Kaperoni (Dinar Guru) – The auctions have been between $170 and $201 million per day the last 3 weeks. Yes that is high but the result is compliance with the IMF. The reserves will drop if this continued for months and…we will see the CBI write the letter for Article VIII as soon as they are allowed. Remember the IMF also wants them in Article VIII.
Kaperoni (Dinar Guru) – Article quote: “The dollar witnessed the exchange rate of the dinar against a significant decline recently due to increased selling hard currency at the central bank auction rate as sales exceeded $ 250 million per day after it was more than $ 130 million in the past years. …I cannot recall ever seeing an article stating that sales was over $200 million in a day. And with the IMF and UST helping them reduce the spread I find it unlikely that this is not closely watched.
Kaperoni (Dinar Guru) – I think it was stated yesterday that 60 trillion dinar exists outside the banking system (under beds, couches etc.) Reducing the money supply has to occur over time. IMO it will occur while they are floating the dinar. I am expecting IMF Article VIII sometime between June -August and a float to begin as investors bring capital into Iraq thereafter. …Until they can get their profits out, no investors will come. Article VIII offers that ability. And that is why the IMF made it so clear in the Article IV Consultation….”Such a move towards acceptance of the obligations under Article VIII of the IMF’s Articles of Agreement will send a positive signal to the investor community that Iraq is committed to maintain an exchange system that is free of MCPs and restrictions for current international transactions and thus facilitate creation of a favorable business climate.” …Improving some laws is a must, but IMO Iraq has the laws to begin investment in a private sector.