2008 Blog Post Proposal to remove three zeros from the Iraqi currency

[Markinsa]

Proposal to remove three zeros from the Iraqi currency

 

 

D. Fadel punitive

 

21/07/2008

 

Readings: 3537

 

Introduction: The 

media began circulating news direct possibility of deleting the zeros generated by the inflation in Iraq, and this is what made ​​by the Minister of Finance about renaming categories currency printing new banknotes .. 

 

and the news came out that the topic is still in the process of research between the government and the central bank, where the readings The first of this will be in the interests of the Iraqi economy, especially in the long term. 

 

and rename denomination process for Iraq, easy and not complicated and has received popular support for this procedure in terms of re-recalled currency powerful country supported the golden cover, which was at one time to equal to three dollars, as well as a little of the Kuwaiti currency more but as a result of wars and international sanctions has shown the former regime made ​​this currency gaunt and weak currency and became the subject of contempt by countries, especially neighboring so became a citizen borrowed from them. 

 

From here the idea came to ask some specific ideas about the application of this procedure or not to debate Service dear to our country ...... and God of the intent behind the history of the Iraqi currency issuance: the monetary system in Iraq was not a clear-cut terms were not basic monetary unit list of legal terms on the gold standard, but they are made ​​of it, and the use of the lira Ottoman Empire, as well as Allirtin English and French are limited to large cash transactions, while small cash transactions made ​​by silver and copper coins. In 1914, popularized the use of the Indian rupee in Baghdad and not parts of Iraq in 1918 and became the basic monetary system in Iraq, the monetary union. He adds rupee at work until October 1932 where he was the abolition of the legal status of her. In line with the national sympathy and necessities of complete national sovereignty began to think seriously for the issuance of an Iraqi currency since 1922 and continued claims on the issuance of the currency despite the difficulties of the lack of national monetary authority. On 17 March 1930, and the approval of the Council of Ministers and of the establishment of a committee of the Iraqi currency and the issuance of Law No. 44 for the year 1931 by issuing the Iraqi national currency and issued Asdaria first in the April 1, 1932 and which categories are (10,5,1, half a dinar, quarter of a dinar) , followed by twelve emissivity has printed all in the international specialized presses carry international standard specifications for money. The CBI deliberately make 2/8/1990 after the invasion of Kuwait and later to print banknotes inside Iraq and the potential of Dar Mesopotamia for printing to meet the needs of the national economy.

 

Iraqi currency versions:

 

1. Alosaddaria The first identified in the April 1, 1932. Indian rupee also remained in circulation the first of October until 1932, where he was the abolition of the legal status of her after this date and the legal groups have after this date and the categories Alosaddaria (quarter of a dinar. Half JD. 0.5 dinars 0.10 dinars and bear all image King Faisal first.

 

2. Alosaddaria second printed this Asdaria same categories on 11/19/1934 The image of King Ghazi. Alosaddaria

 

3. The third identified the third edition dated 07.26.1941 and bearing the image of King Faisal II in infancy.

 

4 Alosaddaria fourth. identified on 15/07/1942 categories themselves and bearing the image of King Faisal II. As Reprinted decorated in King Faisal II at a young age.

 

5. Alosaddariaavh: On 17/09/1950 identified include categories (quarter of a dinar, half a dinar, 1,5,10) and represents the image of King Faisal II.

 

6. Asdaria sixth: were placed in trading on 03/20/1952, in the same categories decorated in the fifth edition of King Faisal II larger than seen in the enactment of the fifth edition.

 

7. Alosaddaria seventh: issued the seventh edition of the same categories and placed sixth edition of trading on 05/12/1955.

 

8. Alosaddaria eighth: This edition was issued on the basis of the Iraqi currency Law No. 92 of 1951 and bearing the name of the Iraqi Central Bank instead of the Iraqi National Bank.

 

9. Alosaddaria IX issued On 01/07/1959 categories (quarter of a dinar, half a dinar 0.1 dinars 0.5 dinars 0.10 dinars) and bearing the logo of the Republic.

