Iraq: Sell bonds for dinar

11-14-2013 Kaperoni:   Article: “Central Bank plans to issue bonds in local currency for the first time since 2003”

Yesterday, the CBI announced they were going to sell bonds denominated in dinar for monetary policy! This is huge as they are going to use this tool (bonds) to lower the market rate. Sell bonds for dinar, creates demand for dinar thus increases the market value (lowers the spread between official rate and market rate).

Keep in mind this plan has nothing to do with the official rate of the dinar. This is an “in country” issue. The bottom line is, nothing is going to happen with the dinar till Iraq gets this rate in line with the IMF requirements. So were not going to see any movement or new exchange regime/Article VIII for at least 45 days…probably 90 days.

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