Dinar pegged to the Dollar

[hot2bewe]

I have seen on many boards people saying the Dinar is pegged to the Dollar. One goes up the other goes up, and vice-versa on the way down. If this is the case how come we have not seen a rise in the dinar against other currencies. Now Iran is saying that the rumors of them selling Euros is false and that they are actually beefing up their reserves with US Dollars. http://finance.yahoo.com/news/Iran-CB-head-denies-report-on-apf-1889325236.html?x=0

TEHRAN, Iran (AP) -- The head of Iran's central bank is denying the country plans to sell billions in euros as the currency weakens because of Europe's debt crisis.

Central Bank Governor Mahmoud Bahmani was quoted in Sunday's edition of the state-run Iran newspaper as saying a report early last week in a local newspaper that Iran plans to replace 45 billion euros of its foreign currency reserves for U.S. dollars was "not correct."

Iran has been converting its roughly $83 billion in reserves to euros as the dollar was hit by the global financial meltdown.

Bahmani also said the inflation rate in Iran has fallen to under 10 percent in May from 10.4 percent in April.

So what does a lower Euro and higher dollar mean for us. Well if the Dinar is truely pegged to the US Dollar that means when it does RV that anyone converting their Dinar to Euros will not receive as much before the Euro collapse. This is a good thing, less Dinars needed to convert the Euro. Now back to the US Dollar. Now this is speculation but if the Dollar has risen and the Dinar has stayed flat it would be safe to say that you can buy more Dinar per US Dollar, but that is not the case. The Dinar has stayed par even with the Dollar gaining ground. It's almost as though somewhere someone is setting the US to benefit the most from the RV. It could also mean that if the dollar keeps gaining ground the RV could be less than what some people might expect. I for one like the RI. But 3.22 in todays market after the dollar gains might bring us down in the 2's. Therefore I am calling a RV/RI rate of 2.20 as long as the dollar keeps gaining ground.

[luckylucy]

Thanks for the post!

What do you think if Iraq goes with a 'basket' ... like kuwait?

I have seen on many boards people saying the Dinar is pegged to the Dollar. One goes up the other goes up, and vice-versa on the way down. If this is the case how come we have not seen a rise in the dinar against other currencies. Now Iran is saying that the rumors of them selling Euros is false and that they are actually beefing up their reserves with US Dollars. http://finance.yahoo.com/news/Iran-CB-head-denies-report-on-apf-1889325236.html?x=0

TEHRAN, Iran (AP) -- The head of Iran's central bank is denying the country plans to sell billions in euros as the currency weakens because of Europe's debt crisis.

Central Bank Governor Mahmoud Bahmani was quoted in Sunday's edition of the state-run Iran newspaper as saying a report early last week in a local newspaper that Iran plans to replace 45 billion euros of its foreign currency reserves for U.S. dollars was "not correct."

Iran has been converting its roughly $83 billion in reserves to euros as the dollar was hit by the global financial meltdown.

Bahmani also said the inflation rate in Iran has fallen to under 10 percent in May from 10.4 percent in April.

So what does a lower Euro and higher dollar mean for us. Well if the Dinar is truely pegged to the US Dollar that means when it does RV that anyone converting their Dinar to Euros will not receive as much before the Euro collapse. This is a good thing, less Dinars needed to convert the Euro. Now back to the US Dollar. Now this is speculation but if the Dollar has risen and the Dinar has stayed flat it would be safe to say that you can buy more Dinar per US Dollar, but that is not the case. The Dinar has stayed par even with the Dollar gaining ground. It's almost as though somewhere someone is setting the US to benefit the most from the RV. It could also mean that if the dollar keeps gaining ground the RV could be less than what some people might expect. I for one like the RI. But 3.22 in todays market after the dollar gains might bring us down in the 2's. Therefore I am calling a RV/RI rate of 2.20 as long as the dollar keeps gaining ground.

[automag]

I have seen on many boards people saying the Dinar is pegged to the Dollar. One goes up the other goes up, and vice-versa on the way down. If this is the case how come we have not seen a rise in the dinar against other currencies. Now Iran is saying that the rumors of them selling Euros is false and that they are actually beefing up their reserves with US Dollars. http://finance.yahoo.com/news/Iran-CB-head-denies-report-on-apf-1889325236.html?x=0

TEHRAN, Iran (AP) -- The head of Iran's central bank is denying the country plans to sell billions in euros as the currency weakens because of Europe's debt crisis.

Central Bank Governor Mahmoud Bahmani was quoted in Sunday's edition of the state-run Iran newspaper as saying a report early last week in a local newspaper that Iran plans to replace 45 billion euros of its foreign currency reserves for U.S. dollars was "not correct."

Iran has been converting its roughly $83 billion in reserves to euros as the dollar was hit by the global financial meltdown.

Bahmani also said the inflation rate in Iran has fallen to under 10 percent in May from 10.4 percent in April.

