PM Maliki & Pres. Barzani

News leaked from the meetings that Talabani and Barzani had reached an agreement on solving the current problems within the principles of the Erbil Agreement. Talabani and Barzani have pointed to the significance of meeting with Iraqi leaders until an agreement is reached on how to tackle the problems that have brought the country’s political process to a standstill.

The Iraqiya bloc attended four of the five Erbil meetings. Dr. Fuad Masoum, head of the Kurdistani Coalition in Iraqi Parliament, told Rudaw, “The last meeting cannot be considered part of the preparation for a national consensus meeting since one of the major parties did not attend.”

Massud Barzani - President of Kurdistan

When the President of Kurdistan Government, Massud Barzani went to the United States to visit with U.S. officials in Washington D.C.. I am sure he was shocked at the U.S. response. The F-16 plane deal would still go ahead as planned.  Barzani said that he feels threatened if PM Maliki had access to them.  Let’s look at this realistically.

Iraq has a professional Army of several hundred thousand soldiers. They have over 200 new American M-1 tanks also bought from the U.S. government. Doesn’t Barzani feel threatened by the M-1 Tanks?  Doesn’t he feel threatened by the professional Iraqi Army?  The same Iraqi Army that crushed the Mehdi Army (Militia) in the south?

The Kurdistan Region stopped producing Oil in the Northern Region.  This will not hurt the Baghdad Central Government as the Oil exports in the south have increased and this will take up the loss from the North.  As I have said in my video Podcast 17 April the Kurds just shot themselves in the foot.  They will come crawling back to the Central Government as they do every year.

The Kurds are wanting funds from the Iraq Central government to pay the Oil companies that are operating in the North.  The Central Government wants their money from all the Oil smuggling that has been going on for years.  Billions of dollars worth.

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The Prime Minister of Iraq recently returned from Iran. You have to ask what will the next several months be for the Iraqi people.

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Iraq’s Southern Oil Exports Surge In April
http://bit.ly/HZzuyN
Shahristani: Kurdistan surprised by the decision to stop Iraq oil exports
http://bit.ly/HKs7ri
Source: Central Bank Governor did not escape
http://bit.ly/HOaTcQ
Deputy Governor of the Central Bank to leave Iraq after his resignation
http://bit.ly/HQ8Mr0
Finance intends to call the parliamentary Central Bank Governor on the back of currency fluctuations
http://bit.ly/HKsphX
CBI to print currency in Iraq; Council of Ministers intends to ask to postpone the new currency in the market
http://bit.ly/HIIZU0
Iraq’s Maliki accuses of seeking to dominate the central bank to help Syria and Iran
http://bit.ly/cjuou6
10 illegal money exchange companies reason for higher dollar prices, Araji
http://bit.ly/HZzUVJ
Central Bank governor left for Monetary Fund Meeting, not fleeing, sources
http://bit.ly/HR7Cz7
Iraq Deplores ‘Currency Attack’ as Dollars Flow to Syria, Iran
http://bloom.bg/yLcEFx

Iraq Dinar Currency

There are several articles published recently that are mentioning the Central Bank of Iraq (CBI). Who by the way, are scrambling to control the outflow of U.S. Dollars in the market.  The CBI has put in place the restrictions for the banks and the money exchange centers however, this has not solved any of the problems. Unfortunately, criminal gangs and other entrepreneurs are continuing to gain more U.S. dollars to send to both countries of Iran and Syria.  Both countries are under sanctions and their currencies are depreciating rapidly.  The U.S. dollars are also in the streets of Iraq as the confidence in the Iraq dinar is not as high as it has been in previous years.

In January 2012 the CBI announced that everything was fine with the Iraq dinar and now in April, you have the dinar depreciating against the dollar.  The Governor, Shabibi will have a lot of explaining to do when he meets with the Council of Ministries.

When the Iraqi government gives the go ahead or authorization to the print the new currency the two (old & new) will co-exist with the current 2003 Iraq Dinars. Note that this will increase the money supply.  I have previously mentioned this (see posting from 1 March) and now it has been confirmed by the Iraq news media.  Also, contrary to what some may be thinking, the new currency will carry the same exchange rate.

The project to print the new Iraq currency has been placed on hold. Prime Minister Malki has signed resolution stating the project will be suspended if not canceled.  The Iraq government is very concerned about the elements inside Iraq who are undermining the economy of Iraq.  The department of Cabinet Affairs in the General Secretariat of the Council passed a resolution to stop all procedures on the changing of the new currency until further notice.

Here is something to think about, if the CBI had all the authority why did the Cabinet Affairs have to pass a resolution to stop the process?

On another note, all of the council ministers are in support of Nuri al-Maliki, the current Prime Minister of Iraq.  These Minister’s are loyal to Maliki and will continue to support him.

Prime Minister Nuri al-Maliki has the unwavering support of Iran and the USA as the leader of Iraq and will seek a third term in 2014.

Central Bank of Iraq

The Iraqi courts have already ruled that the Central Bank of Iraq is under the jurisdiction of the Iraq government specifically the Prime Minister’s Cabinet.  Prime Minister Maliki is attempting to reshape the Central Bank of Iraq starting with upper management.  The hard currency in Iraq which is the U.S. dollar is appreciating against the local currency as merchants are continuing to buy and sell in U.S. dollars.

Governor Shabibi is negotiating his departure from the Central Bank of Iraq along with other senior members of the CBI.  We will see departures in the management of the CBI by the end of the year.  It is rumored that they will be leaving the country.

The Iraqi dinar is being seriously undermined by Iran and Syria who are in need of U.S. Dollars to skirt the international sanctions.  You will see a continued weaken Iraq dinar in the months ahead.

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Iraq Dinar Currency

Iraq currently is still a cash based society.   The Iraqi’s have very little trust or faith in the banking system.  The article states that, 80 percent of the Iraqi’s do not have bank accounts.

If the Iraqi government plans to create jobs and increase projects for the reconstruction development a sound and strong banking system is needed.

There is always speculation that a big western bank will be coming to Iraq to assist in the reconstruction projects.  This still remains to be talk and speculation.

The article mentions how the Prime Minister, Nuri al-Maliki is controlling the banking system.  An example of this is what occurred with the Trade Bank of Iraq last year.

Meanwhile, the Iranian oil that was bound for India has now been canceled.  Iran is unable to sell any oil to India because of the sanctions.