 

10. Alosaddaria X: This edition was published in 28/09/1968 categories above represent security thread for the first time became a securities Cash decorated to reflect the historical and urban and economic character of Iraq. Alosaddaria

 

11. Eleven: 07.27.1969 issued in terms of the Central Bank of Iraq re-printed banknotes above new image motifs and water. Alosaddaria

 

12. Twelve: This edition was issued after the Bank Act CBI No. 64 of 1976, and included a new category of banknotes are (JD 25) and represent the face image of three Arabian horses in the back Abbasid Palace scene in Baghdad.

 

13. Thirteen Asdaria: issued edition after the events of 1990 in Dar es Mesopotamia print categories (quarter of a dinar, half a dinar, 1,5,25,50,100,250,10000)

 

14. Alosaddaria Fourteen: This edition was issued based on a decision issued on 8/7/2007 Coalition Provisional Authority and for the purpose of high technical specifications upscale unified Iraqi currency issuing a challenge cases of fraud suffered by the Iraqi people and government banks. The new currency was put into circulation starting from 07/15/2003 until 15/1/2004 and among all banks in the country and on the basis of one dinar printed local dinar and a new one except the printed currency internationally (called Swiss) has been replaced by the equivalent of 150 dinars then Print category was 500 dinars a complement to the fourteenth edition which has become are as follows (50,250,500,1000,5000,25000) and emerged as the need to need to put metal coins new categories for ease of trading in the new currency has been minting new coins are (25,50,100) has been developed In trading on 2/1/2005.

 

 

1: The proposed mechanism: 

 

Looking back any in 1931 where he began trading the old Iraqi dinars, which called Basuezra where the securities are printed in the United Kingdom in DeLauro Press. 

It was before that date was the Indian rupee is traded on the country's currency. 

 

The process of issuing Iraqi currency, the dinar was before the Iraqi Finance Committee of the period 1931-1947 with the beginning of 1947, the National Bank of Iraq began, which was called at the time issued in 1954 as the Central Bank of Iraq began in the currency issue. 

 

During that period, the dinar is linked to the pound sterling and is subject to comments that affect the pound Sterling decline and rise according to the situation of the British economy, and after the fourteenth of July revolution in 1958, the leader Abdul Karim Kassem unzip the dinar to the pound sterling, but the dinar, while preserving its purchasing power as was the equivalent of 3.30 pounds at the time. 

 

After the outbreak of the Iraq war - Iran began dinar loses its value in the currency market, reaching its value at the end of the war in 1988 to the equivalent of 25 US cents meaning it every US $ equivalent of four Iraqi dinars. 

 

After the invasion of Kuwait and the resulting economic sanctions imposed on Iraq resulted in the inability to issue Iraqi dinar, which was printed in Switzerland presses the government began to expand domestic credit by printing the Iraqi dinar in the Iraqi presses which lacked necessary to print currency and special attributes of a good technology which has led to the proliferation of counterfeiting of currency operations policy in addition to the severe collapse in the value of the currency terms reached the height of his greatness in 1995, where the US dollar reached 3,000 Iraqi dinars.

 

and started small coins disappear and Mineral private ones (penny 0.5 fils 0.10 fils 0.25 fils 0.50, fils 0.100 fils 0.250 fils 0.500 fils) and this mostly metal I took the currency starting from 25 dinars and 1,000 dinars 0.25000 dinars. In Iraq on April 9, 2003 and the formation of the new Iraqi government in spite of the difficult conditions, but that the Iraqi economy began to improve operating performance indicators and the Iraqi currency began to regain something of recovered issuing authority of the coalition at the time of the new Iraqi dinar in 09/15/2003 to January 15, 2004, where The new currency is printed in Britain in DeLauro good and difficult forgery and specifications presses, and since then the Iraqi dinar began to regain strength against the dollar, where he arrived at the present time that the US dollar = 1200 fils.

 

However, the global ratio to switch the Iraqi dinar with other currencies does not work out and this why does not alter the global banks or selling or buying the Iraqi dinar and they are exchanged on the sidewalks and streets in Iraqi cities. 

 

Iraqi currency traded are as follows: 

250 dinars 0.500 dinars 0.1000 dinars 0.5000 dinars, 10,000 are KD 0.25000 dinars. And deleting three zeros from the currency may have returned the old currency supported by the citizens. 

It will be deletion according to the following process: the US dollar becomes price today = 1200 fils in the sense that the US $ 100 = 120 dinars, which is very appropriate to such a stage that the government is fighting inflation and keep it at reasonable levels.

