The Central Bank of Iraq made some changes to how it operates in reference to the banks and money changers inside Iraq. In late April, the CBI decided to impose a tax on all currency exchanges (as previously mentioned in my 5 May email newsletter). The CBI auctions experienced a downturn after imposing the tax on the banking institutions and all the currency exchange markets.
The initial intentions were good; however this slowed the everyday commerce in the banking industry causing far less transactions of foreign currency exchange. CBI was attempting to force Iraqi’s to not conduct foreign exchange transactions hoping to increase the Iraqi dinar value. When the CBI observed its several hundred million a day auctions plummet they made the executive decision to raise the tax limit to 50k for all foreign currency transactions. After this decision the Iraqi people ramped up the CBI auctions once again.
Seeing that the CBI has appeared to reverse their initial plans, my associates are saying that there will not be an RV in the month of May 2011. Regardless of the fact that the CBI has completed the Revaluation Re-denomination report. The CBI is also still waiting for PM Nuri Maliki’s request to have the report delivered to him. Unfortunately, my sources are confident an RV will not be possible this month.
The dinar currency projection from the recently published CBI annual report, soon to be published internally for the ministries will also coincide with no RV (May 2011).
Today, I got some additional, interesting information. The new Iraqi currency has been placed on hold. With the excuse being that with all the recent activities & transitions of the CBI bank (as well as the Iraqi government) it has just not been printed. I know this may be conflicting with what some of you have been told on some forums/blogs but this is factual & up to date information. There are no bills at this time. The printing of them is on hold.