BAGHDAD — The Iraqi Central Bank is planning to redenominate the national currency in an effort to ease transactions and allow people to carry less paper money, RFE/RL’s Radio Free Iraq (RFI) reports.

Mudhhir Muhammad Salih, a member of a Central Bank advisory panel, told RFI that a plan has been made to remove three zeros from the currency and phase out the current banknotes late this year.

Salih said by the end of 2010 the new banknotes will be fully introduced while the old banknotes will be gradually removed from circulation. He did not specify when the new notes would be issued.

Both will be legal tender in Iraq until the old notes are completely withdrawn.

Iraqi officials have had a long-running plan to redenominate the Iraqi dinar. In 2006, the Finance Ministry recommended to the Central Bank that it carry out such a plan.

Salih pointed out that banks are having a hard time accepting cash savings and deposits, but by dropping the zeros it will make it easier for both the banks to deal with their customers and for the general public to carry money. He said some 80 percent of Iraq’s money supply is cash in circulation.

Salih added that in 1990 the value of banknotes in circulation was about 25 billion Iraqi dinars but is currently some 25 trillion dinars.

Economic analyst Hilal al-Tahhan told RFI that the bank’s move is overdue. He said he expects the currency change to go smoothly because of the decision to allow both the old and new banknotes to coexist, leading to less turbulence in the economy.

The current exchange rate is 1,167 Iraqi dinars to the U.S. dollar. Radio Free Europe/Radio Liberty © 2010 RFE/RL, Inc. All Rights Reserved.
http://www.rferl.org/content/Iraq_Planning_Currency_Redenomination/1950504.html

January 27, 2010
S T R A T F O R
GLOBAL INTELLIGENCEI

Iraq’s Oil Ministry on Jan. 27 signed a final deal for China National Petroleum Company (CNPC), Total of France and Malaysian state firm Petronas to develop the southern Halfaya oilfield, Reuters reported. Halfaya holds about 4.1 billion barrels of oil in reserves; CNPC is the primary partner. CNPC and its partners have promised to increase output to 535,000 barrels per day (bpd) from a current level of 3,100 bpd.

The Governor of the CBI is expected to cut interest rates

Central bank governor said: that is likely to cut its interest rates from the current rate at seven percent, but the size of the reduction will depend on inflation.

Shabibi ruled out in a press statement to the Iraqi economy suffered any problems because of the elections scheduled for next March.

The Iraqi Central cut interest rates to seven percent from nine percent in June to fit with the decline in the rate of inflation.

He added that it was likely to be less interest rate of seven percent, but stressed that it would depend on the rate of inflation to growth and that will be monitored so closely.

Shabibi said: that monetary policy impact on developments in inflation and added that the central bank has managed to reduce inflation through monetary policies.

He said inflation fell to about 6.0 percent. Although the inflation index for consumer prices stood at 9.2 percent early last year.

Shabibi said that it expected growth of the Iraqi economy, which depends on oil production. Expectations of the International Monetary Fund came in at 5.8 percent.

Shabibi expected to end violence once more economic growth and rising income levels.

http://articlesofinterest-kelley.blogspot.com/search/label/Iraq%20Banks

Iraq will be ‘big player’ at OPEC meet: US diplomat
Sun Dec 13, 11:18 am ET
BAGHDAD (AFP) – Iraq will be a “big player” at OPEC’s meeting in Angola later this month over its allocated crude production quota following a string of deals with oil majors, a senior US embassy official said on Sunday.

The Organisation of Petroleum Exporting Countries meeting in Luanda on December 22 will come shortly after Baghdad set ambitious output targets at a Friday-Saturday auction of Iraqi oil field contracts to foreign energy firms.

“They’re going to have to negotiate with their OPEC partners on that one,” the official at the embassy in Baghdad told reporters, on condition of anonymity, referring to Iraq’s production aims and its OPEC quota.

“They’re going to be a big player that wants to come back to the table, so they’re going to have to negotiate with Saudi Arabia, Iran, Venezuela and the other OPEC members.”

Iraq currently produces around 2.5 million barrels of oil per day (bpd). But after awarding seven contracts to foreign energy firms at the auction, following three more deals sealed since a first auction in June, it aims to ramp up output to 12 million bpd within seven years.

Since economic sanctions of the Saddam Hussein era after his 1990 invasion of Kuwait, Iraq has been the only OPEC member not bound by the OPEC quota system and the cartel’s overall output ceiling of 24.84 million bpd.

The US official added there was still time for OPEC to reach accord on Iraq’s quota, as it would be several years before the country will be in position to hike output to its targeted levels. “This isn’t like suddenly tomorrow (Iraq is) going to be producing 12 million barrels,” the official said.

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The Gulf Cooperation Council (GCC) countries “are not threatened by Iraq’s plans to expand its oil production,” GCC president and Kuwaiti Foreign Minister Mohammad al-Sabah said Dec. 15, AFP reported.