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Groovgal Post: Oil Production & It’s Influence On The Value of the IQD
2011-04-14 10:49:29
Posted: April 12, 2011 by THE CURRENCY NEWS-  in Iraqi Dinar/Politics
Tags: Business and Economy, Central bank, Gross domestic product, International Monetary Fund, Iraq, Iraqi dinar, kuwait, middle east

The question is in reference to my opinion on the speculation of how much the dinar will be influenced by the oil sector.

Iraq’s oil production was speculated in the early part of 2010 to be somewhere around 12 to 16 billion barrels of oil per week. The last report given on March 28, 2010 in a Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding from the IMF states….


While the volumes of oil production and exports in 2010 have been lower than we had planned, mainly due to adverse weather conditions, attacks on pipelines, and political constraints that prevented an increase in exports from our northern fields, this was more than offset by higher- than-budgeted oil prices. Oil production averaged 2.35 million barrels per day (mbpd) in 2010, exports averaged 1.85 mbpd, and prices averaged about $74 per barrel. Thus, aided by higher-than-budgeted oil revenues and with a lower rate of execution of the capital budget, we expect that the government budget deficit in 2010 remained limited to about ID 10 trillion (IMF presentation), equivalent to about 11 percent of GDP

With this being said, it seems that Iraq did indeed intend on producing even higher numbers, yet they were still able to meet original goals with little influence from such adverse conditions.

Will the price of oil being a deciding factor on how much the value of the Dinar rises? Of course it will. Will it be the sole discretion on determining the amount of the IQD?  Of course not. However, every country has a gross domestic product that determines a country’s ability. I believe Iraq is proving this. In some cases, they are far more stable than the rest of us.

As for the revaluation… I’ve always said that the moment that Iraq becomes globally recognized that even if they don’t chose the amount in which they wish to RV that the natural influence of pressure against the Dinar will cause it to rocket either way… Simple economics…. lol It won’t happen like that due to Iraq being able to control their destiny and learn from the mistake of Kuwait. They will have a managed float and it won’t be slow…

Good night everyone!