Iraqi Dinar Value Is Still Controlled By Iraq Central Bank Via Daily Auction System

The Iraqi dinar is the official currency of Iraq. The nation stays largely isolated from global financial markets. The nation has no real sovereign credit, there is small need for its money which stays thinly traded. All Iraqi property, including its money are viewed as currently being a very great financial risk. The Iraqi dinar value, or the Iraqi dinar exchange rate, is effectively determined through the central bank through it's US currency auctions. The Iraq dinar was initially launched in 1932 when Iraq grew to become independent from British rule. The dinar changed the Indian rupee that had been launched by the British following winning control of Iraq from Turkey in WWI. The Iraqi dinar continues to be a managed or controlled currency throughout its existence.

Initially, when it was first placed into circulation, the Iraqi dinar was pegged towards the British pound. By 1959 Iraqi nationwide wealth had proved to be more and more coupled with oil. Oil was priced and traded globally in terms from the US currency, so the Iraqi currency peg was altered within the path of the US dollar and stays so today. After the initial US Gulf Struggle and the imposition of UN financial sanctions, financial conditions inside Iraq worsened sharply. By 1993, inflation had rocketed to an amazing yearly rate of more than 1000 percent, unemployment was at a massive fifty percent and also the Iraqi dinar exchange rate dropped considerably. Throughout 1994, it required about 2,500 dinars to buy one US dollar. To help the dinar, numerous measures had been launched in 1996 such as new regulations allowing Iraqi citizens to own overseas money financial institution accounts.

Following the 2nd Gulf War, new preparations had been created to take effect on 15 October 2003 to issue a new Iraqi dinar and to manage the Iraqi dinar exchange rate. Since those new arrangements have been launched, the Iraqi dinar value has steadily increased. The current exchange rate is 1,170 dinars for 1 US dollar. Figures published through the Central Intelligence Agency (CIA) in its World Fact Book display the number of Iraqi dinars needed to purchase 1 US dollar was at 1,475 dinars in 2005, 1,466 in 2006, 1,255 in 2007, 1,176 in 2008 and 1,170 in 2009. All indicators point to the presently prevailing exchange rate gradually increasing in the not too distant future.

Iraq just lately quantified its confirmed raw oil reserves at 143 billion barrels, in comparison with Saudi Arabia with 265 billion barrels of confirmed reserves. The nice part about these reserves are that they are effortlessly accessible and as a result the oil is cheap to produce. Roughly 95% of all Iraqi export value is derived from crude oil.

In the long run, as political balance returns to Iraq, its financial programs gains efficiencies and its citizens capture the full value of the national crude oil wealth, the Iraqi dinar value might be anticipated to strengthen considerably over its current trading valuations.

There are other sources and articles on the subject of Iraqi dinar value listed below.

Buy Iraqi Dinar - Iraq: Arrests made in ministry truck bombings

Iraq: Arrests made in ministry truck bombings


Story Highlights


Wednesday bombings of Finance, Foreign Affairs ministries killed more than 100


Iraqi official says suspects were arrested two hours after attacks


11 high-ranking security officials from the Iraqi army and police detained,
August 21, 2009 -- Updated 2003 GMT (0403 HKT)


BAGHDAD, Iraq (CNN) -- The Iraqi government said Friday it has arrested members of a cell believed responsible for Wednesday's truck bombings in which more than 100 people were killed.

Workers clear the site outside the ministries of Finance and Foreign Affairs in Baghdad.


Maj. Gen. Qassim Atta, spokesman for Baghdad Operations Command, appeared on Iraqi state television Friday night to announce the arrests, which he said were made within two hours of the bombings in the capital city. Those arrested include people believed to have planned and executed the attacks, Atta said.


It was not immediately clear how many people were arrested.
Initial investigations show a link between the cell and the ousted Baath regime of Saddam Hussein, Atta said. Authorities are also seeking people thought to have provided cell members with logistical support and identification, he said.


Iraq Security Forces recovered a truck Friday with five tons of C-4 explosives in the Abu Ghraib area, on the western outskirts of Baghdad, Atta said Friday night.


More than 500 people were wounded Wednesday in the six explosions in Baghdad.


In one attack, a truck bomb exploded outside the Ministry of Foreign Affairs. The blast blew through the front of the building, sending some vehicles flying and leaving others in mangled twists of metal in the area, which is just outside the restricted International Zone, also known as the Green Zone. Another truck bomb went off outside the Ministry of Finance building.


