“…This reminds me when I was operating in Pineland…”
Well, I knew after the last publication that I would receive correspondence from readers and I do appreciate all of them, which brings us to this publication.
Iraq Currency convertible or not convertible?
In October 2003 to January 2004 we all know the new Iraqi dinar was first introduced during the days of the Coalition Provisional Administration (CPA). During this time there was a web site listed as an information web site and if you have never been there you should visit as there is a wealth of information there for you.
If you log onto the link below you will notice information about the currency exchange and a question and answer page.
From the web site:
Question: Will the new currency be convertible into other currencies?
Yes. The new currency will be convertible into other currencies at the market exchange rate that prevails at that time.
Question: Can dollars also be exchanged for new Iraqi dinars? What will be the conversion rate for dollars?
Dollars will not be converted directly into new dinars during the official exchange. Following the exchange, dollars will be convertible directly into new dinars at the market exchange rate. New dinars will also be convertible into dollars as well as other currencies at the market exchange rate.
Question: Will it be possible to exchange currency outside of Iraq?
No. The only official currency exchange locations will be located within Iraq.
The Iraqi Dinar currency is convertible to those currencies commonly associated as internationally traded currencies, such as U.S. Dollar, Euro, Canadian dollar, Swiss Francs, U.K. Pound, and Australian dollar. The CPA web page mentions the converting the New Iraqi Dinar into other currencies.
CPA Order 43, Section 3, Paragraph 4, mentions the New Iraqi Dinar is legal tender inside Iraq.
Issue of New Iraqi Dinar Banknotes
Paragraph 4) New Iraqi dinars shall be legal tender within Iraq, effective on the first date of the conversion peroid.
Iraq has a convertible currency just only inside Iraq to other foreign currencies. If Iraq did not have the Trade Bank of Iraq and also the Import and Export Bank in order to purchase goods from other countries Iraq would not be able to purchase those products at all. Iraq would not have the ability to convert the Iraqi Dinar into other foreign currencies without those mentioned banks and the Central Bank of Iraq authorizing those transactions.
Another example that Iraq has a convertible currency but only inside Iraq is the published article in the Iraq Directory web site. The Central Bank of Iraq denied placing any restrictions on foreign currency exchange transactions. The article was published 9 August 2009. So if the article is true than no foreign currency is being restricted inside Iraq to include the foreign currency U.S. Dollar. As you can read from the article the exchange of Iraqi dinar to a foreign currency is a guaranteed right by Iraqi law to every Iraqi citizen.
The October 1st deadline is being imposed only by the U.S. Military or soon to be U.S. Forces-Iraq (USF-I) after 1 Jan 2010, to start limiting the amount of U.S. dollars the military is bringing into the country as U.S. forces prepare to redeploy.
This does several things it reduces the U.S. military manpower it takes to account for and track the finances for the warfighter freeing those support units to redeploy and causes the Iraqi people to rely less on those U.S. dollar revenue streams they have been accustomed too for the last six years. The U.S. dollar is not being outlawed or banned from Iraq and as I have mentioned before you will still be able to exchange Iraq dinars to U.S. dollars at any Iraqi bank or currency exchange.
One more thing if you walk into an Iraqi owned store the store owner does not care whether you use U.S. dollar or Iraqi dinar and if you use U.S. dollar and the store owner has the ability to give your change back in U.S. dollars he will and this has never been problem. For all those on U.S. Military bases well the command at your base will dictate what you can and can not do in regards to the U.S. dollars and Iraqi Dinar.
The Post exchange (PX) will continue to use U.S. dollars as I’ve mentioned many times before unless the U.S. Army regulations change the U.S. dollar is the only currency in use world wide at any AAFES establishment.
Read the article below:
Central Bank denies imposing restrictions on foreign exchange
Iraqi Central Bank denied the rumors about its intention to restrict foreign exchange and foreign currency transactions. An official source at the Central Bank said that the goal of airing these rumors is to achieve selfish gains for some speculators and damage the stability of the national economy.
The source added that the freedom of foreign exchange is a cornerstone of the economic rights of citizens guaranteed by law and consistent with the objectives of the monetary policy which aims at imposing stability and promote development and economic well-being, provided that it does not intersects with the law no.93 on combating money laundering and crime money as well as the financing of terrorism.
THERE IS ADDITIONAL EVIDENCE THE IRAQI DINAR IS A CONVERTIBLE CURRENCY FOR INTERNATIONAL PAYMENTS IN FOREIGN CURRENCY. YOU HAVE TO REVIEW THE CPA ORDER 56 CENTRAL BANK LAW AND I WILL PROVIDE THE EXACT LINK AND PAGE NUMBER.
CPA ORDER 56 CENTRAL BANK LAW
On page 18, Section 5 – Official Foreign Reserves
Article 27 Management of official foreign reserves
The First paragraph says:
The CBI shall conduct transactions in foreign assets and manage all official foreign reserves of the state consistent with international best practices and subject to the objectives of monetary policy. The board may invest such reserves in any or all of the following assets:
Continuing in Section 5 on page 19;
b. banknotes and coins in foreign currencies normally used in the making of international payments held by or for the account of the CBI;
c. credit balances that are payable on demand or within a short term in foreign currencies normally used in the making of international payments and that are maintained in accounts of the CBI, or otherwise invested through repurchase agreements, with foreign central banks, international financial organizations or major international banks designated by the board;
The CBI can conduct transactions in foreign currency according to there CBI laws to date and have been since 2004.