So what does a lower Euro and higher dollar mean for us. Well if the Dinar is truely pegged to the US Dollar that means when it does RV that anyone converting their Dinar to Euros will not receive as much before the Euro collapse. This is a good thing, less Dinars needed to convert the Euro. Now back to the US Dollar. Now this is speculation but if the Dollar has risen and the Dinar has stayed flat it would be safe to say that you can buy more Dinar per US Dollar, but that is not the case. The Dinar has stayed par even with the Dollar gaining ground. It's almost as though somewhere someone is setting the US to benefit the most from the RV. It could also mean that if the dollar keeps gaining ground the RV could be less than what some people might expect. I for one like the RI. But 3.22 in todays market after the dollar gains might bring us down in the 2's. Therefore I am calling a RV/RI rate of 2.20 as long as the dollar keeps gaining ground.

The Dinar is pegged to the USD at this time. However it's rate is carefully subject to a managed float by CBI. That is why they have the daily auctions. The rate is maintained by Shabibi to keep inflation down and the rate steady as per agreements with the IMF which required them to maintain a steady rate for a period of one year ending I believe in either Nov. 09 or Dec.09. The policy used to achieve that stable rate is still in effect to this day and that is why the Dinar has not risen along with the stronger Dollar. The rate has been .0008457 for so long and that would indicate the stabilization policy I had mentioned. Even though there are some fluctuations it has stayed around that number for a long while. Keeping the steady rate is what CBI uses to combat inflation even though there has been a rise in the dollar. It has to do with their economic conditions and the money supply. Read the IMF web site and you can get idea of how that works.

luckylucy is correct however that when the RV occurs the CBI can peg to a basket of currencies as no International organization can determine what a governments currency rate RV's at or the standard that supports that currency. That is a sovereignty issue. The peg will be tested by the market and will sink or swim after the RV on the merits of that currencies performance on the open market. Now if the CBI made a deal with IMF about a rate that could make some difference as to what that rate is but I'm not aware of a deal even though it has been rumored they did. I just have no clue about that.

As for the Iranians their currency is in the tank and they drove their money into the ground by inept policies that have forced them to devalue their currencies strength and I believe they pegged to the Euro because of their intense dislike of the United States. That actually makes me happy to no end because as they have been our adversaries since the fall of the Shau in 1979 and took our embassy hostage. Of course they would have large amounts of the Euro and that has caused them further currency destabilization due to the Euro's decline. IMO anything that will damage the Iranian governments ability to control it's population and possibly cause a regime change in my mind is a good thing. Anything. It's gonna cost them a lot more to pursue their dangerous nuclear ambitions and a weak economy with a rotten currency might help slow them down a bit. Imagine wanting nukes in the name of God. I bet he wouldn't agree with them about that.

Having said that though the article you posted seems ambiguous as to whether or not the Iranians are replacing Euros for Dollars. It would seem to me that the theocratic government there would have a cow at the idea of using dollars to shore up their already worthless currency. It would be an offense to Allah by the way they think. But if they are using the Dollar that would be very interesting. I really could not discern what they are doing about that but I'll try and research that some more. The article did however say that they indeed had dollars in their foreign currency reserves so I guess they do have it. I was under the impression they had a policy to reduce or eliminate the dollar long ago. I learn something everyday. So much for religious doctrine when it comes to money huh.

If we get lucky the Iraqi CBI will choose a basket of currencies (such as Kuwait), which could include commodities ie gold, oil, or other such resources at their disposal. That would be the opportunity we investors would like to see as that might cause them to RV at a much higher rate than we would think possible. Shoot I like your prediction because if the rate you suggested comes about I am gonna have to figure out how to spend that much money. I can invest what I thought I would get and still be obscenely rich beyond my wildest imaginations.

Thanks for your post. It was interesting and caused me to think about it and I like to think. However I would ask anybody who knows to share information as to exactly what the Iranian currency is actually pegged too as I have not discovered that information and I am curious about that. Thanks.

[lgraham]

The Dinar is pegged to the USD at this time. However it's rate is carefully subject to a managed float by CBI. That is why they have the daily auctions. The rate is maintained by Shabibi to keep inflation down and the rate steady as per agreements with the IMF which required them to maintain a steady rate for a period of one year ending I believe in either Nov. 09 or Dec.09. The policy used to achieve that stable rate is still in effect to this day and that is why the Dinar has not risen along with the stronger Dollar. The rate has been .0008457 for so long and that would indicate the stabilization policy I had mentioned. Even though there are some fluctuations it has stayed around that number for a long while. Keeping the steady rate is what CBI uses to combat inflation even though there has been a rise in the dollar. It has to do with their economic conditions and the money supply. Read the IMF web site and you can get idea of how that works.

luckylucy is correct however that when the RV occurs the CBI can peg to a basket of currencies as no International organization can determine what a governments currency rate RV's at or the standard that supports that currency. That is a sovereignty issue. The peg will be tested by the market and will sink or swim after the RV on the merits of that currencies performance on the open market. Now if the CBI made a deal with IMF about a rate that could make some difference as to what that rate is but I'm not aware of a deal even though it has been rumored they did. I just have no clue about that.

