The Central Bank of Iraq Rumors
After reading a few Iraq Dinar forums on the net, there is a perception that the CBI is transferring Iraqi Dinar currency to other countries to pay off debts or possibly depositing the Iraqi Dinar in interest bearing accounts in other countries.
If the CBI was indeed transferring currency to other countries to pay off debts or place in a deposit interest bearing account, it would do so only in US dollars and not in Iraqi Dinars. Doing so in Iraqi Dinars would violate the laws that are in place at this time.
In early 2005 the CBI made an announcement that it had deposited 5 billion US dollars inside the Federal Reserve in New York. This transaction was done in US dollars and not Iraqi Dinars. Keeping in compliance with current Iraqi Laws and maybe if at all any agreements made with the IMF and the World Bank.
The paragraph below is the law in regards to the Iraqi currency and the CBI.
CPA Order 56, Section 7 , para 1.1. The CBI shall have the exclusive right to issue banknotes and coins intended for circulation in Iraq. Banknotes issued under this Article shall be a first charge on the assets of the CBI. The CBI shall make appropriate arrangements for the issue of its banknotes and coins as required for circulation in Iraq. Banknotes and coins issued by the CBI and intended for circulation in Iraq are not promissory notes, bills of exchange, or any other type of commercial document under the applicable commercial law, and the CBI is obligated to honor them only as provided for in this Law.
Comments
Well then tell us why they are exporting dinar abroad
at the rate of millions of USD in dair daliy since May 23rd 2006 as posted on thier CBI web site ???
Posted by: Steve Taylor | June 9, 2006 1:08 AM
You are so wrong. That CPA law you quoted doesn't have anything to do/nore does it restrict foreign exchange of the IQD. All that mean is that only the CBI can issue currency in Iraq. In fact this same statement is in Iraq's new CBI law. The CBI statements on their website regarding the transfer of Iraq currency is pretty clear. Even the IMF has holdings of IQD. Point number two, Iraq now has its own Central Bank Law, read on:
Article 37 Freedom of currency Parties to a contract or any other voluntary undertaking or transaction, including a bill, note or instrument or security for money, may denominate a payment obligation in any currency
agreed upon. Payment in discharge of any debt or liability arising from a contract or any other voluntary undertaking or transaction, including on a bill, note, instrument or security for money, may be made in any currency agreed upon as the currency of payment. An
agreement under this Article may be express or implied from surrounding circumstances including course of dealing, usage of trade, or course of performance.
Article 38 Enforcement of foreign currency obligations A foreign currency obligation may be enforced according to its terms. When a person obtains an order to enforce an obligation in a foreign currency, the order shall require payment of an amount in the currency of Iraq sufficient to purchase the amount of the obligation in the foreign currency at a bank in Iraq at the close of business on the first day on which the bank quotes a dinar rate for purchase of the foreign currency before the day payment of the obligation is due to be received by the creditor, provided, however, that if thecourt determines that such method would, under the circumstances, be inequitable, it shall
select a method of conversion that is equitable. Do you your homework.
Posted by: Jimmy Dinar | June 9, 2006 1:30 AM