Blog posts of '2012' 'August'

Dinar is served; Investors caught between Iraq and a hard place- Sunday, August 26, 2012

Dinar is served

Investors caught between Iraq and a hard place

Thousands of Main Street investors, fed up with a stock market that has barely moved in more than a decade, are seeking out heftier returns in more exotic investments.

And then there is Ryan Williams.

Williams, 35, of Bakersfield, Calif., has abandoned US stocks and bonds for one of the chanciest investments on the map: the Iraqi dinar.

The small-business owner said he has been buying Iraqi dinars regularly since he was first turned on to them around 2005. His last purchase: just this month.

“There’s risk in anything,” he told The Post in a recent interview, explaining why he gave up US stocks and bonds in favor of the world of currencies. “I think our economy has shown us that.”

Iraqi dinar investing figures in the plot of “Hit and Run,” starring Kristen Bell, above, giving Hollywood heft to a potentially explosive bet.

Williams is not alone in investing in the currency of the war-torn country. There is a growing number of dinar devotees betting that the currency — currently pegged at 1,165 dinars per US dollar — could one day spike in value if Iraq’s new government gets on its feet, begins profiting from its massive oil supplies and revalues its currency.

The exotic investors point to currency spikes in West Germany following World War II and in Kuwait following its 1990 invasion as proof the strategy works.

The potential for riches has opportunity-hungry investors so eager for information that Paul Christopher of Wells Fargo said he gets more questions about the controversial paper than any other currency except, more recently, the euro.

“I don’t get many currency questions as frequently as I get questions about the dinar,” Christopher, the chief international investment strategist for Wells Fargo, told The Post.

Indeed, knowledge of the once-obscure currency trade is reflected in “Hit and Run,” a new movie starring Bradley Cooper and Kristen Bell.

Bell, who plays a university professor in love with a former bank robber, derides Cooper’s dinar deal as a “get-rich-quick” scheme.

Wells Fargo’s Christopher agrees with Bell’s assessment — and not just because of the ongoing geopolitical turmoil that could tumble the current government.

The Iraqi dinar isn’t held by US banks or traded by major currency exchanges, so interested investors must locate dealers who will deliver the investment in paper form.

That means higher risk for fraud, which has been increasing around this trade in recent years, according to warnings from the Better Business Bureau.

But it also means higher markups to buy the currency, plus storage fees. Selling the dinar could also be pricey, given the lack of big, institutional buyers.

At dealer DinarTrade, for example, buying 1 million dinars will cost $1,020, according to the website. But selling them back will earn you just $810, said DinarTrade founder Ali Agha, citing the unfavorable exchange rate by the Central Bank of Iraq.

Still, Agha, one of the few dealers rated favorably by the Better Business Bureau, doesn’t see interest in the trade fading anytime soon, given the degree to which mom-and-pop investors — who make up the bulk of his clientele — have been burned by stocks and real estate.

“Main Street doesn’t believe in the stock market anymore,” Agha said.

CBI’s Saleh: Draft bill over deleting zero’s stuck in the house awaiting approval; Will pass after political whirlwind ends- Saturday, August 18, 2012

CBI’s Saleh: Draft bill over deleting zero’s stuck in the house awaiting approval; Will pass after political whirlwind ends

The Central Bank announced that the draft will delete zeros inside the House and the Prime Minister after what he called a “whirlwind.”

He appearance of Bank Deputy Governor Mohammad Saleh told correspondent/JD/draft delete zeros will pass within the Chamber of Deputies and Ministers shortly after the end of the “whirlwind”, noting that all agreed on the importance of clusters and its usefulness for the Iraqi economy.

Saleh said “national projects as delete zeros interest many officials and advisers will not be deprecated, noting that the next phase will be adopted permanently.

Saleh said that “what prevents adoption project is having fears among some politicians from the timing of the project think that the project affects the General State of the economy negatively, this is incorrect, however, the Bank believes that it is necessary to respect the political wills and waiting a period of relative calm in which the project was more appropriate.

The Central Bank estimated the cost of speculative delete zeros from the currency up to 172 billion dinars.
According to a study prepared by the special project delete zeros received/JD/copy: total cost of the project to delete zeros speculative around a hundred and seventy-two billion dinars “.

The Bank said that freight and insurance of course role to Baghdad international airport by border (140), calculated on the basis of the ratio between the highest and lowest price (90-189) billion dinars of the offers made by companies. “Speculative cost to mint coins of the new currency of mineral (16) billion dinars”.
The Bank said that “the wages of cargo, Fridays and holidays, overtime …Etc (15) billion dinars “.

He said the cost of the campaign and miscellaneous costs around 1 billion dinars. He recalled the Bank cost replacement operation for the period from 15/10/2003 until 15/4/2004, where wages and move towards currency printed (240) dinars minted coins, remuneration within the mineral (16) billion dinars, a ring total costs for banks (13) billion dinars.

