More News, Rumors and Opinions Thursday Afternoon 7-2-2020
TNT:
Thursday UPDATE for July 2, 2020
From across the pond.....
All talk today is the plan to cover the salaries for next 3 months at reduced rates so Iraq can pay salaries. Then after 3 months, the new plans and reforms will assist.
This indicates no rate change for 3 months going into the new fiscal year just like they talked about this morning and now is on Iraqi TV.
[REMEMBER: Watch they DO... not what they say]
Harambe: Bloomberg: Old Mutual’s Share Price Is Focus in Zimbabwe’s Currency War
(7/2/20)
The share price of one of Africa’s oldest insurers is taking centre stage in Zimbabwe’s battle to bring order to its chaotic foreign-exchange system.
In the latest in a series of attempts to stabilize its currency, the government wants to eradicate the Old Mutual Implied Rate.
The gauge, used by domestic companies to determine the future cost of goods and services, calculates a potential forward rate for the Zimbabwe dollar by measuring the difference between Old Mutual’s share prices in Johannesburg, London and Harare.
The indicator is among many “contrived phantom exchange rates” in use that “conspire to defeat fiscal policy,” the government said in a 26 June edict that halted trading on the Zimbabwe Stock Exchange and stopped most mobile-banking transactions.
The OMIR is one of multiple exchange rates Zimbabweans use daily to navigate the nation’s myriad economic challenges, including annual inflation of almost 800%.
A perennial shortage of cash means anyone who has physical banknotes is able to negotiate exchange rates with brokers who pay the funds onto mobile-money platforms. The brokers can then sell the hard cash at an even higher rate.
That’s resulted in a widening gap between the official rate of 63.7 per U.S. dollar, and the amount at which it trades on the streets of Harare, which is now at 100.
“People have relied on making money from buying and selling Zimbabwe dollars, and not from any real production,” said John Robertson, an independent economist based in Harare. “It’s what has created these distortions.”
The OMIR also feeds into the black-market Zimbabwe dollar rate, which the nation’s bourse uses, along with the official rate, to determine the value of stock prices.
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Courtesy of Dinar Guru https://www.dinarguru.com/
Delta ...the exchange rate is one of the pillars or economic reform. You can not bring investors in, you cannot have liquidity, you can't have any trust in your country if you don't raise the value first. And all of us know that...everybody knows that the exchange rate is going to change no matter what and the Prime Minister did agree to that...
Breitling ...they're worried about regionally having a currency that's valued too high. The pressure cooker they're in is that they need to add value to their currency otherwise they're going to go broke. If they add too much value to their currency they are going to go broke. That's just the reality. But what people don't understand is that other countries are in the same position...Iraq basically told everybody they want to get the value of their currency to $3.25. [Wait a minute, you just said if their currency is too high in that region they are going to get their asses handed to them.] That's true. But if their currency was a global currency, then it wouldn't matter would it... [Post 1 of 2.]
Breitling ….Take for example the United States and Mexico. How much is their peso worth. Look at Canada...If Iraq is international they could have a huge high price. But if they're going to be local for right now, regional, then they can't go that high...Let's say their markets are going to be regional and they do add value to their currency it helps them get to international markets. Well if they're in international markets and it becomes more and more dependent on international markets you're going to see the value of the currency keep going up...If it's regional...they're never going to get past a buck... [Post 2 of 2]
Currency 365
1 Million Iraqis Must Surround Green Zone Until MP's Surrender
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