Home
First topic message reminder :
Shared with me today from another member and we would like to read all comments and thoughts. TY ~Neno
The Exchange Rate of Foreign Currency in Economic Feasibility Studies
Below
are the central controls related to the exchange rate of the foreign
currency to convert the project inputs and outputs from foreign currency
to its equivalent in the local currency, and that is by calculating the
net discounted present value standard and the internal return on
investments in economic analysis that governs investment projects that
costs excess one million dinars.
Estimate the shadow price of foreign currency:
1. It
is necessary to put central controls to amend the official exchange
rate * to reflect the shadow price of the foreign currency, and that is considered one of the necessary requirements to implement the
net discounted present value standard and the internal return rate on
investment in the economic calculation stated in the instructions,
paragraph nine.
The
central controls for adjusting market prices distinguished a group of
outputs and inputs traded internationally, where the projects production
or usage of them is reflected on the abundance of foreign currency in
the economy and thus project outputs or inputs used of such are
considered purely foreign currency outputs or inputs.
2. Justifications for exchange-rate adjustment:
there are a number of important and powerful arguments which support
the view that the official exchange rate reduces the real value of
foreign currency for purposes of calculating the economic
national profitability for investment projects and hence for the
purposes of investment planning. It is demonstrated in this context to
call for assessing the dinar for less than (3.208) dollar (official
exchange rate) when assessing project outputs and inputs of traded goods
of exports, substitute imports and imports... etc.
The justifications to call for the use of an exchange rate that is lower than the official exchange rate are:
· The
use of an exchange rate that is lower than the official rate is the
appropriate action at the investment planning level to translate the
country’s economic strategy aiming at stimulating central investments in
the sectors that encourage the development of non-oil exports, as well
as sectors that encourage the expansion of domestic production base in
order to reduce imports and compensate it with local commodities.
This helps to reduce reliance on foreign exchange earnings from crude
oil exports and increases the share of non-oil sectors in the local
production.
· The
application of the amended exchange rate on project imported inputs
will assist in directing investments away from aggregated sectors
dependent on imported inputs and the preference of those sectors that
rely on locally produced inputs.
· The
use of the amended exchange rate helps to correct the balance in favor
of the traded goods sectors compared to non-traded goods.
· The
real exchange rate has declined rapidly since the early seventies,
through rapid rise of the level of prices and local costs which led by
the steadiness of the official exchange rate to change in prices and
actual local rate costs that gave an advantage for imported goods at the
expense of locally produced goods, meaning that it led to deterioration
of the competitiveness of alternative replacement goods and export
commodities.
· This
action shows that the official exchange rate overestimates the value of
the dinar, compared to the foreign currency and from the promoting
goods substituting imports and export commodities point of view of.
And in support to this view is the state’s utilization and in a broad approach to the customs
and quantitative protection policies especially for consumer goods, as
well as export subsidies that exports have through an amended export
exchange rate.
3. Estimate
the amended exchange rate of the Iraqi dinar to be used in technical
and economical feasibility studies and for (1.134) dollar per dinar. This price should be approved for 3 years until re-appreciation by the competent authorities.
[You must be registered and logged in to see this link.]
Shared with me today from another member and we would like to read all comments and thoughts. TY ~Neno
The Exchange Rate of Foreign Currency in Economic Feasibility Studies
Below
are the central controls related to the exchange rate of the foreign
currency to convert the project inputs and outputs from foreign currency
to its equivalent in the local currency, and that is by calculating the
net discounted present value standard and the internal return on
investments in economic analysis that governs investment projects that
costs excess one million dinars.
Estimate the shadow price of foreign currency:
1. It
is necessary to put central controls to amend the official exchange
rate * to reflect the shadow price of the foreign currency, and that is considered one of the necessary requirements to implement the
net discounted present value standard and the internal return rate on
investment in the economic calculation stated in the instructions,
paragraph nine.
The
central controls for adjusting market prices distinguished a group of
outputs and inputs traded internationally, where the projects production
or usage of them is reflected on the abundance of foreign currency in
the economy and thus project outputs or inputs used of such are
considered purely foreign currency outputs or inputs.
| * What is meant by exchange rate: the number of units of foreign currency, expressed in dollar per one dinar. In particular the following outputs and inputs of foreign currency were distinguished: · Export-outputs. · Outputs marketed locally that substitute imports. · Imported inputs. · Inputs produced locally that usually go to exports. · Foreign labor. According to the pricing rules the value of the output and input (traded) is calculated using export prices (FOB) and import prices (CIF), according to what is listed in the pricing rules. In other words the pricing rules calculate what the project produces from foreign currency (quantity of exports multiplied by the export price (FOB) in foreign currency or the quantity of substitute imports multiplied by the import price (CIF) in foreign currency, as well as what the project uses from foreign currency and imported inputs multiplied by the import price (CIF) in foreign currency .... etc.). In a later step, project outputs and inputs must be converted from the foreign currency to its equivalent in local currency (dinars) by using a specific exchange rate for the foreign currency. |
2. Justifications for exchange-rate adjustment:
there are a number of important and powerful arguments which support
the view that the official exchange rate reduces the real value of
foreign currency for purposes of calculating the economic
national profitability for investment projects and hence for the
purposes of investment planning. It is demonstrated in this context to
call for assessing the dinar for less than (3.208) dollar (official
exchange rate) when assessing project outputs and inputs of traded goods
of exports, substitute imports and imports... etc.
