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What does it mean to DELETE 3 ZEROS from IRAQI DINAR? (17-04-2013). Is it RV or RD?

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What does it mean to delete 3 zeros from Iraq Iraqi dinar?


17-04-2013

 

 

 

Prof. Mohammad Ibrahim Al-saqqa
According to CNN, said the Iraqi Parliament's Finance Committee that the Central Bank will begin THIS YEAR to delete the three zeros from the local currency, in other words a currency unit class a old currency will be replaced by only one dinar of the new currency, and so on.

 

 

 

The step taken by Iraq to repair local currency system based on the use of work groups is very high, leading to difficulties in handling and transaction accounts, as well as the high price of using monetary units in the categories high, which leads to the currency exchange rate and the low purchasing power of the dinar.
 

 

 

In periods of monetary turmoil and General State revenues while increasing expenditures, States frequently to print more currency, leading to higher prices and inflation rising, the need for currencies with higher categories such as alpha and the hundred thousand and one million ... Etc. And with each increase in currency enter the economy into inflation.
 

 

 

One of the ways to control high inflation is monetary reform, coupled with a change in monetary policy by replacing the old currency to the new currency high categories of categories even lower prices tend to decline. But do you spend it on inflation? The answer is no, because the Elimination of the State required inflation moderate monetary policy.


Read more: http://www.sotaliraq.com/mobile-news.php?id=96527

 

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Usually, that sort of description would make it a redenomination (i.e. RD) since the statements have all been about removing three zeros for the purpose of changing the face value on the currency.  However, when it comes to the IQD there have been no explicit statements that they intend on replacing specific notes.

 

It is possible Iraq has no plans to replace the currency, but may choose to reduce the amount of large notes in circulation without removing them as legal tender - while also introducing new lower denominations.  It is not a usual thing for a nation to do that, but it has happened in history and could happen again in Iraq.  Most people tend to believe there will either be this event or a RV, and I am holding out hope that if they do RD that it won't mean a RV is out of the question.

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dinar_stud: "  So whas the answer?? Is it a RV or a RD???  ", I prefer " RV " first at what ever rate is given at that time then " RD ".

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exactly..no one knows..

 

this gets beaten up to death every time they post an article like this..

 

all we can do speculate at this point......

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Perfect condition Dead Horde ---> Dinarvets ----> horrendously beaten-to-a-pulp lump of meat Dead Horde.
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the same article at a different site.. in the comments the author pretty much says their gonna lop... link  ..

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Man i don't know if you should ask that question.I asked the same question yesterday and i thought i was going to have my gonads ripped off for asking.

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I'm not a Lopter.. just confused.. looking for clarity.. the author says they'll trade the notes in 1000-1 but IDK what that means for us, in addition the author if a Prof. at Kuwait University.. so not in Iraq, so IMO he has no more information than us.. aka speculating based on the future.. he sites turkey as a comprable comparison but Iraq doesn't have the hyperinflation.. only a highly undervalued currency.. so IMO this author is doing nothing more than speculating just like the rest of us.. 

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I'm not a Lopter.. just confused.. looking for clarity.. the author says they'll trade the notes in 1000-1 but IDK what that means for us

 

In a typical redenomination (RD), large currency notes are usually replaced with new currency notes showing a lower face-value.  If Iraq decides to do this, a 25,000 IQD note would be able to be traded in for a 25 IQD note - which is a 1000:1 ratio.  Important to note is that the face-value is all that changes.  If 25,000 IQD equaled 1 USD, then 25 IQD would also equal 1 USD.   The face-value changes, but the exchange rate does not.

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What does it mean to delete 3 zeros from Iraq Iraqi dinar?


17-04-2013

 

 

 

Prof. Mohammad Ibrahim Al-saqqa
According to CNN, said the Iraqi Parliament's Finance Committee that the Central Bank will begin THIS YEAR to delete the three zeros from the local currency, in other words a currency unit class a old currency will be replaced by only one dinar of the new currency, and so on.

 

 

 

The step taken by Iraq to repair local currency system based on the use of work groups is very high, leading to difficulties in handling and transaction accounts, as well as the high price of using monetary units in the categories high, which leads to the currency exchange rate and the low purchasing power of the dinar.
 

