Economist calls for the Ministry of Finance to take immediate action to prevent the collapse of the banking sectorPosted: July 25, 2011 by THE CURRENCY NEWSHOUND07.25.2011
The expert, who asked not be named, told the independent press (Iba) that the existence of a banking system integrated is one of the most important pillars of the national economy and confidence in him and encouraged to deal with it, which is the gateway to the development of all economic sectors, and is the basis for handling cash between individuals, companies and institutions at home and as well as its dealings with the outside. He also said the presence of a strong banking system in the country, encourage local and foreign investors to enter the investment market and give confidence to the national economy and guarantee in dealing with the State, whether with the public sector or private. He noted that the support of the banking sector Ahli encouraged to handle competitive, which is looking for business and private sector in general, and any blow to the banking sector, Ahli lose confidence in the banking system as a whole and lead to a decline in dealing with the various agencies and the reluctance of investors to enter the investment market and even contracts tainted by type of uncertainty and loss of confidence. The expert explained that the Economic Committee of the Council of Ministers and Central Bank of Iraq had a distinct position in their support to domestic banks through a decision of the Economic Commission of the Council of Ministers No. 188 on 6/4/2009, which allowed the ministries to deal with private banks without restriction or condition and also urged the finance companies Self-filing, opening bank accounts in private banks. Add to book the Iraqi Central Bank to the ministries and departments not associated with the Ministry of 09/12/2010 No. 9/3/711, which indicates that the central bank had the values of private banks, urges the concerned authorities to deal with it, and Egged legal or financial reasons not to do to deal with them to get the various banking services to serve public interests. The expert was surprised at the Ministry of Finance to issue instructions in 2009 to all ministries and departments not associated with a ministry that ran counter to the above decisions of the Economic Commission of the Council of Ministers and the central bank, prevented whereby all ministries, agencies and authorities from opening a bank account with the private banks out of hand and turn them into state banks (Iraq) under the pretext of maintaining public treasury funds of dispersion. He said in light of the decision of the Ministry of Finance, it started the problem of liquidity crisis in banks, as happened to the Warka Bank were to withdraw all government deposits, and suddenly and immediately resulted in the withdrawal of 800 billion Iraqi dinars within three months. He said the reason for the panic among the public, which led to the withdrawal of deposits by depositors companies, individuals and the reluctance of others to deal with the bank even declined to deal with him to the 5% and amounted to what has been withdrawn during the period amounted to 1600 billion dinars, the equivalent of one billion and five hundred million dollars. The expert said that the Prime Minister instructed after the complaint made by the Warka Bank to conduct the necessary protection of private banks, and the Legal Committee in the House had written to the Ministry of Finance said the decision was contrary to Article 25.26 of the Iraqi Constitution, and that any prevention of such things must be issued by a law. He was supposed then to cancel the Ministry of Finance its decision to prevent dealing with private banks, and supported again and requests from ministries and agencies concerned to support the banking system by dealing with private banks to encourage the establishment of new banks again, but this did not happen. The expert called on to a meeting between officials of the Ministry of Finance and the Central Bank and representatives of the advisory board of the Office of the Prime Minister with representatives of private banks in order to support the banks, and find ways to solve all its problems, to support the banking sector in Iraq, according to specific controls and clear. For his part, student director of the Warka Bank Government and the Ministry of Finance and the Central Bank to find solutions to derail the bank from its crisis under the guidance of the Prime Minister with the support of private banks, and pursuant to the Legal Committee of the Council of Representatives to reject the decisions of the