The justifications to call for the use of an exchange rate that is lower than the official exchange rate are:
· The
use of an exchange rate that is lower than the official rate is the
appropriate action at the investment planning level to translate the
country’s economic strategy aiming at stimulating central investments in
the sectors that encourage the development of non-oil exports, as well
as sectors that encourage the expansion of domestic production base in
order to reduce imports and compensate it with local commodities.
This helps to reduce reliance on foreign exchange earnings from crude
oil exports and increases the share of non-oil sectors in the local
production.
· The
application of the amended exchange rate on project imported inputs
will assist in directing investments away from aggregated sectors
dependent on imported inputs and the preference of those sectors that
rely on locally produced inputs.
· The
use of the amended exchange rate helps to correct the balance in favor
of the traded goods sectors compared to non-traded goods.
· The
real exchange rate has declined rapidly since the early seventies,
through rapid rise of the level of prices and local costs which led by
the steadiness of the official exchange rate to change in prices and
actual local rate costs that gave an advantage for imported goods at the
expense of locally produced goods, meaning that it led to deterioration
of the competitiveness of alternative replacement goods and export
commodities.
· This
action shows that the official exchange rate overestimates the value of
the dinar, compared to the foreign currency and from the promoting
goods substituting imports and export commodities point of view of.
And in support to this view is the state’s utilization and in a broad approach to the customs
and quantitative protection policies especially for consumer goods, as
well as export subsidies that exports have through an amended export
exchange rate.
3. Estimate
the amended exchange rate of the Iraqi dinar to be used in technical
and economical feasibility studies and for (1.134) dollar per dinar. This price should be approved for 3 years until re-appreciation by the competent authorities.
[You must be registered and logged in to see this link.]
» Al-Sudani chairs the fifth session of the Supreme Coordination Committee between the governorates
» A fruitful international-Japanese partnership produces its eighth batch... Celebrating the success o
» The President of the Republic stresses the need to develop a future strategy for financial policy ac
» Tomorrow.. Turkish Trade Minister visits Baghdad to discuss several files
» Rashid and Al-Alaq discuss the future of the Iraqi banking sector
» US Ambassador assures Maliki of her country's support for Iraq's stability
» Parliamentarian addressing the Judicial Council: When will corruption files be resolved?
» Economist: Re-exporting Kurdistan oil will cause Iraq to lose $5 billion and a budget deficit
» Financial Advisor: Good performance of fiscal space reflects government’s ability to increase spendi
» The President of the Republic stresses the need to develop a future strategy for financial policy
» Parliament determines the most important laws it will work on before its legislative break in a few
» Dollar exchange rates against the dinar in Iraqi stock exchanges
» Government correspondence to install 8 thousand electricity meter readers
» utube 11/16/24 MM&C-News Report-Iraq Dinar-Oil-Flow-Global Maritime Trade-Cross Border Transfer-Ex
» utube 11/13/24 MM&C MM&C News-Private Sector- Electronic Payments-Reconstruction-Development-Digit
» utube MM&C 11/15/24 Update-Budget-Non Oil Resources-CBI-USFED-Cross Border Transfers-Oil
» Al-Sudani is besieged by lawsuits over the “wiretapping network”... and Al-Maliki heard “inappropria
» Tens of thousands of foreigners work illegally in Basra... and the departments will bear the respons
» 4 reasons for the Sudanese government’s silence in the face of the factions’ attacks.. Will Baghdad
» PM's advisor: Government able to increase spending without inflation or fiscal deficit
» Prime Minister stresses the need to complete 2024 projects before the end
» Minister of Labor sets date for launching second batch of social protection beneficiaries in the pol
» Al-Sudani approves 35 new service projects, stresses the need to complete 2024 projects
» Minister of Labor: The population census will provide accurate calculations of poor families covered
» Electricity announces its readiness for the winter peak
» Economist: Parallel market remains pivotal to financing Iraq’s trade with Iran, Syria
» Trump: Iraq: A subsidiary or the focus of major deals?
» Counselor Mazhar Saleh: The government is able to increase spending without causing inflation or a f
» Al-Sudani's advisor to "Al-Maalouma": We do not need to bring in foreign workers
» Parliamentary Rejection.. Parliamentarian Talks About Jordanian Agreement That Harms Iraq’s Economy
» Al-Sudani chairs the periodic meeting of the service and engineering effort team
» Al-Sahaf: Washington continues to support terrorist organizations in Iraq
» Al-Maliki Coalition: America is trying to make Iraq hostile to its neighbors by violating its airspa
» Close source: Al-Sudani failed to convince Al-Hakim and Al-Amiri to carry out the ministerial reshuf
» Al-Sayhoud on Postponing Parliament Sessions: Bad Start for Al-Mashhadani
» Peshmerga Minister: The survival of the Kurdistan Region depends on the presence of a strong Peshmer
» Al-Maliki Coalition: US pressures prevent Israel from striking Iraq
» Nechirvan Barzani calls for keeping Peshmerga out of partisan conflicts, urges formation of 'strong
» US Institute: Trump administration may prevent Iraq from importing Iranian gas as part of pressure o
» The meter will visit families again.. Planning details the steps for conducting the population censu
» Government clarification: Is Iraq able to increase spending?
