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About rockfl9

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  1. WE may have been sidetracked from the original subject so let me reiterate, although it will not set well with most (?) Dinarians. The CBI wants to remove 3 zeros from the face of the currency . Actually move the decimal point 3 places to the LEFT. 1000 becomes 1 , 500 becomes 0.5 etc. This will reduce the volume of dinar notes but not the effective VALUE in circulation. The effect will move the decimal on the exchange rate 3 places to the RIGHT. Also removing 3 zeros . Thus .00086 becomes .86 OR 86 cents per dinar. . The dinar (IQD) NOW does become one of the strongest currencies in the world. The Iraqis' want that. The CBI doesn't need to add any hard currency to the reserves. The CBI likes that. Going along with that ( It may require a law be enacted in advance) , ALL prices will be adjusted by moving their decimal points 3 places to the LEFT. Something that cost 1000 IQD will now be priced at 1 IQD. Curbing inflation and price gauging . Iraqis" will like that also, BUT this may be the one thing they might not understand and believe. . It is a central bank operation that has taken place with dozens on currencies over the last 50 years.
  2. The FCX market runs 24/7. It follows the sun. By telephone or computer there is trading taking place every minute. The traders usually work for well known financial operations and the exchange is based on trust. The FOREX is NOT the market itself but a reporting service . It takes a snapshot of the latest buy/sell prices in a market and computes a MIDPOINT. It does not mean that a trade took place at that price or that a trade took place at all , it is just the consensus of the traders at that time. A trade will take place ONLY if there is a DEMAND or the offer price is low enough for a savvy trader to make a future profit. The trader of last resort is usually the central bank of the country issuing the currency. So my point is that the system is based on supply and demand, the demand part being the most important. If there is no demand for a currency there will not be a trade at any price.
  3. The spot price of gold today is $1300 not $2000.. makes a tonne worth about $45 Mil.
  4. U R correct EC.. I must have had my LOPSTER hat on .. Always LOPPING 3 zeros Yes, some of them think that the gold is not included in the reserve value. When You can look at the CBI annual report itshows the gold as being included inthe reserves total. It is about 5% of the reserves. Some wild explanation of how to compute the value of a tonne of gold!
  5. The Iqd IS PEGGED to the usd.. Currently aprox 65M USD to support a .00086/USD rate .. A one cent RV would require aprox 650 M USD in the reserves.. Eight times the TOTAL annual oil revenues... It is IMPOSSIBLE. Could they come off the peg. I dont think so . The PEG is GOI fiscal policy , the CBI is not in control. Plus the SBA give the IMF some control here also.. When a currency is allowed to FLOAT the central bank looses control of the rate and it usually goes DOWN and looses instability.. The GOI needs STABILITY.
  6. Obviously since the Rupiah rate has been increasing the economy has suffered some inflation , but 40% over 10 years is not too bad. We really dont know the real condition of Iraq because the CBI has been using the "auction" to maintain the rate artificially .. However the real cost of imported goods must have increased in the last 5-6 years at least 20%. It has to show up in the "street rate" sometime .It may be that What is published as that rate is also being manipulated.
  7. The need to RD is not based simply on the exchange rate. To lift the zeros and then have to put more zeros in because the economy is not stable solves nothing. There needs to be signs of sustained natural stability. A country can function OK with multi-zero currency ,it is a matter of choice .. Although it can be messy with high value purchases in cash. If a county can begin using plastic (CC and debit cards) it would not need to RD the currency . The problem is the small value notes need to be replaced at higher frequency . the solution is coinage , but it is awkward to place a lot of zeros on them .
  8. With a LOP the purchasing power of the Iraqi Dinar ( or whatever they will call it ) will go from .00086 to .86 That is a great increase .. All Iraqis' will be happy. No Iraqi will end up loosing any value ! The CBI will get this done with only the cost of printing . About $35Mil and they could do it in stages. However if they do I don't think it could be traded outside the country until all the old Dinar has been recovered. They know a lot of IQD was destroyed, stolen or smuggled out of the country in the last 15 years . With a RD they wipe the slate clean.
