Tag Archive | "IQD"

Poll: ISIS and the Dinar Traders


Following the insurgency by ISIS/ISIL, and the declaration of a ‘caliphate‘ to be known as the Islamic State (IS), we have seen an increase in enquiries to Iraq Business News regarding the future of the country’s currency, the Iraqi dinar (IQD).

These enquiries typically come from people who have been persuaded to speculate on the currency by buying Iraqi banknotes, often in the hope of a stratospheric returns.

Many of these people, who like to think of themselves as ‘investors’ rather than speculators, genuinely expect to make a thousand-fold return on their money, and therefore are not concerned about the very wide spread between the current buy and sell prices, which can make this a very lucrative trade for currency dealers.

For those who promote the idea that the Iraqi dinar will revalue (or ‘RV‘, as they term it) to 1,000 times its current price, the increase in terrorist activity has several implications.

On one hand, it makes it more difficult to argue that Iraq is on the road to recovery, making the ‘Big RV‘ a more difficult sell. But on the other hand, it provides a useful explanation for why a revaluation, which they have been claiming was imminent for several years, will not occur any time soon. As a result, they can save face and extend the life of their business model. Meanwhile, others have argued that revaluing its currency would provide the Iraqi state with the strength it needs to fight the insurgents.  Read more …

Posted in Banking & Finance, InvestmentComments (0)

CBI Currency Auction Results, 24th July


By John Lee.

The Central Bank of Iraq (CBI) has reported that 9 banks took part in the first of its two currency auction on Thursday.

A total of $110,683,000 was sold at a price of 1166 Iraqi Dinars (IQD) per dollar.

In its second auction, 15 banks took part, buying a total of $185,890,000 at a price of 1166 Iraqi Dinars (IQD) per dollar.

(Source: Central Bank of Iraq)

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CBI Currency Auction Results, 23rd July


By John Lee.

The Central Bank of Iraq (CBI) has reported that 17 banks took part in its currency auction on Wednesday.

A total of $237,207,000 was sold at a price of 1166 Iraqi Dinars (IQD) per dollar.

(Source: Central Bank of Iraq)

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CBI Currency Auction Results, 21st July


By John Lee.

The Central Bank of Iraq (CBI) has reported that 8 banks took part in its currency auction on Monday.

A total of $101,354,000 was sold at a price of 1166 Iraqi Dinars (IQD) per dollar.

(Source: Central Bank of Iraq)

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Two Convicted in Dinar Scheme


By John Lee.

Two of the three men charged in a scheme to defraud investors in Iraqi currency were found guilty by a jury in U.S. District Court last week, while the third defendant was convicted only of an unrelated mail fraud charge.

According to a report from the Toledo Blade, Bradford Huebner (66) and Charles Emmenecker (67)  were convicted of conspiracy to commit wire fraud and wire fraud, while Michael Teadt (67) was acquitted on those counts and on three counts of structuring transactions to evade reporting requirements and one count of making a false statement to an Internal Revenue Service agent.

Huebner, the founder of BH Group, also was convicted on 30 counts of structuring, nine counts of money laundering, and one count of mail fraud.

Federal prosecutors said the men had collected millions of dollars from investors by feeding them lies and half-truths about the get-rich-quick scheme that never materialized. In he witness stand the three testified that they purchased dinars for themselves with the full belief that one day the Iraqi government would revalue its currency, making them quite wealthy.

Huebner argued that he was engaged in a legal business, while Emmenecker and Teadt claimed they had no direct connection to the BH Group and never profited from the sale of dinar.

Sentencing is expected in the fall.

(Source: Toledo Blade)

(Dinar image via Shutterstock)

Posted in Banking & Finance, SecurityComments (30)

Why Two Exchange Rates?


By Mark DeWeaver.

Since the Central Bank of Iraq (CBI) began changing the rules for its USD auctions in 2012, Iraq has been operating a de facto dual exchange rate system. (There’s a summary of some of the CBI’s recent rule changes on pages 12-14 of this report from Sansar Capital.) For those with access to the CBI auction—mainly banks and (as of March, 2013) importers using letters of credit—the rate has been fixed at IQD 1,166: USD 1.00. For the rest of us, the dinar has ranged from 1,194 to 1,292, with two major episodes of depreciation in mid-2012 and mid-2013 (see chart).

The ostensible purpose for this arrangement is to limit illicit outflows of foreign exchange to Iran and Syria. In practice, it serves mainly as a subsidy to banks, large importers, and anyone in a position to generate phony trade documents. The losers include everyone from foreign investors in Iraqi stocks to the government itself, which gets the CBI rate on its oil-export revenues.

Iraq is unusual in this regard. Dual (or even multiple) exchange rates are usually only found in countries suffering from chronic trade deficits and foreign exchange shortages. Typically the objective is to make foreign exchange available for “essential” imports or to control inflation by lowering import prices. Examples include Hitler’s Germany, China in the 1980’s and early ‘90’s, Burma prior to 2012, and Venezuela today. (See this note from the Asian Development Bank for an excellent introduction to this topic.)

It’s hard to see why Iraq belongs on this list. The country has a trade surplus, inflation is low, and the central bank has ample foreign exchange reserves. Even USD outflows to Iran are presumably no longer a major issue.

One exchange rate should be enough.

Posted in Investment, Mark DeWeaver on Investments and FinanceComments (11)

APRIL FOOL: IBN Reporter Wins Award


By Nora Lenderby.

Iraq Business News is pleased to announce that our intrepid reporter John Lee has been honoured with an award from the Goldman-Rothschild Institute for Monetary Efficiency.

Although no formal announcement has been made, we understand that the award relates to the maintenance of monetary stability in Iraq.

At first Mr Lee was reluctant to discuss the award, which was conferred at a private ceremony at the organisation’s underground headquarters deep in the Swiss Alps, but when pressed he said it was given in recognition of his efforts in helping to limit the number of beneficiaries of the recent thousand-fold revaluation of the Iraqi Dinar (IQD).

What people don’t yet know,” he said, “is that the ‘Big RV’, the Global Currency Reset (GCR), has already happened, and the big players have all cashed out. That door is now closed – job done. We’ve turned our billions of dollars into trillions of dollars.

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The Truth Behind #WeAreThePeople


#wearethepeople has been tweeted more than four million times in the past three weeks.

It looks like an anti-government protest, but who’s really behind it?

The Trending team investigates how financial ‘gurus’ are using the hashtag to encourage people to buy Iraqi dinar.

Click here to listen to the report from BBC.

(Source: BBC)

(Iraqi Dinar image via Shutterstock)

Posted in Banking & FinanceComments (104)

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