This string of tight measures has reduced participation in this auction to a minimum. Afterward, the CBI was accused of granting currency-trading rights to a limited number of companies and banks, which resulted in local-currency devaluation as dollars became scarce.
In an attempt to contain the damage, the CBI authorized a number of private banks to directly sell a specified number of dollars to Iraqi citizens for travel purposes and medical treatment overseas. This authorization allows whomever holds an Iraqi passport to buy $5,000 from private banks once per month, according to the CBI rate of 1,118 Iraqi dinars to the dollar. This practice has become lucrative.
The exchange rate in the Iraqi black market still stands at around 1,225 Iraqi dinars to the dollar, a difference of seven dinars per dollar. Therefore, the long queues in front of private banks have become a normal occurrence. In some occasions, currency traders have offered to rent passports from individuals so that they can purchase more currency.
The CEOs of some private exchange companies claim that the banks authorized to sell US dollars are dealing with intermediaries in exchange for undisclosed commissions. These allegations, however, have yet to be proven. Officials from the CBI and private banks have refused to comment.
Amin Abbas, a member of the Financial Committee in the Iraqi parliament, said that “the CBI takes full responsibility for the fall of the exchange rate of the Iraqi dinar to the US dollar because of its restrictive measures in granting permits to exchange companies. The process, therefore, has become limited to specific companies. Some companies are taking over the process of hard-currency acquisition from the CBI as a result of the restrictions imposed by the CBI’s administration,” he added.
Yeah, 80% of the dollar auctions for some months were 100% money laundering for Syria and Iran. With some stamps, imagine what a commission some people have made.
It was the threat of USA to treat Iraq as Syria and Iran what stopped that flagrant money laundering program called dollar auctions.
Well, you see some improvements factually happens in Iraq
It is important to be specific and precise. Currency auctions are held in many countries, developing and developed. So it should not be called in question.
What should be called into question is
A)the Acting Governor, Abdel Basit Turki Saeed who by the way is still the the head of the Bureau of Supreme Audit. How can he be Governor of the CBI and the supreme auditor, this is a major question that needs to be answered?
b) When banks come to exchange dinars for dollars, these dollars can be used for imports, for investments outside the country or simply for savings and investments inside the country. Normally you cannot take more than USD 10'000 outside Iraq per person, so if millions were smuggled out to Iran & Syria, what was the ministry of interior (controlled by Al-Maliki by the way) doing? Because clearly the CBI does not have a police or armies at airports and borders.
c) How come the AML head which is independent from the Governor of the CBI (at least during the previous administration)never alerted anyone on any transaction?
d)Abdel Basit Turki Saeed who is heading the bank and auditing it said the USD 800 million was smuggled out weekly though the Auction. That has become a farce since he took office. If it were true, why has he been selling just as much on a weekly basis?
e) Why is the USD 1 = 1270 IQD when it used to be USD 1 = 1196 IQD during the previous administration?
f) Can we really trust the Abdel Basit Turki with the figures he comes up with given that he does not know how to calculate the precise amount of gold the CBI has in its vaults? He made huge mistake end of 2012 which surprised many MP's who knew about it only later.
You see the question above tend to show us that it is not the CBI or auction process that must be called into question, but how it is now being administered, not the same thing.
Dear Jassam,
Better questioning than stating facts. You have plenty of common sense and I know that common sense in Iraq is not so common!
I am wondering whether any of you have an opinion on whether the Dinar will RV any time soon. There seems to be much talk about it, but not on this site?
Dottie, the only sites talking about the Dinar "RV" scam are ones that sprung up in recent years run by the same scamming salesmen & Dinar "pumper guru's" who get rich from talking it up (off the rip-off spreads). Serious investment forums like this don't talk about it because it's a well known scam debunked years ago that specifically targets amateurs with zero experience in Forex speculation, and tries to keep them looking for "secret intel" on heavily censored and controlled forums. The forum owners even lie about their own names, eg, "Adam Montana" (who runs "DinarVets") is actually James Wolf. "Phoenix" was involved in the CMKX penny-stock fraud pump-and-dump scam. They are chronically dishonest people.
There is no "RV" in the sense you'll become a millionaire just from changing $1,000 USD into Iraqi Dinar and then back again into $ USD, and never has been. All that does is lose you 20% in buy/sell commission fees. Virtually all the "secret intel" that "guru's" and "personalities" come out with is just made up fantasy with a perfect track record of failure, year after year since 2003, mixed in with genuine but irrelevant facts to sound plausible (eg, "unemployment is down", etc), fake conspiracy theories (which change month by month), wrapped up in language designed to create an unhealthy "anticipation addiction" keeping people "hooked" on forums where everyone wants to feel special about "knowing a secret" rife with ego-stroking, and knowing which "emotional buttons" to push (patriot community, religion, 'the world needs to change so it must be true', etc), none of which have anything to do with the currency's real-world valuation.
What Iraq are planning in the real world is a currency redenomination (a "lop") similar to what Turkey (and 70 other countries) have gone through. They have stated this over and over about 26 times since 2009 alone. Basically, 25,000 current Dinar will turn into 25 New Dinar, but it will have a 1,000x higher ratio (both worth about $21). So, eg, instead of having 1,000,000 Dinar at 1165:1 vs the $ (worth $858), it would be 1,000 Dinar but at 1.165:1 vs the $ (still $858). It all balances out (as it has to).
