Central Bank plans to launch three categories after deletion of zeros from the Iraqi dinar

[the wolf]

IF Iraq is going to LOP, then why would CBI be giving away 250 million USD daily during aucitons just to get dinar back.....

So...CBI recycled them back by exchanging them with GOI for paying salaries, bill.....and all. But they were doing OK with 150 million USD daily auctions. So what is the daily surplus of 100 million USD for...?

If i am CBI, and i am going to LOP...I see no reason why i would want to part ways with my 250 million USD daily....

They have to buy the dinar in order to maintain the exchange rate. If they aren't willing to buy it with US dollars then the exchange rate will move in the wrong direction.

[graml123]

I wonder just how many Iraqi citizens understand LOP? I do not think there would be any way they could explain a LOP to them so that they would get just what happened to their money. I do not think there will be a LOP. This is not just a gut feeling but a decision based on a lot of reading and reading and reading. I have enjoyed the debate on this topic for the most part, still some unnecessary child like behavior but what can you expect from a forum like this. I think we are close to the end of this ride.

[JWJW11]

I am still under the impression that they had to RV as it was one of the stipulations to be removed from chapter 7. I have read it on many posts in the past, I'm not making it up...is this true or not?

I have also read, and no I have looked again and cant find the site/link now, that when the new Dinar was printed they also printed lower denomination notes in the same type of style that were put into storage at the CBI. How can they RV if they didn’t have small denominations to make change.

Maybe,IMO, if they have smaller denomination in Iraq, which I think they must, they may be thinking they could take the larger denominations off the street by trading them for smaller with the people of Iraq. The average Iraqi will want his change back after buying a loaf or bread!!! Traders will have to give change....

De La Rue Currency site, who printed the Iraqi dinar stipulates a new currency issue involves four times the number of notes as a normal annual renewal. Designing a new note takes a year to 18 months. My guess is they already have the lower denominations.....

Link; - http://www.managementtoday.co.uk/news/409548/UK-DE-LA-RUE-STRIKES-NEW-NOTE/?DCMP=ILC-SEARCH

Adam has stated several times...removal from chap7 is not necessary for an RV.....economic sactiions have been removed for quite some time now

I wonder just how many Iraqi citizens understand LOP? I do not think there would be any way they could explain a LOP to them so that they would get just what happened to their money. I do not think there will be a LOP. This is not just a gut feeling but a decision based on a lot of reading and reading and reading. I have enjoyed the debate on this topic for the most part, still some unnecessary child like behavior but what can you expect from a forum like this. I think we are close to the end of this ride.

Agreed....look at it as simple as this.....w the market flooded with USD....no one has faith in the dinar right now....a LOP puts their faith back into the dinar???? NOT!!!

[keepmwlknfny]

me 2

The 50,000 lira note ceases to be redeemable on 4 November 2009, and the 100,000 lira note on 4 November 2011, so you swap the currency if you had in possession these last two notes?

Yep...apparently if you still have them, you can redeem them until those dates, and then the rest of the bills are still accepted until 2015 which is 10 years from when they lopped 6 zeros......

Smarty. Trust you to have the answer.

I guess that means we don't have to worry about them closing the border then.

Whatcha got for question number 2??????

Its just I remembered reading something similar when I was digging into Turkey and what happened over there....pretty interesting though...

Yea now reading that we might not have to worry so much about exchanging it at least should the worst happen! They surely didnt do that with the Saddam bills, or I wonder if there is actually some kind of clause that exists to where if you still had them you could turn them in??

What was the 2nd question again? lol

[lotsofdinar]

I am still under the impression that they had to RV as it was one of the stipulations to be removed from chapter 7"

An RV and Chapter VII have nothing to do with each other.

[carlablum]

Central Bank plans to launch three categories in addition to coins, after deletion of zeros from the dinar

Date: Tue 01/15/2012 10:57

Central Bank of Iraq revealed its intention to launch a large three categories after deleting three zeros from the Iraqi dinar, pointing out that the process of replacing the currency will take two years.

The deputy governor of the Central Bank of the appearance of Mohammed Saleh in an interview that "the Bank will present three classes a great addition to the categories of mineral, after the deletion of three zeros from the Iraqi dinar," noting that "the process of switching would reform the system of currency management and ease of use."