Authorities said Thursday that 11 high-ranking security officials from the Iraqi army and police were detained for investigation.


The Iraqi government in the past has made claims of arrests that did not hold up. In April, it said it had captured Abu Omar al-Baghdadi, the head of al Qaeda in Iraq's umbrella group, the Islamic State of Iraq. The Islamic State of Iraq denied it, and the capture was never confirmed by the U.S. military.


The explosions made Wednesday the country's deadliest day since the United States pulled its combat troops from Iraqi cities and towns nearly two months ago and left security in the hands of the Iraqis. The U.S. military remains in a training and advisory capacity in those areas and continues to conduct combat operations outside cities and towns.


Iraqi Prime Minister Nuri al-Maliki ordered increased security measures, including more checkpoints and more stringent vehicle searches across the capital, government officials said on Thursday.


The Iraqi government has been trying to restore what it described as normalcy to the streets of the capital in recent weeks. Al-Maliki ordered his government to take down within 40 days the concrete blast walls that line Baghdad's streets and protected neighborhoods at the height of the war. Many Iraqis have criticized the move as premature.

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Saddam's palace still tells a story

Tim Albone, Foreign Correspondent

Last Updated: March 23. 2009 8:30AM UAE / March 23. 2009 4:30AM GMT

Schoolchildren tour Saddam Hussein’s Babylon palace, which retains little of its former glory. Tim Albone for The National

BABYLON, IRAQ // It sits atop a man-made hill overlooking the ancient city of Babylon. In its prime – with its swimming pool, Roman-inspired columns, chandeliers and bathrooms complete with jacuzzis – it was a testament to the gluttony of the Baathist regime.Today, gutted and looted, Saddam Hussein’s three-storey palace that overlooks the Euphrates River only hints at its former glory. The windows are smashed, the chandeliers broken and the swimming pool empty. The furniture is gone and the walls are covered in graffiti. Even the toilets have been removed. It serves as a graphic reminder of the pillaging and looting that went unpunished and unchecked after the US-led invasion of 2003.

Whereas once Saddam would have entertained guests and heads of state with sumptuous feasts and lavish parties at the estate, today schoolchildren visit. “They want to see how Saddam lived and how bad he was with the people. If you go to Hillah [a nearby town] you will see the small houses,” said Hussam Kadhim, 44, the manager of the site. He hopes that by showing the palace, decrepit as it is, the inequality of the former regime can be highlighted. While the ruler lived in luxury, most of the population remained poor.

Mr Kadhim, who works for the local government, said plans were under way to redevelop the site and turn it into a conference centre.He said it could, if security improved, even draw people from abroad for conferences. With its proximity to the ancient city of Babylon, luring archaeological buffs is another possibility.“They have a plan … and they [the government] are giving us the money to renovate.

Mr Kadhim estimates that to get the palace back to its former glory would cost about seven billion Iraqi dinar (Dh22 million).Already nearly 1,000 people a day come to visit and pay 1,000 dinar just to look at the building and to have a picnic in the grounds. Although some out-of-towners have visited, the majority come from nearby Hillah. Despite security concerns – a suicide bomb killed 10 people in Hillah this month – redevelopment has already started at a rapid pace. Chalets that used to house soldiers from Saddam’s special forces and presidential guard have been turned into hotel rooms. For 200,000 dinar you can rent a room complete with private bathroom, widescreen television and king-size bed.

Mr Kadhim has already had Ahmed Chalabi, the former deputy prime minster, as a guest. He hopes that, in time, the proximity to Baghdad and the luxury will draw couples and honeymooners.“It wasn’t even in my dreams that one day he [Saddam] would be gone and people could come here. They would have been arrested,” said Mr Kadhim, who worked as a government employee under Saddam.As the site has opened up it has offered some remarkable insights into the megalomania of the former ruler. The man-made hill, on which he built his palace, was placed on top of some of Babylon’s ancient ruins.

“They are lost forever,” said Abdul Satar Naji, 46, the security manager at the site.Then there is Saddam’s date tree. No different to the hundreds of others that dot the grounds except that it is surrounded by a concrete wall. “It was Saddam’s date tree and he made people take special care of it, only he could eat from it,” Mr Naji said.The bricks inscribed with immodest poetry about the “great Saddam” hint at his arrogance.