Read the below linked excellent posts (particularly Barry's at the top of the page, and both of Dr. Keiferland's a few posts below them) explaining the confusion and "junk economics" behind the "RV" sales pitch (as many others have before) and why it's a mathematically impossible scam:-
https://www.iraq-businessnews.com/2012/08/29/7-questions-for-dinar-speculators/comment-page-11/#comment-157698
The only people making money on the Dinar currency are those who sell 1m Dinar ($850 worth) of Dinar for $1,000 to Western amateurs, then rebuy those 1m Dinar ($850 worth) back from people waking up to the scam for about $800, then do it all over again, and again, and again with the same notes to new customers sucked into the "make $1m from $1k overnight" scam. That's why people like "Ali" of Dinar Trade is now a millionaire from selling Dinar, whilst those buying & holding Dinar for 10 years still haven't broke even when commission fees & inflation are taken into account...
It probably isn't what you want to hear, but in short, the whole 99,000% RV thing is a mis-selling scam and has been all along. Best of luck to you.
you guy`s on here still don`t get it the people of iraq will have more buying power those holding actual notes will exchange them back o us dollars for the rate iraq post`s!
"2collectg" trouble with you people is that you never been in Iraq and absolutely ignoring ME population internal social thinking.
John Richardson telling it as is! Sorry.
LOL… talking about not getting it. All reports out of Iraq are that the CBI can’t even maintain the official rate of 1160 because the people of Iraq don’t want to hold dinar. They want to exchange their dinar for dollars. Obviously the people of Iraq have not fallen for this ridiculous scam.
The same can be said for all the participants in these currency auctions. All of the participants are buying dollars from the CBI. They are selling their dinar back to the CBI for dollars. If there was any little bit of truth to this made up fantasy RV, then it would be the exact opposite. The CBI would be overrun with request to buy dinar.
Sad thing is it only take the slightest little bit of common sense to see this, yet many people continue to fall for the scam. The worst being those that have been involved for years and still can’t see that they are being played.
so when IQD RV??? hmm...
Mama... It's RVing every day. It's going down in value as speak.
Stew
The Iraqi people don't use the Dinar because it is a worthless currency why would anybody use it in commerce, obviously the worlds reserve currency at this time is the U.S dollar which they use as a default currency. First lets look at the facts June 27th 2003 sanctions where lifted by UNSC and a full exit of chapter 7 requires and internationally tradeable currency keep in mind the Iraqi Dinar is artificially being traded at a worthless rate, and that was due to the sanctions. At the point they "reset the currency" the true value will emerge. Now with Basel III banking procedures worldwide, they will base their currency on assets of the country (Iraq is very rich in crude, diamonds, gold, natural gas, and their economic growth is 9% per year.) The potential/upside is incredible. How do you explain the Kuwait revaluation, and the millions people in the know earned. Yeah it is a different scenario and the wait was alot less, same concept buy low exchange high (oh wait that must of been a dream, nothing to see here, move along.) Keep in mind the Global Currency Reset is tied in with Dinar RV so that complicates the playing field, yet we wait and see who is right.
I wont even address Mr. Richardson's comments since he will be in a fetal position begging for mommy because he did not participate in the scam...
Qdon - "keep in mind the Iraqi Dinar is artificially being traded at a worthless rate"
Back in the real world, the exact opposite is true - the market value of the Dinar is under 1200:1 - less than the 1166:1 pegged rate as can be seen even on the CBI's own website.
Qdon -"How do you explain the Kuwait revaluation"
ROFL!!! There was no "Kuwaiti RV":-
Average Exchange Rate of Kuwait Dinar Against U.S. Dollar (Fils):-
1986 – 290.53
...
1990 – 291.24
1991 – 289.19
1992 – 293.30
1993 – 301.32
1994 – 297.62
1995 – 298.46
...
2013 – 284.69 (Today’s value)
Timeline:-
- Iraq invaded Kuwait on Aug 2nd 1990 and tried to replace “Series 3″ Kuwaiti Dinar with Iraqi Dinar.
- Kuwait was liberated by the end of Feb 1991.
- Kuwait issued new post-war “Series 4″ banknotes on March 31st 2001, and completely demonetized “Series 3″ banknotes by Sept 30th 1991.
- Kuwait later replaced post-war “Series 4″ banknotes with more modern “Series 5″ banknotes on April 3rd 1994 (due to better security features), and demonetized “Series 4″ banknotes on Feb 16th 1995. Series 5 notes are still in use today.
At no-point did any “Kuwaiti RV” take place despite two lots of banknotes changes. The KWD did not fluctuate internationally in value by more than about 4% from Series 3 notes in pre-war 1990 to Series 5 notes in 1995. In fact, today’s 2013 Kuwaiti Dinar vs USD is barely 2.1% higher than 1986′s value! All that happened was a temporary spike in Kuwait's internal black market value that had zero impact on its international value.
KWD vs USD chart dating back to 1986:-
https://upload.wikimedia.org/wikipedia/commons/2/2d/KWD_against_USD.PNG
Qdon -"I wont even address Mr. Richardson’s comments"
That's quite simply because you can't...