Just a brief update on where we are in regard to the rv….
I think Iraq is really in a bind. Shabibi from the CBI stated last month that he will not RV the currency until the Iraqi government is done. Which then would be considered harmony with the Sunni’s, Shiites and Kurds. Today, the Maliki GOI is not complete as 3 minister positions and the Strategic Council remain non-ratified by the Iraqi Parliament. These are considered contentious and seems little progress towards a resolution has been made. Though they continue to work on these, it seems they are at least a week, maybe longer from achieving any result.
From the CBI’s point of view, they are ready to move forward and are balancing a delicate situation. Having started the process to “remove the 3 zeros” which is the larger notes from circulation, they have left many Iraqi’s unhappy with the inconvenience of the remaining notes to buy/sell on the street at the current exchange rate of 1170 to 1. This CBI process clearly was a step towards the goal of the revaluation of the dinar and the introduction of the new “small denomination” notes. But because of the lack of completion and effort from the GOI, this CBI effort seem to be stalled.
We see today a few articles that are encouraging the CBI to move forward, but clearly from Shabibi’s own statement in Dec, that will not happen. Shabibi has made his position clear . He knows the advancement of Iraq will not succeed unless this is a well-timed event that has the full support of the marketplace as well as a government that is fully supportive, operational, and complete. Here is a direct quote from him and it must be honored…
For his part, Dr. Shabibi Iraqi Central Bank Governor that “the political crises and economic conditions are interrelated, with regard to economic conditions that require some sort of extrapolation, forecasting, and policy formulation requires finding solutions to political crises and therefore, there is a link to a very large in terms of the causes of crises and their results and other matters relating to and only if the rest of the political crises fact any prediction of any economic planning will not be drafted without solving the political crisis associated with it.”
Here are the articles encouraging the CBI’s independence….
http://translate.google.com/translate?hl=en&sl=ar&u=http://www.marsadiraq.com/observatories/economic-obs/national-income/899-2011-01-12-08-48-15.html&prev=/search?q=nahrain&hl=en&client=firefox-a&hs=bh9&rls=org.mozilla:en-US:official&rurl=translate.google.com
http://translate.google.com/translate?hl=en&sl=ar&tl=en&u=http://www.ikhnews.com/news.php?action%3Dview%26id%3D6822&rurl=translate.google.com
To conclude, what we are seeing here is the political process stalling the economic development progress of the country. To a point that the CBI’s own RV preparations are now causing problems with Iraqi citizens. The GOI must step up it’s efforts and get done what it needs to accomplish in the coming days for Shabibi to then finish the project and RV the currency. IMO, this is still possible in the month of January.
No comments:
Post a Comment