When the Iraqi government purchases and imports wheat from Australia and they have in the past the Australian government would most likely would want payment in Australian dollars and not in Iraq dinars and as I have shown the Iraq dinar is only tender currency inside Iraq. The Central Bank of Iraq (CBI) is responsible for international payments as you have read in the preceding paragraph.
As you can see for yourself converting Iraqi dinar for international transactions has and is currently being done as I write this not as an Internet Newsletter however, as the American Contractor Newsletter.
Iraq and the World Trade Organization
We can all agree Iraq does not have an international tradable currency however, this will not impede from successfully joining the World Trade Organization (WTO) in the future. The example I can show is Cuba which continues to have sanctions to this day against it however, did not stop from successfully joining the WTO in 1995. Other countries that also do not have an international tradable currency is Saudi Arabia, Jordan, Israel, and Argentina who are all active members of the WTO.
In September 2005, the Iraqi government applied for acceptance into the WTO and to date hold the status of Observer until the application and requirements have been met for acceptance into the WTO organization.
WTO URL Iraq Observer Status
“…There are Tents in Baghdad with money…”
I can not make this stuff up as rumors are running rampant about tents in down town Baghdad. I do know this…there are no tents in Baghdad handing out those phantom small denominations of Iraqi dinar any where.
News Clips from various Arab Media Sources
Central bank warns government over cash transfers
The Central Bank of Iraq (CBI) has warned that the government’s policy of pressuring the bank into issuing cash transfers to finance its expenditure will damage the bank’s ability to fight inflation. Iraq has recently been suffering from inflation and related economic problems that might endanger production and reduce standards of living, according to a CBI statement. (Aswat al-Iraq, Arbil, in English 1537 gmt 20 Sep 09)
Parliament Speaker criticizes “neighbouring countries”
Council of Representatives Speaker Iyad al-Samarra’i has criticized neighbouring countries’ “continuing interference” in Iraqi internal affairs. In a speech delivered on the occasion of Id al-Fitr, Al-Samarra’i called on neighbouring countries to “stop any negative interference”, adding that there should be international supervision of regional security. (Al-Iraqiyah TV, Baghdad, in Arabic 0900 gmt 21 Sep 09)
Iraq to pursue moves to hold international tribunal
The Iraqi government has affirmed that it will continue its activities aimed towards setting up an international tribunal to investigate the bombings that took place in Baghdad on 19 August. In addition, as Iraqi government spokesman Dr Ali al-Dabbagh told Al-Sharq al-Awsat, “the quadripartite meetings between the foreign ministers of Iraq, Syria, Turkey and the Arab League will continue. It was decided in Istanbul to hold more meetings in New York.” (Al-Sharq al-Awsat website, London, in Arabic 20 Sep 09)
MP Al-Askari loses defamation case
The Iraqi Federal Court of Cassation has upheld a libel and slander verdict against MP Sami al-Askari for accusing the Foreign Ministry of corruption and failure. The verdict also orders Askari to financially compensate Foreign Minister Hoshyar Zebari for “moral and material damage he has sustained”. MP Al-Askari, from the United Iraqi Alliance (UIA), is a member of the parliamentary Foreign Relations Committee. (Aswat al-Iraq, Arbil, in English 1645 gmt 20 Sep 09)
PM vows to pursue bombers
Iraqi Prime Minister Nuri al-Maliki has vowed to pursue and punish the perpetrators of the “bloody Wednesday crime”, including “Ba’thist and takfiris and all those who belittled the sanctity of the Iraqi blood”. In a statement on the occasion of Id al-Fitr, Al-Maliki also reiterated his condolences to the bereaved families. (Al-Iraqiyah TV, Baghdad, in Arabic 1700 gmt 20 Sep 09)
Ramadan celebration is over as nonessential offices will be closed until Thursday re-open than shut down again for the Friday prayers and start back up on Sunday. Don’t get your hopes up on anything spectacular happening any time soon as the next big event is the U.S. Iraq Business and Investment Conference in Wash. D.C. in October as the PM Maliki and the Iraqi delegation will be attempting again to obtain badly needed funds in the form of pledges and investment. The current economic climate it’s going to be tough to get anything.
This is all for now and for sure there will be more to follow…
IMPORTANT IRAQ DATES
SEPTEMBER 8, 2009 – NEW INCOMING PARLIAMENT HOLDS FIRST SESSION
OCTOBER 16-17, 2009, GETENERGY FOR IRAQ 2009, ISTANBUL, TURKEY
OCTOBER 20-21 2009, U.S. IRAQ BUSINESS AND INVESTMENT CONFERENCE
OCTOBER 24, 2009 – NATIONAL CENSUS RE-SCHEDULED TO 2010
OCTOBER 2009 – INTERNATIONAL COMPACT WITH IRAQ – BAGHDAD
DECEMBER 7-9, 2009 IRAQ PETROLEUM CONFERENCE LONDON U.K.
DECEMBER 31, 2009 – DEVELOPMENT FUND FOR IRAQ (DFI) EXPIRES
DECEMBER 2009 – ARTICLE 140 VOTE
JANUARY 16, 2010 – IRAQ REFERENDUM VOTE (SOFA SECURITY AGREEMENT)
JANUARY 16, 2010 – NATIONAL PARLIAMENTARY ELECTIONS
OCTOBER 2010 – NATIONAL CENSUS RESCHEDULED
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