There are a few points and observations that the American Contractor would like to make in reference to the Central Bank of Iraq and what the esteemed Dr. Shabibi is currently doing. First, Dr. Shabibi has not given any interviews on Iraqi TV discussing the topic of the Iraqi Currency in recent weeks nor months. Dr. Shabibi refrains from making any public statements to any media and only allows his Public Relations Rep to handle those topics which are sensitive in nature. When it comes to Iraq, it seems that any kind of trivial comment snowballs into an out of control rumor. Just to clarify and make it clear, the Central Bank of Iraq is not shredding the Iraqi Dinar as some would like to suggest and imply. There is absolutely no truth to this rumor.
The Arab League Summit will commence on 10 and 11 May and will be held inside the International Zone, formerly the green zone. Iraq is making some progress with continuing to clean up the streets and remove t-walls that lined up the streets. The GoI has several construction projects currently going such as apartments and hotels, all inside the International Zone. The Iraqi National Investment Board has recently stated that it has plans for investment in the next five years and has a budget of 180 billion dollars to spend.
The Agricultural Bank in Dhi Qar has announced that they will begin the service of issuing loans to Iraqi Farmers however, one problem exists. The Agriculture bank is requiring (like all banks in Iraq currently are) the collateral guarantee for the loan. This would be the deed to the farmers property and only when it is verified will the farmer be issued a loan. Unfortunately, there is a large percentage of Iraqi’s that have defaulted on their bank loans in recent months.
In other news, a Central Bank of Iraq spokesperson, Mohammed Saleh stated in an
article from the Alsumaria News that the project of removing the three zero’s is very close to being complete. The Central Banks plan will be reviewed by the Council of Ministries and then voted on by the Iraqi Parliament. After all this transpires, the Iraqi citizens will be educated about the new currency and it’s process of distribution. It is important to note that this re-denomination will have no effect on the purchasing power of the Iraqi dinar. This is not a LOP and definitely NOT the RV that everyone has been speculating about and watching for the last eight years. Do not misconstrue this as any form of my being negative, I am simply putting forth the facts and explaining it how it has been made to all of us here as also reported in the news.
Here’s an interesting tidbit. What most people do not know, but for the longest time, Iraqi merchants have already removed three zeros from prices of their goods inside their stores. For example, a can of coke in Iraq will cost you approximately 500 dinar. They now remove the two zero’s and the selling price is .50 usd. However, If you give an Iraqi merchant a $1.00 usd the Iraqi merchant will not give you back any change. They will keep your one dollar for the purchase of the can of coke. That’s just a policy they’ve seemed to be doing for awhile now.
In regards to the 52nd Iraqi Parliament session. Well, it was completed that part is true. However, it did not meet in secret as some are suggesting and implying. The Parliament attendance has yet to have the full 325 members. Some just will not attend solely because the government security does not allow them to carry their personal weapons inside the government building. This will be ongoing.
Other Central Bank News
The Central Bank is encouraging private banks to start merging or partnering with other banks in Iraq. However, there is a problem with most of the private banks. They do not want to relinquish control to the partnered bank. Most of the private Iraqi banks are family owned.
There are 27 privately owned banks in Iraq and half of these banks do not have 75 billion dinars in capital. How does anyone expect these banks to fund the reconstruction of Iraq?
Iraq commercial debts will be paid within the next year with the help of the International Monetary Fund and the World Bank according to the Mohammed Saleh of Central Bank of Iraq. I’ve stated before the Development Fund for Iraq will be the same as it is today just under a different name and still held in the Federal Reserve of New York.
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