Ministry of Finance as contrary to the provisions of the Constitution and rejected the decisions of the Central Bank as contrary to the provisions of the Central Bank Law No. 56 of 2004. He’s (IBA) could have collapsed bank collapse immediately, but the strength of its assets prevented, and in fact should commend this power possessed by the Bank Ahli Iraqis in such circumstances, where he remained steadfast request the support and assistance from government authorities and the central bank to rescue it from the problem that left the force. He was the hope that The Ministry of Finance and the Central Bank of serious support to the bank as a national bank, but that did not happen. The economic analyst Sadeq stapes has said that the Iraqi government still believes that the incentive package offered to foreign investors at the beginning of contracts, enough to make it able to overcome obstacles to his work with Iraqi banks, and the latter do not have sufficient funds to cover bank guarantees later. The stapes to the Iraqi banking system imposed on foreign companies commitment to bank guarantees issued by banks, Iraqi banks exclusively, which is inconsistent with the capacity of Iraqi banks to secure these guarantees. http://bit.ly/rg7r4t Iraq currency shops multiply as citizens trade IQD for USD; Officials say shops are flagrantly exploiting public ignorancePosted: July 20, 2011 by THE CURRENCY NEWSHOUND
Traders are involved in damage to the opportunity of the Iraqi economy .. Officials are turning their homes into shops for the banking pending delete zeros dinar With the approach of the countdown to reduce the zeros of the Iraqi currency by three zeros to the bottom step of the Central Bank of Iraq to rearrange the rules of the Iraqi economy, began to supported groups inside the Green Zone, assigned to currency traders collect and store a currency U.S. dollar in preparation for phase determine how zeros of the Iraqi currency and Tbdlleha to become a thousand dinars , JD and access to the numbers Alumblyaria that invaded the culture of the Iraqi economy. Source from inside the Green Zone, says that some of the condos with leaders and officials and officers turned to the banks not matching the specifications of the storage of financial because they were filled with U.S. currency the dollar, a gain is added to the dealers that it exceeds the profit rate of 100%, where it will be the amount sold by the Iraqi currency and buyer of U.S. currency The dollar is the same amount that it will buy the Iraqi dinar once again after the whistle of the Iraqi currency. This process has affected and three days ago at the level of trading of the currencies in central Iraq, but are invisible to this moment, but will cause major problems on the economic level for the next period. Traders the opportunity who make a living on such stages are active in damaging the Iraqi economy and raise the crisis between the people who started many of them converts from its own funds to the U.S. currency, an approach that is almost universal in the Iraqi markets are looking for safety in the maintenance of its financial resources by turning them into dollar and then deal with the new Iraqi currency, Valqnaah that prevail in the market now, that the process of replacement of zeros of the Iraqi currency, which goes to the government seeking its implementation during the period between the end of this month, and year. It is expected to break out conflicts and problems in society and in the Iraqi economy if the project was carried out without the education and promotion by the government in the media and open channels of its own government to alter the currency and not to rely on the black market and banking companies, which accuses currently being fed the subject of rumors about what will happen with if the project was implemented as a means to increase the chances of speculation by raising the purchase price of the dollar against the Iraqi dinar in the flagrant exploitation of public ignorance of the fact that a step the central bank. Economic circles demanded an integrated program for public awareness and transparent display of the program delete the zeros because these decisions are not just purely financial decisions, but is located in the heart of the daily life of citizens. http://wp.me/pZC7o-9pz Below is the link to a conference call that I believe is a must listen to, in order to help dissect and understand what the speech that Shabibi gave, really pertains to. About 50 or 60 minutes into the conference call a gentleman named Delta comes on who is of Iraqi ethnicity from what I am told and he really helps connect the dots.