The Americans, who occupied the palace until 2005, have left their own mark. “To my Mom and Dad Happy Mothers/Fathers day. From Saddam Palace 30 April 05 Love your son Roy,” reads one scrawl. “Hooah”, says another in reference to the army’s battle cry. A third says: “Brian loves Brandy.” The crude graffiti adds to the sense of frustration felt by those who work at the palace. Not only did the Americans come in and draw on the walls, looters were allowed to take millions of dinar’s worth of fixtures and furniture immediately after the invasion and right under the American’s noses.

“The Americans allowed people to take everything,” Mr Naji, said. Despite the massive redevelopment needed, Iraqis visiting the site were happy just to marvel at the sheer size of the palace.“When I first visited I couldn’t believe how big it was. I got sick walking up the stairs,” said Mr Naji, the security manager.“I’ve been here three years and I can’t tell you how many bedrooms or bathrooms there are.”

“Before we were prevented from coming here, we just heard about it on TV,” said Saha Shokil, a headmistress, who had brought 250 pupils to visit.Ali, 21, a student, dressed in a smart suit, said: “It’s bigger than I thought. I can’t imagine how he lived.”His friend, Mohammed, 20, also a student, said: “It makes me angry. Saddam used to live here and we were poor.”

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Iraq finance minister resists budget cuts

Wed Mar 4, 2009 8:28pm IST

By Ahmed Rasheed

BAGHDAD, March 4 (Reuters) - Iraq's finance minister on Wednesday rejected a bid by parliament to cut the 2009 budget because of slumping oil revenues, but lawmakers said they remained determined to slash spending by up to 10 percent.
Minister Bayan Jabor told a heated, four-hour meeting of parliament's finance committee that the $62 billion budget for this year should be passed as it is, despite being based on optimistically high oil prices.

The finance minister argued that parliament could cut back spending plans in June in a supplementary "negative budget" if oil prices, from which war-battered Iraq gets more than 95 percent of its revenues, remained depressed.

"We want to keep the budget as it is," Jabor told Reuters. "We insist on keeping the budget as it is because we have investment projects that should continue ... and the government has already cut the budget by around $7 billion."

Lawmakers, however, said they were not convinced and would push for a vote on Thursday on two similar proposals, either to cut 10 percent -- 7.4 trillion dinars ($6.2 billion) -- or to cut 6.8 trillion dinars ($5.8 billion) in spending.

The Iraqi government is in a bind. It is being starved of revenues just when it desperately needs money to rebuild after the years of bloodshed unleashed by the 2003 U.S. invasion.
If the government fails to restore services, equip its armed forces and improve the lives of Iraq's 28 million people, there could be a resurgence in violence, some analysts warn.

Lawmakers say a lot of money is being squandered by government entities and the budget cuts can be implemented without affecting investment spending.

Iraqi Dinar

Latest Headlines Regarding Iraqi Dinar

• Oil price slump starves Iraq of funds


• Inflation slips to 9.2 percent


• 7.5 pct GDP growth in 2009 optimistic but attainable


• Iraq undecided on new IMF standby arrangement
  

By Missy Ryan and Wisam Mohammed

BAGHDAD, March 5 (Reuters) - The slump in oil prices will force Iraqi officials to make more sober budget decisions at a time the country is seeking to rebuild from years of war and fuel broad-based growth, the central bank governor said.

Iraq relies on oil for more than 95 percent of revenue and Prime Minister Nuri al-Maliki's government is already grappling with tough decisions as it looks for ways to reconcile today's oil price outlook with spending priorities crafted last year.

"There will be a difficult transitional period, but it should give us an idea of how to take a more realistic attitude toward allocations and demands from the various sectors," Sinan al-Shibibi said in an interview late on Wednesday.

"Of course, this occurs at the wrong moment because of the fact that Iraq actually needs to embark on huge projects and it will affect that. There will have to be reshuffling of the budget, and between investment and consumption."

An original plan to spend $80 billion in 2009 has already been shaved to $62 billion, but further cuts are likely needed.

Lawmakers have been sparring for weeks on ways to cut costs without jeopardizing plans to undertake urgently needed reconstruction projects and provide basic services -- all while avoiding stoking instability by cutting public sector pay.

