View Full Version : Bingo! Iraq - February 24, 2010 - IMF Stand-By Arrangement Meeting

02-18-2010, 06:42 AM
IMF Executive Board Calendar

February 24, 2010

Country: Iraq

Title: 2009 Article IV Consultation and Request for a Stand-By Arrangement


02-18-2010, 08:28 AM
Thank-you, Gaurdian for finding this! It's exciting news! Here's the link for Article IV. Click on the full text document link below. This spells it all out. There are no secrects here. Amazing! Now, the question remains whether Iraq will actually be granted the request for the Stand-By Arrangement. We shall see.


Also, below is the synopisized version I've pulled from the IMF website.


Article IV - Obligations Regarding Exchange Arrangements

Section 1. General obligations of members
Recognizing that the essential purpose of the international monetary system is to provide a framework that facilitates the exchange of goods, services, and capital among countries, and that sustains sound economic growth, and that a principal objective is the continuing development of the orderly underlying conditions that are necessary for financial and economic stability, each member undertakes to collaborate with the Fund and other members to assure orderly exchange arrangements and to promote a stable system of exchange rates. In particular, each member shall:


endeavor to direct its economic and financial policies toward the objective of fostering orderly economic growth with reasonable price stability, with due regard to its circumstances;


seek to promote stability by fostering orderly underlying economic and financial conditions and a monetary system that does not tend to produce erratic disruptions;


avoid manipulating exchange rates or the international monetary system in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage over other members; and


follow exchange policies compatible with the undertakings under this Section.

Section 2. General exchange arrangements
(a) Each member shall notify the Fund, within thirty days after the date of the second amendment of this Agreement, of the exchange arrangements it intends to apply in fulfillment of its obligations under Section 1 of this Article, and shall notify the Fund promptly of any changes in its exchange arrangements.

(b) Under an international monetary system of the kind prevailing on January 1, 1976, exchange arrangements may include (i) the maintenance by a member of a value for its currency in terms of the special drawing right or another denominator, other than gold, selected by the member, or (ii) cooperative arrangements by which members maintain the value of their currencies in relation to the value of the currency or currencies of other members, or (iii) other exchange arrangements of a member's choice.

(c) To accord with the development of the international monetary system, the Fund, by an eighty-five percent majority of the total voting power, may make provision for general exchange arrangements without limiting the right of members to have exchange arrangements of their choice consistent with the purposes of the Fund and the obligations under Section 1 of this Article.

Section 3. Surveillance over exchange arrangements
(a) The Fund shall oversee the international monetary system in order to ensure its effective operation, and shall oversee the compliance of each member with its obligations under Section 1 of this Article.

(b) In order to fulfill its functions under (a) above, the Fund shall exercise firm surveillance over the exchange rate policies of members, and shall adopt specific principles for the guidance of all members with respect to those policies. Each member shall provide the Fund with the information necessary for such surveillance, and, when requested by the Fund, shall consult with it on the member's exchange rate policies. The principles adopted by the Fund shall be consistent with cooperative arrangements by which members maintain the value of their currencies in relation to the value of the currency or currencies of other members, as well as with other exchange arrangements of a member's choice consistent with the purposes of the Fund and Section 1 of this Article. These principles shall respect the domestic social and political policies of members, and in applying these principles the Fund shall pay due regard to the circumstances of members.

Section 4. Par values
The Fund may determine, by an eighty-five percent majority of the total voting power, that international economic conditions permit the introduction of a widespread system of exchange arrangements based on stable but adjustable par values. The Fund shall make the determination on the basis of the underlying stability of the world economy, and for this purpose shall take into account price movements and rates of expansion in the economies of members. The determination shall be made in light of the evolution of the international monetary system, with particular reference to sources of liquidity, and, in order to ensure the effective operation of a system of par values, to arrangements under which both members in surplus and members in deficit in their balances of payments take prompt, effective, and symmetrical action to achieve adjustment, as well as to arrangements for intervention and the treatment of imbalances. Upon making such determination, the Fund shall notify members that the provisions of Schedule C apply.

Section 5. Separate currencies within a member's territories
(a) Action by a member with respect to its currency under this Article shall be deemed to apply to the separate currencies of all territories in respect of which the member has accepted this Agreement under Article XXXI, Section 2(g) unless the member declares that its action relates either to the metropolitan currency alone, or only to one or more specified separate currencies, or to the metropolitan currency and one or more specified separate currencies.

(b) Action by the Fund under this Article shall be deemed to relate to all currencies of a member referred to in (a) above unless the Fund declares otherwise.

02-18-2010, 08:39 AM
Thank You! kc135...awesome!

02-18-2010, 08:46 AM
I keep reading Article IV, and it does specifically spell out a lot, but how does a Stand by Arrangement affect it? Maybe it's still too early for me?

02-18-2010, 09:26 AM
Great find still reading but awsome job!!!

02-18-2010, 10:07 AM
Great read, my only question is, is the IMF requesting a stand-by agreement, or is it Iraq making the request?

02-18-2010, 10:16 AM
The meeting means Iraq is going to meet with the IMF about the Stand-By Arrangement (loan). News on the loan has been scarce, but this came out yesterday. Let's wait and see if they will now agree with the stipulations the IMF wants for the loan.

02-18-2010, 12:42 PM
This is the one I'm talking about and they call it Stand-by and loan:


02-19-2010, 10:33 PM
Isn't this the loan that is paid back by SDR's? Or am I wrong in that?

02-20-2010, 06:07 PM
Isn't this the loan that is paid back by SDR's? Or am I wrong in that?

This is the one they already have:

UPDATE: IMF Grants Iraq $1.8B To Meet Econ Crisis - Official

September, 28, 2009 - 10:16 a.m. EST

By Hassan Hafidh
AMMAN (Dow Jones)--An Iraqi central bank official said Monday that the International Monetary Fund will provide the war-torn country $1.8 billion to help it emerge from the global downturn. "The money is to support liquidity and to improve growth of the Iraqi economy," central bank advisor Mudher Kasim told Dow Jones Newswires on the sidelines of an IMF-Iraq meeting in the Jordanian capital, Amman.

Kasim said that the money is expected to be spent on infrastructure projects. A massive budget deficit, estimated at nearly $19 billion this year, is adding to pressure on the government to try to find new sources of financing.

In addition, the IMF and Iraq are close to finalizing a deal for a $5.4 billion standby loan. It would be paid back in two installments over five years at an interest rate of just above 1%, he said.

Earlier, Iraq's central bank chief told Zawya Dow Jones on the sidelines of a central bankers meeting in Abu Dhabi that a financing deal with the IMF could be finalized at the organization's annual meeting in Istanbul starting Oct. 6.

Kazim said that inflation in September is expected to hover in the same level as the previous month. Iraq's August inflation soared to 10.8% compared with around 7% in July driven by decline in agriculture production and soaring foodstuffs prices.

The advisor said Iraq's non-oil sector economic growth is seen at 5% during the first nine month of this year.

The central bank has issued $2.6 billion worth of treasury bills to finance much needed power projects, Kasim said. He said the bank had rejected more calls from the government to issue further treasury bills to finance other projects.

http://www.zawya.com/Story.cfm/sidZW20090928000155/UPDATE:%20IMF%20Grants%20Iraq%20$1.8B%20To%20Meet% 20Econ%20Crisis%20-%20Official/

02-20-2010, 06:34 PM
In addition, Iraq was allocated SDRs from the IMF:


02-20-2010, 06:37 PM
Excellent! Thanks, Guardian!