» Iraq advances over China.. Iran's trade exchange witnesses growth during October
» Al-Sudani approves 35 new service projects and begins implementing them within 10 days
» Al-Sudani and Al-Hakim discuss developments in the political scene and the results of the visit to K
» Minister of Labor: Government measures contributed to reducing the poverty rate from 22% to 16.5%
» Al-Maliki calls for strengthening national dialogue and unity to overcome the current stage
» Al-Sudani stresses the importance of accuracy and specifications in service and engineering projects
» Baghdad Governor: 169 projects are listed for referral and contracting
» Industry confirms success by signing 4 investment contracts for strategic industries
» Parliament confirms its support for conducting the general population census and decides to resume s
» Parliament gains a "holiday and a half"... Half of the "extended" legislative term passes without se
» Find out the exchange rates of the dollar against the dinar in the Iraqi stock exchanges
» Al-Maliki describes tribes as a "pillar" for confronting challenges in Iraq
» The plan in the "distribution method".. A representative describes the "investment achievement" as n
» Iraq is ahead of China in trade exchange with Iran.. These are the numbers
» MM&C 11/14/24 Central Bank Governor Urges Türkiye to Open Accounts for Iraqi Banks
» MM&C 11/14/24 Trump and the Iraqi Banks Puzzle
» New decline in gold in Iraq.. and globally records the worst week in 3 years
» Monitoring body approves 2023 imports annual report
» Development Road: Faw Port Ignites Regional Corridor Race
» First in Iraq... Diyala sets a plan for "rural reconstruction"
» Al-Saadi: Influential parties are working to erase the theft of the century file
» MP: Baghdad supports the "Diyala Artery" project with 40 billion dinars
» Source: General amnesty law will pave the way for the return of terrorist groups
» The Prime Minister stresses the need to expedite the completion of the requirements for restructurin
» Minister of Resources: The project to develop the left side of the Tigris River has reached its fina
» Foreign Minister: We are proceeding with implementing the associated gas exploitation program
» Swiss Ambassador Expresses His Country's Desire to Invest in Iraq
» "We left the camel and its load" .. Moroccan farmers await "imminent compensation" from Iraq
» OPEC sues Iraqi minister over oil violations.. What is Kurdistan's involvement?
» Iraq warns of 'dire consequences' of imposing barriers to plastic products
» Iranian newspaper: Iraq's development path is a step towards regional economic integration
» Al-Mandlawi discusses with the Russian ambassador developing relations in the fields of economy, inv
» Oil Minister discusses with Dutch Ambassador strengthening bilateral relations
» The Minister of Oil discusses with the companies "+dss" and "Xergy", joint cooperation to develop th
» Rafidain Bank announces a plan to include other branches in the implementation of the comprehensive
» With the presence of the opposition... Baghdad supports the partnership government in Kurdistan
» Parliamentary move to raise retirement age in state institutions to 63 years
» Through leaks.. Warnings against creating political crises as parliamentary elections approach
» Iraqi oil returns to decline in global markets
» Parliamentary Committee: Iraq uses its international relations to avert the dangers of war from its
» The value of non-oil imports for Sulaymaniyah and Halabja governorates during a week
» Rafidain: Continuous expansion in implementing the comprehensive banking system
» Planning: The population census includes residents of Iraq according to a special mechanism
» Transparency website reveals non-oil imports to Sulaymaniyah and Halabja during a week
» Al-Sudani directs the adoption of specialized international companies to prepare a unified structure
» MP warns of a move that will worsen the housing crisis and calls on the government
» Disagreements strike the Kurdish house... hindering the formation of the regional parliament and gov
» Hundreds of Moroccan farmers are waiting for “imminent compensation” from Iraq.. What’s the story?
» Iraq 10-Year Review: Spending, Imports, Unemployment in 2024 at ‘Highest Level’ in a Decade
» Call to all smokers in Iraq: Prepare for the law
» utube 11/11/24 MM&C News Reporting-IRAQ-USA-Financial Inclusion up 48%-Money Inside & Out of Iraq
» Al-Mandlawi to the UN envoy: The supreme authority diagnosed the problems and provided solutions for
» Saleh: Government strategy to boost gold reserves as part of asset diversification
» Prime Minister's advisor rules out oil price collapse: Trump's policy will not sacrifice petrodollar
» Tripartite alliance between Iraq, Egypt and Jordan to boost maritime trade
» Parliamentary Committee reveals date of entry into force of Personal Status Law
» Al-Fatah warns against US blackmail and Trump's intentions for the next stage