 

 

In periods of monetary turmoil and General State revenues while increasing expenditures, States frequently to print more currency, leading to higher prices and inflation rising, the need for currencies with higher categories such as alpha and the hundred thousand and one million ... Etc. And with each increase in currency enter the economy into inflation.
 

 

 

One of the ways to control high inflation is monetary reform, coupled with a change in monetary policy by replacing the old currency to the new currency high categories of categories even lower prices tend to decline. But do you spend it on inflation? The answer is no, because the Elimination of the State required inflation moderate monetary policy.

Read more: http://www.sotaliraq.com/mobile-news.php?id=96527

 

 

The reasons given for removing 3 zeros in this article is based upon ease of accounts and inflation.

 

Iraq rate of growth for 2013 is 9% (forextv) (world economic data)~ the global rate of growth for 2013 is only 3.3%, while U.S. rate of growth is only 1.9%.(NYT IMF Estimates)

 

To even consider a lop countries are historically in the triple digits.

 

Iraq will redenominate just like The U.S. did with their large 3 zero currencies. It will be done typically during business transactions or deposit into bank where from both examples the larger three zero currency will be thereafter retired. In approximately 2 years the process should be complete and the economy will function with the lower denoms.

 

Iraq's inflation rate was 2.2% in February 2013 & yet Iraq's planning ministry expects to see 4% throughout 2013 due to oil being their main commodity.

 

So in my book, this article is far removed from reality, especially when the main control for inflation is to buy back currency off the street! This is what the CBI/GOI has been doing in earnest since 2008.

 

Current physical IQD in my books is around 4T and declining.

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The US never redenominated.  We just removed larger bills from circulation but we already had the smaller bills which remained in circulation. 

 

Deleting the zeros has always meant lop, not just with Iraq but every country that went through this process.  Gurus and pumpers don't want to tell you that because it cuts into their bottom line, but that's what the CBI plans to do.

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I respectfully disagree with your whole post.

But one thing is worth pointing out. You claim the large three zero notes were in the supply with the lower denominations.

1) Then historically and in The U.S., this scenario has worked before, where currency was in fact coexisting with another note at 1000 xs more its LD value.

2) Why was this scenario existing in The U.S. in the first place and why and when was it decided to reduce the market supply of the three zero notes in The U.S.?

Yes, Iraq will go through the same scenario as The U.S. It is call redenominating.
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I respectfully disagree with your whole post.

But one thing is worth pointing out. You claim the large three zero notes were in the supply with the lower denominations.

1) Then historically and in The U.S., this scenario has worked before, where currency was in fact coexisting with another note at 1000 xs more its LD value.

2) Why was this scenario existing in The U.S. in the first place and why and when was it decided to reduce the market supply of the three zero notes in The U.S.?

Yes, Iraq will go through the same scenario as The U.S. It is call redenominating.

 

Those notes were in use for bank to bank transactions and were retired because electronic banking made them unnecessary.  They weren't put into circulation because of hyperinflation like the three zero dinar notes.  The reference to co-existing has nothing to do with large and small denominations of the same currency series.  It has to do with one series at one value co-existing with another series at a different value.  That wasn't the case with the USD.

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I respectfully disagree with your whole post.
But one thing is worth pointing out. You claim the large three zero notes were in the supply with the lower denominations.
1) Then historically and in The U.S., this scenario has worked before, where currency was in fact coexisting with another note at 1000 xs more its LD value.
2) Why was this scenario existing in The U.S. in the first place and why and when was it decided to reduce the market supply of the three zero notes in The U.S.?
Yes, Iraq will go through the same scenario as The U.S. It is call redenominating.

you can diagree or agree or whatever.....but hwhat was posted is fact....and not an opinion
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The US never redenominated.  We just removed larger bills from circulation but we already had the smaller bills which remained in circulation. 

 

Deleting the zeros has always meant lop, not just with Iraq but every country that went through this process.  Gurus and pumpers don't want to tell you that because it cuts into their bottom line, but that's what the CBI plans to do.

With inflation the way it is we will need those larger notes again soon enough.

Lop or no Lop I would have pissed away all the money I have in IQD long ago. If we see a redenomination and have to cash in it's still found money to me even after the spread.

BTW  Wife loves Greys anatomy and CSI. Which Doctor Robbins are you? Thanks



you can diagree or agree or whatever.....but hwhat was posted is fact....and not an opinion

Reality is way over rated Sandstorm.



Doc Robbins is spot on. 

Ok thanks

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