However, the initial approval may be the easy part in the process. The draft is only an outline and pressure is building to negotiate details. With additional opposition to the move developing, the prospect of finalizing legislation remains in serious doubt, according to an analysis published by Caspian Investor.

Caspian Investor is published by WorldTrade Executive, Inc. and provides unequaled news and analysis of energy sector developments impacting the countries of Central Asia and the Caspian Sea region. It includes extensive coverage of Iran and some details of Iraq as it impacts regional markets.

That still may happen in practice

The law was approved without any details.

317 The Iraqi Cabinet approved a draft of the long-awaited Oil Law on February 27. The bill now moves to the parliament. Sources told Caspian Investor, however, that significant problems remain in securing passage.

Kurdish Support Vital

That the bill has made it this far is a result only of a last-minute decision by the Kurdistan Regional Government (KRG) to back it. “The support, however, is for a broad outline accord,” one source close to the negotiations told us on February 28. “The details of actually dividing oil proceeds will present a major future obstacle.”

Majority Shiite factions are supporting the initiative, at least in its present general version, with the Sunnis expressing reserved support since they remain included in the partition of revenues from sales. There had been genuine concern among the Sunnis, now a minority of the population and controlling only areas of the country without significant hydrocarbon reserves, that the accord would leave them with no oil revenues.

“That still may happen in practice,” notes a Sunni member of the Oil Ministry. “The law was approved without any details.” According to the draft, oil sales will comprise a single fund controlled by the central government and redistributed throughout the country based on population. The regions will have authority to negotiate and sign contracts within the contract guidelines set out in the law. Unfortunately, the government has yet to propose any of these contract specifics.

Other recent articles in Caspian Investor are:

How Serious is the Iranian Push for a Natural Gas Cartel?

Kazakhstan Enters the Russian M&A Market

An Interview with Vagit Alekperov: The president of Russian crude leader LUKOIL.

For more information on Caspian Investor or its related publication, Russian Petrolem Investor, contact Jay Stanley, +1 978 287-0301. or go to http://www.wtexecutive.com and review the energy section.

Posted in General Iraq Discussion, Iraq news, Iraqi Politics | 3 Comments »

For those of you not in the ISX…

It’s amazing to me to hear all the naysayers out there when it comes to the ISX. If you haven’t noticed, Iraq IS moving forward in leaps and bounds on a regular basis. Security is consistently stronger, peace is more prevalent, technology is moving forward, and business is growing. Take a look, for example, at the Warka Bank news page. Here are a couple excerpts:

… Baghdad Motor Cars Servicing is issuing 200% paid up shares at the value IQD (1) per share for those shares owned prior to holding their general assembly meeting. You are kindly requested to submit your signed buy requests to purchase the paid up shares…

You know what that is, right? Free shares. Free shares = free money! More:

… Ready Made Clothes has announced that it will be issuing 41.718% paid up shares at the price of IQD (1) per share for those shares owned prior to holding its general assembly meeting. Investors are kindly requested to …

Yep, more free money! More:

Dear Warka Investors,

Please note that Palestine Hotel has announced that it will be issuing 47% free shares to its fine shareholders.

Getting the picture yet? Well, here’s one more:

… Mamoura Real Estate has announced that it will be issuing 15% free capital shares…

Pretty amazing, huh? All of those announcements were made within the last three weeks. I was personally the recipient of 2 of them, and I am in the process of buying into a few more stocks.

This is, of course, my personal opinion and I am not a financial advisor.

I’m just a wealthy guy who knows the value of free money. Best regards to you and yours.

Now for the poll question – are you invested in the ISX?

Posted in General Iraq Discussion, Iraq Finance | 19 Comments »

Good articles on Central Bank expecting to raise the value of the Iraqi Dinar

Hat tip to Seaview over at IIF.

Someone please tell me how the article was translated by google to include a famous Disney character, though! Article:

Sign adviser CBI Mzarmohamd for Iraq to become of the oil-producing countries developed during the next two years if entering Iraq through the gate of the oil investment.