 

consists currency categories after deletion of zeros are as follows:

 

· In addition to the metal coins are as follows: 25 dinars. 50 KD 0.100 dinars.

 

Penny 0.5 fils 0.10 fils 0.25 fils 0.100 fils 0.250 fils 0.500 fils, and these coins. Then quarter of a dinar paper, half a dinar paper 0.1 dinars 0.5 dinars 0.10 dinars 0.25 dinars. 

It can go back to the old class, which was printed in Switzerland. 

 

The quest for the issuance of such currency or rename the categories is to emphasize the strength of the national economy, which fell Inflation Q 150% rate in the mid-nineties of the last century to about 53% in 2006. 

 

In this way the Iraqis have died large currencies and by 2009 to be used as the older and newer banknotes groups during a transition period. 

 

As a result, the coins will return to the widespread use The dollar becomes = 1200 new Iraqi fils. 

 

Here it must be said that the new currency will carry the attributes of the new era in Iraq, and you'll find the old new currency each special welcome and it will be of small groups reminiscent of the golden age of Iraq's economy in the early seventies of the last century.

 

and you'll find people ease of use of the new currency in terms of their accounts, which will be easy and uncomplicated. In addition to the coins will start trading again.

 

Here it must be noted that the responsibility lies with the Central Bank of Iraq in the case of the decision to move to the application of this procedure which has to take place smoothly without the occurrence of any problems and that the new dinar will announce the start of a new time and not just Coin been removed zeroes but also brings hope in the end of wars, sanctions and inflation time and here it must be emphasized on the issue very important that if you remove three zeros from the currency should not prejudice their real value that is traded in the old currency and gradually withdrawn until the end of the year 2009. 

 

It should also coincide to re-work Bantrza prices to determine the general level of prices and the real level of wages in order to eliminate the structural distortions in the national economy makes the process of removing zeros based mechanisms to reduce the rate of inflation and make it in the lower levels

 

2. experiences of other countries: tended other countries suffered from runaway inflation similar path, particularly in Russia in the nineties of the last century. As Turkey has withdrawn (6) zeros from its currency without prejudice to the true value.

 

Offering Treasury Secretary Turkish then Ali Babacan current Foreign Minister bill to get rid of the six zeros in the Turkish lira and by 2005, and resulted in inflation experienced by Turkey to the euro single price up to a million and 7,820,333 TL Turkey has had discussions on making such a earners to remove six zeros from the currency. and seem to rein in high inflation in Turkey can only be achieved through the removal of six zeros from the Turkish currency for the first time the Turkish government in reducing the rate of inflation to succeed to the target for the current year is 19.3%, and despite this high rate compared other countries and gave the law to the Prime Minister's Office with a view to the application and began the application where the two currencies began trading for a specified period after the withdrawal of the old currency and replaced the new currency. The Sudan has issued remove three zeros from the Sudanese pound Law in the sixth coin of its kind since Sudan's independence in 1956. In addition, Iran is also studying the removal of three zeros from the paper currencies of the country by value declined due to high inflation rates. In conclusion we can say that one of the pillars of state sovereignty and strong state economically currency are the countries with strong currencies, proud of its citizens in terms of that weakness currency hurt the feelings of the citizens from the psychological point. To this must proceed in application of this procedure and its knowledge of all aspects in order to avoid the occurrence of any difficulties in its application and it really be that the Iraqis have become in a new era looming on the horizon prosperity.

 

3. The potential effects of the procedure that the phenomenon of rising prices in the world's main cause is the decline in currency values ​​and thus lower value purchasing. 

 

Special Ptsorna that the best cure for these reflections on the psychology of the Iraqi individual and the market is in a new formulation of the price of Iraqi currency be back with the logical in the relationship between the true cost of the item and the price-based selling in the market. The cancellation of three zeros from the Iraqi currency is tantamount to re-price nature and reduce the size of the introduction of inflation growing, and perhaps the best example of the Turkish experience. After that wrote off six zeros to become him a million pounds and only one and the same previous purchasing power of the million, it became possible to purchase Blairh one that was in the past one million pounds. 