INFLATION DROPS

As Iraq emerges from the worst of the sectarian and insurgent violence unleashed by the 2003 U.S.-led invasion to oust Saddam Hussein, it is now focusing on creating jobs and plans to rebuild a shattered economy.

Shibibi said core inflation, which shot as high as 35 percent in the chaos after 2003, had dropped to 9.2 percent now.

The bank has pursued a strong dinar policy, Shibibi said, in order to curb core inflation, which excludes fuel and transport. Iraq holds currency auctions through which it sets the exchange rate.

Iraq is also striving to reverse the dollarization of its economy since 2003. Today, the dinar is "very much in demand, and we think this is good for the economy and good for combating inflation," he said.

As inflation subsides, the bank has cut its policy interest rate to 11 percent from 14 percent in January, Shibibi said.

But with retail lending still scarce, the bank's policy rate is seen mainly as a signal to banks in setting their own rates rather than the transactional tool it is elsewhere.

"We want now to encourage investment and lending in general but (the policy rate) will depend - I don't want to give an idea of the direction - on the results of inflation every month."

Shibibi said lending in Iraq's banking sector, still largely isolated from the rest of the world, was picking up, mostly in financing trade and some personal loans excluding mortgages.

Increasing the availability of credit will be one key element for creating growth outside the oil sector, by far the biggest in dollar terms but which generates relatively few jobs.

Shibibi said the International Monetary Fund's December forecast for 2009 gross domestic product growth of around 7.5 percent was "probably optimistic" due to the global oil trend.

"On the other hand, it will be attainable because there will be a big endeavour ... to increase (oil) production," he said.

Iraq has been courting major investment in its oil fields, which contain the world's third largest proven reserves, but short-term help is urgently needed to update aging facilities and boost output that remains below pre-invasion levels.

NO IMF DECISION YET Shibibi said growth outside the oil sector, which the IMF expects will be 6 percent in 2009, "needs a lot of work".

Iraq has been spared much of the impact of the financial crisis due to its relative financial isolation, but it may be hurt by a slowdown in oil demand. Shibibi said that the growth of money supply in Iraq had probably slowed more recently.

Iraq has yet to decide whether it will seek another stand-by arrangement from the IMF, Shibibi said, but said such a decision could come when Iraqi officials meet shortly with the IMF.
Iraq is also due to begin repaying its remaining stock of Paris Club debt in 2011. Shibibi said he didn't expect that new obligation would pose a major problem.

"I really don't think it is very dangerous ... Of course the amount at the beginning will be relatively big, but we will have to manage that unless we restructure again," Shibibi said.
"The Paris Club debt was cancelled 80 percent, so we're talking about 20 percent. A few countries cancelled 100 percent, but the remaining debt from other creditors, we have to deal with that and probably there will be another restructuring." (Editing by Toby Chopra)

Iraqi Dinar Value And Exhange Rate Rises

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The Iraq Central Bank's sales exceeded 2 billion dollars in February

March 04, 2009

The Iraq Central Bank's adviser Mudhir Mohammed Saleh stated with regard to the high volume of sales during last January as "a result for the new contracts being concluded by traders for the importation of various types of goods in the first month of the year as well as the decline in commodity prices globally which urged importers to buy more."

Regarding the reasons for stabilizing exchange rates throughout the month of February he said "because of world prices declining of imported goods, which would give a value of Iraqi dinar against the dollar, even if we did not raise the value."

The sales were distributed on total cash demand of $ 561 million and 600 thousand dollars at the exchange rate 1176 dinars per dollar, which includes the commission of the Central Bank amounting to six dinars per dollar.

While foreign remittances recorded a size of request amounted to one billion and 801 million and 958 thousand dollars, at an exchange rate of 1173 dinars per dollar, inclusive of the Central Bank's commission amounted to three dinars per dollar.

While the daily demand recorded of 124 million and 397 thousand dollars during the 19 sessions were held during February, lower than last December which recorded 179 million and 698 thousand, during 17 sessions.

None of the February's meetings witnessed any offers for selling dollar by the contributing banks in the auction.

The central bank holds an auction of five sessions weekly from Sunday to Thursday for the sale and purchase of foreign currencies, and receives a commission for the cash sale amounted to six dinars per dollar, and a commission of three dinars per dollar for the remittances outside the country.(Source)AlSabah