IMF Press Release: IMF Approves Seven-Month Extension of Stand-By Arrangement for Iraq- Thursday, August 2, 2012

IMF Press Release: IMF Approves Seven-Month Extension of Stand-By Arrangement for Iraq

IMF Approves Seven-Month Extension of Stand-By Arrangement for Iraq
Press Release No. 12/286
August 3, 2012

The Executive Board of the International Monetary Fund (IMF) approved on July 20, 2012—on a lapse-of-time basis1—a seven-month extension of Iraq’s Stand-By Arrangement (SBA), to February 23, 2013.
The SBA had been scheduled to expire on July 23, 2012. The extension, which had been requested by the Iraqi authorities, will provide them with time to implement the policy measures needed to complete the combined third and fourth reviews under the SBA. The extension will, in particular, provide time for discussions on fiscal policies for the remainder of 2012 and on measures to improve the functioning of the exchange regime.
The two-year Stand-By Arrangement (SBA) in the amount of SDR 2.38 billion (about US$3.58 billion), was approved by the IMF's Executive Board on February 24, 2010 (see press release 10/60). The IMF's Executive Board completed the first program review on October 1, 2010 (see press release 10/373), and the second review on March 18, 2011 (see press release 11/90). At the time of the second review, the program duration was extended by five months to July 2012, along with a rephasing of program disbursements based on a shift in financing needs. Total resources currently available to Iraq under the arrangement amount to the equivalent of SDR 1307.24 million (about $1.96 billion).
1 The Executive Board takes decisions under its lapse of time procedure when it is agreed by the Board that a proposal can be considered without convening formal discussions.

Bankers are preparing the country’s entry of global banks a real incentive to invest- Tuesday, July 31, 2012

Bankers are preparing the country’s entry of global banks a real incentive to invest

Translation: welcomed banking experts to enter the international banks of the country by opening branches fixed it, pointing out that it would pay the wheel of investment as well as the introduction of technology of modern banking.

announced that Arab banks to open branches in Baghdad and the provinces, while there are international banks other Kalawrobeh and American

Expressed willingness to open branches in Iraq during the coming period. The director of government banks in the Ministry of Finance Crescent Taan entry of international banks of the country by opening branches in a profitable business for both parties because the investment market in Iraq in need of capital-in the foreign banks as the latter aims to achieve profits.

said Taan (range): The sector banking system in Iraq is Ghaderaly keep pace with evolution in fact the investment witnessed in the economic sectors, pointing out that it is necessary to enter the banking world as it has large amounts of capital that will promote major projects as well as create competition with local banks in addition to training Iraqi personnel in place.

and called on the government to the need to legislate legal protection of these banks as well as tax exemptions.

to the counting banking expert as Abdul Hadi Central Bank Law New catalyst main entry of these banks of the country, pointing out that their presence will support expertise to a large extent through the transfer of technology advanced banking to local banks.

said Abdul Hadi’s (long): The banking system in Iraq has seen significant outage to keep pace with evolving global banking is the latest state of confusion in Iraqi banks is very large, pointing to the need to issue instructions by the central bank provides to direct banks to invest in addition to the adoption of methods of credit long-term.

For his part, said financial expert, Farouk Ramadan (range): The work of international banks in Iraq is a clear indication of the strength and durability of the Iraqi economy, explaining that he had not been affected by spring Arab.

He Ramadan: The cash reserve achieved by the Central Bank amounting to $ 60 billion has not been achieved on Iraq as well as to the seriousness of the decisions of the Central Bank increased the capital of the banks that have had a significant impact on the willingness of international banks to enter Iraq.

Meanwhile, the economic expert, Bassem Jamil Anton that the global crisis and economic recession, which witnessed some European countries during the recent period and the need of the country for construction, reconstruction and investment projects to make the banking world are racing to open branches in Iraq, noting that it seeks to take its role in funding projects and benefit from the profits realized, pointing out that it will be transferred international experience in banking to banking sector which leads to the development and promotion.

said Anton Iraq has elements of great economic is mineral-extractive existing in the ground such as oil, gas and phosphate, in addition to the investment environment fertile that are lacking most of the world, prompting the investment companies to come for the purpose of investment, bearing in mind that international banks started to open branches in Baghdad and the provinces.

He added that the world in a state of saturation for projects and service construction, there has been a worldwide economic depression, while Iraq because of war and the siege imposed on it in the nineties of the last century, led to an urgent need for infrastructure projects, service and health projects and processing power, making the eyes of corporations and international banks tend to Iraq out of the global economic crisis.
It is reported that Abu Dhabi Islamic Bank and the banks of the Lebanese and Kuwaiti announced in the last period to open branches in Baghdad and the provinces, while there are banks, other global Kalawrobeh and the U.S. expressed its readiness to open branches in Iraq during the coming period.