_More great hints as to the CBI's strategy were revealed late last week.  One article was very forth coming and said the target exchange rate in the near term will be 1150.  What is very interesting is the fact that they are limited to a 2.5% change over 90 days due to current sanctions.  A 2.5% change would put the rate at 1140.  Another article suggested a target of a 3.4% change which would put the rate around 1130.  While we believe this was a typo (should have been 0.34% to reflect the 1166 rate), we are very excited that it appears the CBI has begun it march toward its stated ultimate RV rate of $1 to $1.3.  Look for changes in the rate toward 1150 in the short term until the CBI's hands are untied.

The problem right now is that the CBI is constrained as to how fast it can move the rate due to chapter 7 and the lack of passed laws to support the ultimate RV value.  Several articles gave an indication as to timing.  The budget HAS NOT been approved and it was indicated it could be a month before it was.  Erbil was also reported as being very close with a vote in Parliament 2-3 weeks away. The only reported timing for chapter 7 by the UNSC is June.  The great news is all these issues are progressing and seem to have priority.  Could they all resolve themselves this week - of course !  Will it happen this week - not probably given the past history of Parliament.  We maintain that the minimum time for resolution of these issues is mid to late February.  We report, you decide.

_
kaperoni: Today’s chat is a “What is the CBI up to?” chat.

kaperoni: I wanted to take a shot at this rate change. I am not an economist, but I do have tactical skills as a researcher and think there are some interesting assessments that can be seen with this rate change. Though somewhat speculative, only time will tell if I am right.

Kaperoni: Article…

kaperoni: The Central Bank raise the price of the Iraqi dinar against the dollar by 3.4% - 19-01-2012

kaperoni: We all know the CBI adjusted the rate of the dinar yesterday. Some .34% (3.4%) as stated in the article title. This is the first time in 3 years that the CBI has done such a thing, and Shabibi has maintained in the marketplace an 1170 to $1 rate. Thought this seems nominal, it may have significant meaning in the Plan. Let’s take a look at a few quotes from this article….

kaperoni: “the Bank worked to raise the prices of the Iraqi dinar against the dollar during the sessions for the sale and purchase of foreign exchange by four dinars and by .34%  to up to 1166 dinars to the dollar,”

kaperoni: To the citizen, this is meaningless. We're talking about 4 cents on a $100 purchase at this exchange rate. So, IMO, there is little or no effect in the marketplace. And especially when we know from the previous chat the extensive efforts to “dollarize” the economy in recent weeks. This next quote seems to imply we may be close to the RV…

Click "Read More" on the right to get the full scoop : ) _

Kaperoni has a theory on "what is the CBI is up to?" and will discuss the recent exchange rate move in the DinarAlert Chat Room today.
Please join him in the DinarAlert Chat Room at 4pm CST for this chat. 

Chat Room limit is 200.  Please arrive early to make sure you get a seat.

Pizza Buffet at 3:30.

Med:   CBI IS UPSET AND THEY ARE NOT WHINING THEY NEED TO GET OUT OF CHAPTER VII IN ORDER TO TAKE FULL ADVANTAGE OF BEING A SOVEREIGN NATION WITHOUT ANY SANCTIONS OR RESOLUTIONS
IT INHIBITS TRADE

AND ALSO AS THE OTHER ARTICLES STATE
IT PUTS THEM ON THE BAD BOY LIST
...
WHICH IS NOT REALLY LONG GANG
IT IS IRAN
NORTH KOREA
SUDAN
SYRIA
AND CUBA
AND IRAQ

AND ALSO...
Click "Read More" on right to get the full scoop...  :)