As for the Iranians their currency is in the tank and they drove their money into the ground by inept policies that have forced them to devalue their currencies strength and I believe they pegged to the Euro because of their intense dislike of the United States. That actually makes me happy to no end because as they have been our adversaries since the fall of the Shau in 1979 and took our embassy hostage. Of course they would have large amounts of the Euro and that has caused them further currency destabilization due to the Euro's decline. IMO anything that will damage the Iranian governments ability to control it's population and possibly cause a regime change in my mind is a good thing. Anything. It's gonna cost them a lot more to pursue their dangerous nuclear ambitions and a weak economy with a rotten currency might help slow them down a bit. Imagine wanting nukes in the name of God. I bet he wouldn't agree with them about that.

Having said that though the article you posted seems ambiguous as to whether or not the Iranians are replacing Euros for Dollars. It would seem to me that the theocratic government there would have a cow at the idea of using dollars to shore up their already worthless currency. It would be an offense to Allah by the way they think. But if they are using the Dollar that would be very interesting. I really could not discern what they are doing about that but I'll try and research that some more. The article did however say that they indeed had dollars in their foreign currency reserves so I guess they do have it. I was under the impression they had a policy to reduce or eliminate the dollar long ago. I learn something everyday. So much for religious doctrine when it comes to money huh.

If we get lucky the Iraqi CBI will choose a basket of currencies (such as Kuwait), which could include commodities ie gold, oil, or other such resources at their disposal. That would be the opportunity we investors would like to see as that might cause them to RV at a much higher rate than we would think possible. Shoot I like your prediction because if the rate you suggested comes about I am gonna have to figure out how to spend that much money. I can invest what I thought I would get and still be obscenely rich beyond my wildest imaginations.

Thanks for your post. It was interesting and caused me to think about it and I like to think. However I would ask anybody who knows to share information as to exactly what the Iranian currency is actually pegged too as I have not discovered that information and I am curious about that. Thanks.

Good post automag-thank you

[kox]

Lots of good info...thanks for the post

[keepmwlknfny]

I have seen on many boards people saying the Dinar is pegged to the Dollar. One goes up the other goes up, and vice-versa on the way down. If this is the case how come we have not seen a rise in the dinar against other currencies. Now Iran is saying that the rumors of them selling Euros is false and that they are actually beefing up their reserves with US Dollars. http://finance.yahoo.com/news/Iran-CB-head-denies-report-on-apf-1889325236.html?x=0

TEHRAN, Iran (AP) -- The head of Iran's central bank is denying the country plans to sell billions in euros as the currency weakens because of Europe's debt crisis.

Central Bank Governor Mahmoud Bahmani was quoted in Sunday's edition of the state-run Iran newspaper as saying a report early last week in a local newspaper that Iran plans to replace 45 billion euros of its foreign currency reserves for U.S. dollars was "not correct."

Iran has been converting its roughly $83 billion in reserves to euros as the dollar was hit by the global financial meltdown.

Bahmani also said the inflation rate in Iran has fallen to under 10 percent in May from 10.4 percent in April.

So what does a lower Euro and higher dollar mean for us. Well if the Dinar is truely pegged to the US Dollar that means when it does RV that anyone converting their Dinar to Euros will not receive as much before the Euro collapse. This is a good thing, less Dinars needed to convert the Euro. Now back to the US Dollar. Now this is speculation but if the Dollar has risen and the Dinar has stayed flat it would be safe to say that you can buy more Dinar per US Dollar, but that is not the case. The Dinar has stayed par even with the Dollar gaining ground. It's almost as though somewhere someone is setting the US to benefit the most from the RV. It could also mean that if the dollar keeps gaining ground the RV could be less than what some people might expect. I for one like the RI. But 3.22 in todays market after the dollar gains might bring us down in the 2's. Therefore I am calling a RV/RI rate of 2.20 as long as the dollar keeps gaining ground.

well it would be nice to see an RI, but for the most part thats going to be impossible....new currency, new govt, completely different situation going on in the country then what it was before...unfortunately we are going to have to be happy with a straight up RV....of course I will be....86 cents is nothing to sneeze at people...should be more then enough for all of us to live more comfortably.....ya dig?!?!

[mrparrot]

well it would be nice to see an RI, but for the most part thats going to be impossible....new currency, new govt, completely different situation going on in the country then what it was before...unfortunately we are going to have to be happy with a straight up RV....of course I will be....86 cents is nothing to sneeze at people...should be more then enough for all of us to live more comfortably.....ya dig?!?!

I can dig.

[Traconesu02]

Thanks for the post - brought out some interesting information.