 

The abolition of zeros from the currency, which suffers from inflation inevitably limit the negative effects of what the world is witnessing of hyperbole in the prices of goods and services and will restore the coin balance and weight. 

 

Such a decision if adopted by the Iraqi government, it will not restore the Iraqi currency value based upon, but will reflect as well as the flexibility of the economy and his movement in the right direction so from our point of view as analysts economists to look seriously for this phenomenon by holding seminars and conferences to consist of which views to get to rein in inflation and rise in prices and the return of Iraqi currency, the real and normal value.

 

 

The deletion of three zeros of the Iraqi currency to achieve the following objectives: 

 

1. to fight inflation 

2. support the banking system 

3. Assistance to know how the size and wealth distribution 

4. The banking system's ability to control liquidity 

5. create fiscal surpluses used in financing 

6. increase awareness of the bank.

 

 

It also must be on the Iraqi Central Bank in collaboration with the government numbers instructed to organize new replacement currency process by informing licensed banks, all operating in the country that include in these instructions regulatory procedures for the process to replace the ones preparing forms for the receipt of the new currency by banks blogger where the number of funds received and their contents by currency categories as the Central Bank of Iraq must do to register Iraqi bank balances constraint owes the bank for cash for the securities transferred in the moment in which these securities become legal money and be issued by order of the bank. And to ensure the continuity of substitution allows commercial banks which are used as sites branches replace overdraft without the benefit of the central bank and this is due to the diligence and assess the bank's governor to the level at which these clouds is based on the process of replacing the currency alone. In light of the process of removing three zeros and the issuance of a new currency, the criticism of the Iraqi currency will increase as the Iraqi dinar will take his job as a store of value addition to this improvement, which will be introduced on the exchange rate as it is expected that the results will be positive as follows:

 

 

1. increase citizens' confidence and new home currency as a store of value dependence. In terms of high security technical specifications where it can be printed in the role of the foreign population famous. 

2. get rid of the burden of the old currency and Akiemha large as the new currency will be easy to handle and load without problems. 

3. The elimination of high inflation rates, where will this procedure a major impact in reducing Inflation in the Iraqi economy. 

4. stays there one condition, the state must do is to eliminate the structural distortions in the Iraqi economy, especially in the supply and prices and wages along with 

5. It must be said that one of the reasons for increase in inflation was increasing government spending so it does not need to be coordination between monetary policy, central bank and government spending to limit the effects of inflation (Ministry of Finance) and coordination with them and go in the future to reduce government spending. 

6. Perhaps the implementation of this procedure is recorded in favor of the current government in the promotion of the national economy.

 

 

 

D. Fadel punitive

 

- See more at: http://www.alnoor.se/article.asp?id=28607#sthash.jW1hXQg3.dpuf

[sandfly]

I HOPE THEY DONT DO WHAT TURKISH DID. THEN WE WILL HAVE PAPER FOR THE BATHROOM

[stealthwarrior]

I hear ya Sandfly.I had a friend who bought a lot of currency while working over there and he lost his ass.I hope it doesn't happen that way for us.I personally don't have much invested but still would like to see a payoff but if not,i haven't lost much.they did say they were removing zero's from the currency not the value.the 50 is done and I personally think anything below 1000 is done too.take the zero's off the rest and presto.1000=1,5000=5,10000=10,25000=25.Man I hope I am wrong.just like all of you,i really could use that money.it would be a miracle for me and my family.

[umbertino]

I HOPE THEY DONT DO WHAT TURKISH DID. THEN WE WILL HAVE PAPER FOR THE BATHROOM

No comment....Smile

[Texstorm]

Y'all hang in there it always gets worse before it gets better ! We don't know what Iraq is going to do but people in power will cut off their nose to spite the face, they are greedy and that may work for us as well. I may not be an economists but I know human nature. If you could manufacture money out of thin air would you not ? Those greedy b_$tard$ may actually help us in the end. Thanks Markinsa !

[Freedomwish]

Man I hope I am wrong.  Just like all of you, I really could use that money.  It would be a miracle for me and my family.

 

Prayers and hopes all the way around, Stealth.      

[shydude]

1 US = 1200 Fils. If my calculation is correct 1 Dinar = .833333333 US

[Deb45]

Thanks Shydude for doing the math.  My brain was springing a leak figuring it out.