There has been some great news articles recently published in Baghdad. For those of you that rely on translators, I have one bit of advice for you, don’t put too much faith into the Arabic to English translators. Many of them create numerous errors and often lead to misinformation. I’ve seen this happen way too many times over the course of several years and have noticed it even more recently. My inbox has been bombarded with emails from readers whom have asked me to clarify or confirm something that has been translated only to discover that the information was completely false. In fact, many of the mistranslations of certain words have lead people to believe that a possible RV is around the corner. It appears that many of the mistranslations are in regards to certain news articles that the Central Bank of Iraq is about to change the currency and than an RV will occur shortly after. In my last emailed newsletter I stated that the re-denomination (if it does in fact occur) is not the RV that everyone is expecting. I have several of my own personal Arabic translators whom I trust and welcome any of my readers to email with their questions in regards to translations.
There are certain individuals and groups who have cast doubts on what is exactly going on with the Ministry of Finance and the Central Bank of Iraq. Speculation and debating are one thing, but to turn all that into fact is another. In any event, whatever is planned must first be brought forth in front of the Council of Ministries as well as the Iraqi Parliament for approval. I’ve been reiterating this for over three years now. In another possible case scenario, the Iraqi Parliament could also decide not to pass the new law of re-denomination which would then send the plan for the Iraqi currency back to the CBI and the MoF for alternative action. One has to ask one’s self and wonder, “if this is so good for the Iraqi people why do business organizations oppose the idea”? We have already seen Iraqi’s changing their Iraqi dinar currency back to dollars in order to preserve capital (as recently reported by Iraqi’s in the Dhi Qar district). An Iraqi named, Ahmed Al-Humaidi also an employee of LG in the electrical department stated, “the matter that concerns me now is to change my money from the Iraqi currency to the dollar in order to preserve capital.”
On another note, I would like to bring your attention to one specific headline that was recently in a Baghdad newspaper. The headline read; Parliamentary: the deletion of zeros from the Iraqi currency would overcome all the difficulties of economic. This article is significant and well worth the read. I gave a head’s up to everyone on 15 February when I made this comment on my web site.
From American contractor web site 15 Feb 2011
In regards to the Iraqi currency:
Expect the Central Bank of Iraq to be distributing the new Iraq dinar currency just after they complete their internal report. No one seems to know a completion date for the internal report so expect it to be ongoing and dragging on for a long period of time. From what I am getting on my end (here in Baghdad), Iraq will be following suit right along with the way the country, Turkey, handled their currency. Both the new and the old currency will be simultaneously in circulation. Don’t misunderstand this upcoming merge of currencies to be any indication or form of RV or RI as some would like to make you think (and WILL try to make you think). And, keep in mind that the internal report as I mentioned above, could be a lengthy process as is everything in Iraq.
I stated that the Central Bank of Iraq had a committee which was very close to being finished with their report regarding re-denomination of the dinar currency and upon completion would be submitting the report to the council of ministries. As of today, the report has not been completed and still is not in the hands of the council of ministries. One issue seems to be that, the Central Bank is continuing to collect feedback from various groups and experts who apparently are either opposed or against the re-denomination. There seems to be a great divide. I also reported that the process is an extremely lengthy one and could take some time. Also, in my post on 15 Feb, I mentioned that Iraq appeared to be leaning towards the same process and following suit with what Turkey did with their currency. Many of you are probably wondering how I have come to this conclusion. Well, I have always thought this was the route they may go and I recently got some confirmation of this thought process in the article with the headline;
CBI: The restructuring of the Iraqi currency inflation fit the cash block. (In this article there is a paragraph that gives an example to what to look for);
To that, the adviser to the Central Bank of the appearance of Mohammed Saleh, said that such fears are unwarranted, and that the economic situation in Iraq is good and able to withstand the application of this project, and that this experience had previously been applied in countries such as Turkey, which has by deleting six zeros from the currency before the period is not too distant future.
The article gives an example country, Turkey. Is it more than just a coincidence? I think not.
I have very close and tight contacts within the banking industry in Iraq and they have not been wrong as of today with the information that they have shared and provided to me. The information comes to me months prior to being made public in many times.
Important dates to note; 5 May, which involves the mechanism for the Development Fund for Iraq. The 5th of May is an important date to watch for news about the DFI and the future mechanism. I did state on several occasions that the DFI Fund will remain in New York at the Federal Reserve and will be called by a different name. This is what my contacts are saying as of today, but this could very well change. After all, this IS Iraq.
19 May 2011 – Responses for the Gas Exploration contracts
30 June 2011 – DFI renamed Account still held in New York
10 Oct 2011 – Oil & Gas Trade Mission Energy Basra Iraq
11 Sep 2011 – Kurdistan Regional Government elections
Contrary to what is being said on some forums, the governor of the Central Bank of Iraq did not go to the Switzerland business conference. How do I know this? Because on the date where he was reported to had been there I was in an unrelated meeting where he was present. Pretty difficult to be two places at once. However, he will be present in Washington D.C. for the business community on 19 April. Also, the Arab League conference that was expected to start in Baghdad next month will more than likely be postponed again for sometime in 2012.
American Contractor is a professional working in the area of operations and currently living in Baghdad, Iraq. American Contractor can be reached at the contact details below. American Contractor appreciates all comments and feedback and responds to all communications.