وأكد صالح أن الاستثمار سينعكس على تطور الواقع الاقتصادي في البلاد نتيجة تنوع موارده، وهو ما سيؤدي إلى ارتفاع قيمة الدينار العراقي: The benefit of that investment will be reflected on the evolution of the economic reality in the country by the diversity of its resources, which would lead to a rise in the value of the Iraqi Dinar:

وأشار صالح في حديث لـ”راديو سوا” إلى أن العراق يحتفظ بمعدلات عالية من العملة الأجنبية تغطي السيولة المحلية ما يدفع إلى استقرار الدينار العراقي في تداولات سوق العملات وبالتالي يحفظ الاستقرار الاقتصادي: Salih noted in an interview with “Radio Sawa” that Iraq retains high rates of foreign currency cover domestic liquidity is paid to the stability of the Iraqi dinar in trading the currency market and thus preserve economic stability:

فيما أوضح الخبير الاقتصادي أسعد العاقولي أن سعي عدد من الدول الأوربية للاستثمار في العراق سيرفع من موارد البلاد وسيدعم قيمة الدينار في المستقبل، ما يؤهل العراق للدخول في الاستثمارات الخاصة في مجال الغاز: The economic expert explained that the happiest bugsbunny attempt by a number of European countries to invest in Iraq will raise the country’s resources and will support the value of the dinar in the future, as Iraq prepares to enter into private investments in gas:

وكان صندوق النقد الدولي قرر منح العراق 1.8 مليار دولار لدعم السيولة النقدية واحتياطيات البنك المركزي العراقي، فضلا عن إنعاش المشاريع التنموية. The International Monetary Fund decided to give Iraq $ 1.8 billion to boost liquidity and cash reserves of the Central Bank of Iraq, as well as for the recovery of development projects.

It sure would be handy to know how to read arabic… If someone could comment on this article with firsthand knowledge of the translation, it would be appreciated!

Posted in General Iraq Discussion, Iraq Finance, Iraq news, Iraqi Banking related, Uncategorized | 5 Comments »

More oil to be produced in Iraq

More oil = more revenue for Iraq, correct? More revenue equals… well, more revenue! I can’t imagine more money being a bad thing!

Test pumping is set to begin soon in the Nassiriya field, part of the al-Geteaa area that is about 380 km south of Baghdad. Expected output is 15,000 bpd – they will only be utilizing 3 of 5 wells in the field.

State run South Oil company director Dhiaa Jaafar states that production will begin in a few days.

Posted in General Iraq Discussion, Iraq Finance, Iraq news, Uncategorized | 1 Comment »

Oil and Gas Commission calls on Shahristani to resign

June 3, 2009

This news is related to the investigation of corruption in the Iraqi government. Recent news, as you may know, reported that around 1000 Iraqi officials were targeted by this situation.

Jaber Khalifa, the representative of the “Virtue Party”, states that Hussain al-Shahristani has tried to mislead the parliament, government, and people by falsely increasing the potential oil exportation capabilities.

Stay tuned for more information, this is breaking news.

Posted in General Iraq Discussion, Iraq news, Iraqi Politics | 1 Comment »

War in Baghdad may be inevitable

War in Baghdad coming when US troops withdraw next month.

The long waged war between the Shiites and Sunnis may have been quiet lately, but the impending withdrawal of American troops next month may mark a huge change in the unwritten policies of the insurgent groups.

Quoted from a Sunni commander, who chose to remain annonymous:

If we hear from the Americans that they are unable to support us, within 6 hours we will establish our forces to fight the corrupt government. There will be war in Iraq.

Although there has been a cease fire agreement, the Sunnis have watched the Shiite led government continue to jail it’s fighters. As it becomes more apparent that the political battle is not making headway for the Sunnis, they will have no choice but to take up arms.

Posted in General Iraq Discussion, Iraqi Politics | 1 Comment »

Iraq Dinar Speculation

Archive for the ‘General Iraq Discussion’ Category

Oil Law passes Iraqi Cabinet stage

For those of you not in the ISX…

More oil to be produced in Iraq

Oil and Gas Commission calls on Shahristani to resign

War in Baghdad may be inevitable

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