Rate on CBI

jbowhunter wrote:Just curious if there are any logical reasons as why the rate on the CBI website hasn't changed since 07.04.2013?  I see auctions have been updated, but not the rate.

chazmaz wrote:The rate shown on the CBI website is the official rate set by the CBI expressed in USD, IQD1,166 per $1.  The CBI attempts to defend/maintain this rate by being wiling to exchange USD for IQD at this rate at the currency daily currency auctions.  The fluctuations in the value of the IQD seen on other sites are the result of fluctuations in the value of the dollar.  

Additionally, the value of the IQD on the streets of Iraq is lower than the official rate, sometimes IQD 1,300 to IQD 1,400 per $.  This gives the insiders, who have access to the currency auctions a virtual money tree - they can take the IQD they receive as salary and exchange it for dollars at a much better rate than is available to

ordinary Iraqis.  If they have USD, they can buy up IQD on the street at the lower rate and then exchange it for USD at the auctions, earning a quick 10% to 20% return on virtually a daily basis.  

This is why I watch the cash portion of the daily auctions.  I think the Iraqi insiders who have access to the currency auctions have a pretty good idea of what is going on in terms of the value of the currency.  As long as they are willing to exchange their IQD for dollars at IQD 1,166 per USD in large volumes, I don't think that a substantial upward increase in the value of the IQD is imminent.  Lately, the cash portions of the daily currency auctions have been higher than at any point in the last 4 years.  I had hoped that the release from Chapter 7 would result in a decrease in the volume of the cash portion of the auctions, but there has been no discernible change.  

So, I am not optimistic that there will be an increase in the value of the currency soon.  I hope I'm wrong and would be happy to hear from anyone with a different viewpoint.

jacksmack wrote:

 I didn't see it change on 7/4 ...........its been 1166 for quite sometime.

CITEX wrote:

 There is a date posted in the exchange rate box, its at the bottom.

Bigben wrote:

 Dont think much about Iraq currency auction but I think auction has to do with stabilising exchnage rate along with a program rate set while under chp 7. while under program rate iraq sells oil funds go into dfi which helps them build reserves, prior to the setting of 1470 iraq had only about 10 billion in reserves to back their currency now they have over 86 billion last reports i read somewhere plus 30 plus tons in gold. Chapter 7 is no longer so now they are free to do with the rate as they see fit and I would think that would mean the removal of zeros and setting of a new rate backed by all that money and gold which would mean that there would be no need for currency auctions! That's all I. Know maybe duck can explain more?