  9. Re: Shabibbi at the Bank of England.... FYI The BOI was tasked with restoring the Iraqi Banks by the CPA .. Shabibbi was their choice at the time So they know him well.. Obviously an opportunity for him to retire into a more hospitable environment..
  10. After a LOP the new dinar will have an exchange rate of $0.86 , higher than 97% of all currencies! An Iraqi could boast of having one of the worlds strongest currencies. The exchange would be 1.18 dinar / USD. Perhaps that is what the Ministry of plannings' report was counting on at the time. It could also lead to metal coinage. When a currency issues coins it is usually an expectation of long term rate stability. A LOP is a proved , managed process with NO surprises. Nobody gains or looses . Some will say if a LOP is good , why haven't they done it . Truth is Shabibbi knew the 2003 issue would need to be refreshed ,he wanted to but could not get thru the legalities in time. He got removed and the new Gov didnt get on board with the plan before the drop in oil made it low priority. The result was simply adding more of the 3 zero notes in 2012. Now even those notes are getting worn out. It is decision time again. The problem is cost , at least 35 million dollars. There is also the question of the Kurdish language. The Arabs do not want to do that . The Kurds will insist.
  11. THIS is a serious question for any "investment" . To become a profit there MUST be a buyer willing to pay more for the item. Banks dont BUY foreign currencies they are only an agent for the buyer. Typically the countries central bank is the buyer of last resort, BUT we know the CBI cannot repurchase IQD at even the quoted rate today. It would be a giant leap of faith for someone to buy IQD at 1/10 of a cent expecting a profit.
  12. WELL , I think the GOAT has been reading stuff from the tank! Now it (or she) says that the banks will have a big customer to buy up all the dinar at the big EVENT ! The UST . She probably ( Being an Austrian (?)) doesnt know the UST is not allowed to buy foreign currency as an investment and that the UST doesnt have any spare dollars to invest anyway .. The UST is heavily in debt ...It would have to borrow more. The money will have to come from private investors and i dont think there are many of them .. are
  13. I dont count any of the rumors and the translations of some articles are suspect.. Some of the articles are quoted from pumper sites as real news but it is not. I do believe reports by the CBI that the current exchange rate is correct and they are planning to keep it stable . That means to me that they do not have intentions to change it. Although things can happen that are out of their control. The current M2 of I raq is 88 TRILLION dinar an INCREASE of 4T in the last 5 years , The reserves however have decreased fro 69B to 61B in the same time frame. WHY , Because the CBI/MOF have been using the reserves to keep the rate stable. as well as printing more unsupported currency. The IMF auditors should blow the whistle on this but they must be careful to avoid a breach of confidence in the CBI.
  14. There was a documentary on Iraq on the NGEO Channel last night (very late) ...Mosel and Faluga are ghost towns the few people there are squaters in the few liveable structures . The reporters were heavily censured on what they could show or say. In the smaller towns they were still ferreting out out ISIS posing as civilians . Bagdad and arbil had a lot of unfinished construction. Projects that have run out of funding. Obviously NOT a rich country.
  15. I think dinarins expect that the day will come when the CBI simply pulls the trigger and sets a new rate and that will some how induce banks around the world to begin buying unlimited amounts of IQD ... Ridiculous !!!! Any good book on international finance will tell you that outside of the native country a currency is priced on a supply/demand basis. The demand is based on what the currency will provide in goods and services. Other then oil which is traded in USD Iraq has little else to offer. A bank will take in a foreign currency ONLY when it has a customer order to buy it. A bank cannot speculate by purchasing a currency , it is too risky. Iraq will have to LOP someday , but this is not the year... The CBI's priority right now is to get the reserves up to the level it needs to be. Currently they are about $10B shy. That is the result of their efforts to prop up the exchange rate.
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