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Here are some excerpts cut and pasted from Dinar Vets website from the conference call... dated 4-21-2011 at http://dinarvets.com/forums/index.php?/topic/63598-franks-cc-4-21-11/page__p__455482__hl__conference%20calls__fromsearch__1&#entry455482
John says: face to face afterward he spoke alone for a few min and he asked Shabibi what do you believe is the factor if the revaluation and will it occur sooner or later… would it be the forming of the GOI or something else ??– Shabibi said NO we do not need a GOI – and 5 factors and the chief among them is inflation factor – Shabibi also said their RE development and their commerce …..which again is tied into inflation
Five Factors Shabibi spoke of: 1. Sanctions 2. Depreciate currency – potential problem with inflation
3. Unemployment
4. A weak infrastructure – linked with development
5. Security which is out of his hands
Frank states by revaluing their currency would cause: 1. Sanctions to be complete – no more banana peels and Chapter 7 2. The currency would be of higher value – worth more 3. Jobs added – people working – unemployment will be wiped out 4. People will now be investing in building and all are working with a strong currency 5. Security problems are gone as they won’t need to fight with each other Inflation is a big driver and John sensed a lot more going on here…. Frank states - The two words that Shabibi mentioned the most is Stability and Inflation….now inflation is 5.7% according to the last results. – Stability will go out the winder of inflation continues to climb – touch 7% and you are in big trouble. Frank feels they are running out of time to get things done –we do not need NO STINKING GOI seated – only for being proper… they need to have a government when the revalue happens so there will be no scandals…. We do not need any laws to be passed to lift the 3 zeros and accepting the rate after its released we need the GOI only so that the rate can have a HOME and a purpose to represent a GOV of Iraq. In 2004 the currency was a rate of 3500 – Shabibi did an RV to 1700 and in 2008 he did another RV to 1170 where its at now and we had 3 RV’s already by Shabibi without a GOI or permission from them… once the inflation continues it will be embarrassing if they don’t RV. John-Bluestar States that with respect to parliament they com argue leave come arrive go on vacation its weird but will it get to a point they have to say enough is enough could someone say get it together or we are moving on – and according to Fran’s team the authors of the plan are very close…the budget has been signed 3 times and Shabibi said he WOULD raise the value very soon – that is huge – He said he doesn’t spend Money the GOI does and I have enough saved to increase our value – our inflation stability is being lost says Shabibi- and Frank says if they get to 7% inflation rate its not going to be good. Frank thanks John-Bluestar for interviewing Shabibi – what he said was very cool at not revealing his hand of actually where he is right now in this seemed to be... We will revisit more the idea of our exchange rate and I cannot say that revaluation depends on inflation and then he does ahhhhh and the many factors he states…weak currency increase the rate and weak currency goes away Delta comes on to speak now: When John asked Shabbi about the revalue Shabibi did answer in his own way but in the 2nd question… He did answer this about the cutting of the zeros – at the time he has high inflation now – but now he says to bring back the IQD they have to lift the 3 zeros – this is the first answer to the first question… he cannot tell you about a revalue but he did by saying lifting the 3 zeros… BRING BACK the IQD like it used to be and HOW – by lifting the 3 zeros VERY SOON he said –and delta says that’s the revalue… Shabibi wont’ say YES I AM GOING TO but he will say the other way around to explain – Shabibi is fluent in English but he was like having a hard time – not the Shabibi we know – WHY – he was surprised and shocked that the seminar was to talk to investors about Iraq Land 100% positive and ask folks to come – these questions were unexpected – Shabibi came to the USA – they had a meeting- closed door with the IMF and World Bank discussing the IQD on Monday…. Shabibi mentioned nothing about the GOV but we need security why – as we will deal with a lot of money in Iraq – He never mentioned anything about the draft to PM and then the Parliament voting or – HE SAID WE WILL REVISIT and control the inflation so that means very high revalue to control the inflation – but he shared this indirectly… Delta also says Shabibi,he is a very shy man and very smart and brilliant and he is an HONEST man and I tell you this – the guy is a nice man- when he comes to tell you its going to happen it will happen – a lot of articles came out to criticize the CBI and accused them of a LOP but that was not the case… nope not going to do that…. Darline says that they just need to RV then… Frank said: We told everyone to watch Shabibi and the next time we see him he would do what? Well we saw Shabibi and he said we will have revalue soon – that was very close to a rate almost… Delta states that Shabibi 3-4 years ago he was asked about the revaluation and in the near future – and he came out 3-4 times and now for him to come to the US – he had to come to meet with the World Bank an the IMF with MOF he got the finalization of the rate on Monday MONDAY - Shabibi got the blessing from the IFM and the WB BEFORE he was to speak at COC on investing in