INTERVIEW-Iraq to issue intl bonds in August

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Jun 30 2015

[size=33]INTERVIEW-Iraq to issue intl bonds in August[/size]

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Iraq's budget deficit has risen to around 12% of GDP, said a central bank official.
The Iraqi government is planning to issue a total of USD 11 billion in domestic and international bonds in the next two months to cover the state budget deficit, the acting central bank governor said.

Ali Al-Allaq told TR Zawya that the government would issue around USD 5 billion in domestic bonds next month and around USD 6 billion in international bonds by the middle of August. He said the government has started talks with potential investors in Turkey for the five-year international bonds.

"The domestic bonds will be repaid to the public in one year after deducting a specific rate that is close in value to the interest rate," said Al-Allaq, without elaborating on interest rates.

The central bank also plans to repurchase government bonds as parts of wider efforts to provide financial liquidity, maintain price stability and support the economy, Al Allaq said. He said the state has allocated IQD 1 trillion over the next five years to support small and medium enterprises.

The sharp drop in crude prices has hit the revenues of the oil producing country. Spending in the current budget stands at around IQD 125 trillion, and the deficit has risen to 12% of gross domestic product, the official said.

Iraqi's Finance Minister Hoshyar Zebari previously told Reuters that the government has started discussions with Citibank and Deutsche Bank for the international bonds issue, but declined to say what maturity and interest rates were being negotiated.

He said the ministry was looking at various methods to fund the budget deficit, including borrowing from state banks and converting some Iraqi bank assets held with the central bank into bonds.

The Economist Intelligence Unit (EIU) said in a June report that despite rising crude production, weaker oil prices would result in an annual average fiscal deficit of 6.9% of GDP in 2015-16, but it expected public finances to return to surplus in 2018.

The Iraqi government has reached an agreement with the International Monetary Fund for a USD 833-million loan program to help Iraq cope with the drop in oil prices as it increases spending on security to combat the threat of the Islamic State militant group, which now controls about one-third of the country.

Al-Allaq said that inflation in the country remains at less than 2% and that the net flow of U.S. dollars into the central bank has also not been affected, he added.

"At the daily auction of the central bank, we sell about USD 150 million, which is more than the USD 75 million [prescribed] in the budget law," said the central bank official. "Foreign reserves currently stand at USD 68 billion, while the dinar monetary supply is IQD 40 trillion."

The central bank has maintained the Iraqi dinar peg to the U.S. dollar through daily currency auctions.

The EIU said that the market rate of the dinar would continue to drift above the central bank auction rate so long as the size of the auctions is restricted. "The CBI could also come under pressure to weaken the dinar to help to ease the fiscal deficit," the report said.

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So since the article talks about them issuing bonds in USD they will be at 1166 just to cover the budget.  And not maybe at a different rate.
Thanks
LIT

jusr a simple duck dont know all dem nuances.. maybe someone else can explain dis stuff ya!

Thanks Duck,
LIT

quack quack,    thanks duck!

The professor!!

Thanks Duck, great info.  Very happy to see it this morning.  Thanks again.

Iraq Money Supply M2 2003-2015 | Data | Chart | Calendar | Forecast

Money Supply M2 in Iraq increased to 91704 IQD Billion in December of 2014 from 88007 IQD Billion in November of 2014. Money Supply M2 in Iraq averaged 44296.55 IQD Billion from 2003 until 2014, reaching an all time high of 91704 IQD Billion in December of 2014 and a record low of 6953 IQD Billion in December of 2003. Money Supply M2 in Iraq is reported by the Central Bank of Iraq.

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[th]Iraq Money[/th][th]Last[/th][th]Previous[/th][th]Highest[/th][th]Lowest[/th][th]Unit[/th][th][/th]

[You must be registered and logged in to see this link.]	6.00	6.00	20.00	6.00	percent	[You must be registered and logged in to see this link.]
[You must be registered and logged in to see this link.]	63993.00	61133.00	73259.00	6708.00	IQD Billion	[You must be registered and logged in to see this link.]
[You must be registered and logged in to see this link.]	72651.00	70182.00	74504.00	5774.00	IQD Billion	[You must be registered and logged in to see this link.]
[You must be registered and logged in to see this link.]	91704.00	88007.00	91704.00	6953.00	IQD Billion	[You must be registered and logged in to see this link.]
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[th]COUNTRIES G20 AMERICA EUROPE ASIA AUSTRALIA AFRICA WORLD[You must be registered and logged in to see this image.][/th][th]Money Supply M2[/th][th]Reference[/th][th]Previous[/th][th]Highest[/th][th]Lowest[/th][th]Unit[/th][th][/th]

[You must be registered and logged in to see this link.]	2133393.16	May/15	2132920.01	2139997.96	0.01	BRL Million	[You must be registered and logged in to see this link.]
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[You must be registered and logged in to see this link.]	2506.90	May/15	2484.60	2506.90	34.40	EUR Billion	[You must be registered and logged in to see this link.]
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jedi17 wrote:Foreign reserves currently stand at USD 68 billion, while the dinar monetary supply is IQD 40 trillion."

so the question is Neno....or Quack....or anyone else......is that 40 trillion dinar in the CBIs greedy little hands or is it in the hands of the Iraqi citizens?  If it is in the hands of the citizens, then we are in for a little wait....however, putting out a new 50 with a value of 50,000 dinar will help bring in most of the large notes.....and then they will have to put out smaller denoms.....just looking for some thoughts

My opinion, if anyone thinks the 40 trillion is in circulation, sell, sell, sell!

duck2000 wrote:ira has stated they have 1 1/2 times reserves to cover IQD

The figures their given here means, about 40 billion will cover 40 trillion dinars at the exchange rate now with 28 billion still over in eserves. There's your 1 1/2 times he now exchange rate.

Neno wrote:

jedi17 wrote:Foreign reserves currently stand at USD 68 billion, while the dinar monetary supply is IQD 40 trillion."

so the question is Neno....or Quack....or anyone else......is that 40 trillion dinar in the CBIs greedy little hands or is it in the hands of the Iraqi citizens?  If it is in the hands of the citizens, then we are in for a little wait....however, putting out a new 50 with a value of 50,000 dinar will help bring in most of the large notes.....and then they will have to put out smaller denoms.....just looking for some thoughts

My opinion, if anyone thinks the 40 trillion is in circulation, sell, sell, sell!

ok....a little tired of the sell sell sell thing that I have heard.  I have not said that they have 40 trillion in circulation, but they do have at least that amount printed.  I also stated that they only printed 5 trillion in the new stark denoms in 2012 and are probably trying to get the circulation down to at least that, and I have stated that the new 50 will be put in circulation with a value of 50,000 to help get rid of all the other 000's notes.  M1, m2, m3 and all the other M crap from the banks is so difficult to understand that I am not sure that anyone really does understand it.  What I would like to know, is how much dinar is in circualtion?? Is it 5 trillion? 10 trillion? We have thought in the past that certain things need to be done for a rv, or that it has to rv before something happens.....and now...I dont think anything has to be done, or that rv has to happen before something is done as we have speculated this to no end before and we are really just where we started...lol....with no rv.