Iraq he had to be completely positive with their permission to RV – Rumors that Maliki signed off the rate are right 100% but only problem is that it was on Feb 28th he signed off on this rate not this week – it was over and then Shabibi came out he was going to RI the currency after that – it was said on Iraq TV at the time- nto this week – those rumors are very late….as Maliki ordered the economy to be reformed by the CBI – today and in the morning the news said that the custones between Iraq and Jordan for ground shipping so many trucks today they arrested some who tried to smuggle 600 billion dinar to Jordan - on TV was live on TV he was in charge of the Iraq customs he said 5 years ago a ot of people smuggled dollars but nto dinars but now today they are smuggling Dinars and not dollars now cause hey know that our currency is going to go up in value and they are right the stability is going to be in Iraq – it was live on TV the bank Securities Customs officer said it himself about this that the IQD is going to go up…600 million dinars – It’s all done says Delta, even the Securities next week on Tuesday Maliki is going to South Korea for 4 days and we believe that highly that the security ministries will be seated before he leaves to go… This time they agreed on all the ministries now and they are all done but to finish there is pressure to get this done – the HIGH rate will never come all the way to US to encourage investors to come to Iraq except he know what he is going on – revisit is a revalue and bring back the Dinars to a good level… Delta asks Frank, when someone says very soon – what is the definition of that – Frank states soon means 1-2 weeks – VERY soon means closer than that… Shabibi said VERY SOON … so Frank says we are looking at patterns – Historically when have we seen world reevaluations occur – the last Thursday of April….Maliki is doing his last nano second it seems to get this done – sly fox he is – but – 90%+ has happened the last Thursday of April each year – he needs his security before he leaves- the MOD and the MOI and the MOS are now working but they are not officially announced to make it a full GOI – if we go past Thursday he missed an amazing window of opportunity – Delta states that he feels when Shabibi said VERY SOON the way he said it – it was done in my opinion regardless of the ministers sitting and with this meeting on Monday with the meeting with the IMF and WB this has to be done – the IMF gave permission on the rate – this has to be done now… Worst case if he does not do this for another 2-3 months – can the world survive till then? June ends the DFI funds have to be done to have all issues finished with the IMF and UNSC… Shabibi's DC Chamber of Commerce Speech about Iraq's Economy
Shabibi mentions the word (inflation) 21 times before question number three takes place and he mentions the words (exchange rate) 17 times before the 3rd question.
Attached at the bottom is each transcript for each part of the recordings.
I make no
warranties to be word for word transcription, this is like trying to
translate Elmer Fudd! LOL! His English is not good in some places and he
uses the wrong words to describe things so I have to play it over and
over again to get what he is saying.
Keep in mind I don't think Shabibi came with a prepared monologue so that explains why he repeats himself so many times.
The (2) million dollar questions everyone wants answered are at the end of part 2 and the beginning of part 3.
Being
"when do you think a revaluation of the Iraqi currency will take
place?" and "Is Iraq going to remove the three zeros from their
currency?"
Apr 19 11
Today the U.S. Chamber’s Iraq Business Initiative hosted Dr. Sinan Al-Shabibi, Iraq’s central bank governor for a briefing at which he discussed Iraq’s fiscal and economic stability and progress that has been made to strengthen the country’s financial sector since 2003.
While stability in Iraq and the broader Middle East region is generally discussed in the context of politics and security, Dr. Shabibi instead underscored the important work of Iraq’s central bank to shore up stability through financial reform and modernization. Dr. Shabibi emphasized that while it is not the role of the central bank to finance individual projects, it is committed to ensuring an environment conducive to foreign direct investment through a stable currency and competitive, market based exchange rates. He stressed the imperative of foreign investment from the private sector driving Iraq’s critical reconstruction and development. The U.S. Chamber’s Iraq Business Initiative looks forward to working with Dr. Shabibi in the weeks, months, and years to come. We thank him for taking time out of his busy schedule to meet with us here today.
Iraq's Inflation hits 5.8%By Jaffar al-Wanan Iraq's interest rate has increased in recent months from a low of 3.3 per cent in December. Previous to that it fell from a high of 65 per cent in 2007. The ministry said compared with March: -Food was up one per cent. -Clothes were up 1.9 per cent. -Housing was up 0.9 per cent. -Fuel was up 0.8 per cent. -Household furnishing was up 0.2 per cent. -Medical care was up 1.3 per cent. The Iraqi Central Bank said in April that it expects the interest rate to stay below 10 per cent this year.
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BAGHDAD
(Iba) .. Expert called for the adoption of bank rescue measures
immediately to prevent the collapse of private banks in Iraq, which may
bring them back to square one and dissipate economic reform efforts
exerted for years.