Saleh added that "the three categories consist of 200 dinars, which is equal to 200 thousand dinars at the present time and a 100 dinars, which is equal to 100 thousand dinars, and the category of 50 dinars, which is equal to 50 thousand dinars, in addition to the coin of the category of the dinar and Dinarin as well as half and quarter dinars and 100 fils and dirham ".

Saleh indicated that "the deletion of three zeros from the Iraqi dinar would shorten the number of banknotes of four billion and paper, which is equal to 30 trillion dinars exist in the Iraqi market to one billion and 800 million paper only," asserting that "the currency exchange will not affect the per capita income or over its wealth or its contractual obligations. "

Saleh pointed out that "the Board of Directors has approved the decision to delete the zeros after the completion of designs currency bearing the legacy of Iraq and its history and civilizations, as well as for discussion by the Financial and Economic Committee of the Council of Ministers," noting that "the Bank pending the Board's approval to begin the replacement of the new currency and which must be with the new financial year and proposed by the Bank with the beginning of the year 2013. "

Salih stressed that "the process of replacing the currency will take two years to prevent any disruption in the process of delivery and receipt," explaining that "the banks will continue to receive the old currency for ten years as rights and not negotiable."

The central bank has been accused in the (12 September 2011), government agencies of obstructing monetary reform and vowed to sue, blaming the authorities responsible for exposing the financial interests of the country to danger.

He said an adviser to Prime Minister for Economic Affairs (25 August 2011), to raise zeros from the currency is the biggest corruption in Iraq if it was during this period, and fall under the name of tampering with the economic, warning of "mafias currency" is preparing to rig the trillions of Iraqi dinars to replace them in the light of the planned changes.

The Iraqi Central Bank Governor Sinan Shabibi independent bodies during a meeting with Prime Minister Nuri al-Maliki, which took place in the (June 19, 2011), his willingness to create all the supplies to replace the Iraqi currency.

It is noteworthy that some economists believe that Iraq is ready for the time being to delete the zeros of the Iraqi dinar, pointing out that the deletion needs to be a security and political stability as well as economic stability.

http://translate.goo...ew%26id%3D11833

[keepmwlknfny]

so base on this article the rate should be $.86.

Now if they lop(it is not happening) that's mean their 30TD will go down to 30BILLION DINARS.

we all now that the budget is about $100B =117B IQD after the new rate.

so as you see they will have a big problem with money supply if they lop.that is why cbi will rv and not lop.

you can't compare Turkey to iraq

what was the exchange rate of the turkish lira before they lop?

The money supply is not responsible for funding the budget......Oil sales fund the budget. So the money supply does not have any affect on whether they will have enough to cover budgetary expenses....

In some ways they are very similar, and apparently the way they went about removing the zeros, is what Shabibi and the CBI are modeling their plan after. Both countries have suffered from hyperinflation, having low exchange rates, and an extremely diluted money supply due to the periods of hyperinflation. Turkey was able to remove the affects from failed monetary policies in the past and now have a much stronger valued currency, and they gained confidence in the currency with its own citizens. They also used the USD as another accepted currency (similar to Iraq) and also run currency auctions of USD.....or at least were but Im pretty sure they still do.

They really aren't that different in that respect....

[Wheeler]

IF Iraq is going to LOP, then why would CBI be giving away 250 million USD daily during aucitons just to get dinar back.....

So...CBI recycled them back by exchanging them with GOI for paying salaries, bill.....and all. But they were doing OK with 150 million USD daily auctions. So what is the daily surplus of 100 million USD for...?

If i am CBI, and i am going to LOP...I see no reason why i would want to part ways with my 250 million USD daily....

They don't run the auctions for fun, they do it to maintain the exchange rate. Since the US departed less people trust the currency, so they go to the local bank and trade their dinar for USD. Their local bank goes to the CBI currency auctions to replenish their supply of USD. If the CBI refused to buy back the 250 billion dinar that's running though the auctions lately, the exchange rate would be getting worse.

Whether they lop or don't lop they still have to maIntain the exchange rate, hence the auctions.

[lotsofdinar]

Yeah, a lot has been made of these auctions, when in fact they are just doing what Central Banks do.

[Wheeler]

Agreed....look at it as simple as this.....w the market flooded with USD....no one has faith in the dinar right now....a LOP puts their faith back into the dinar???? NOT!!!

A lop isn't a magic fix all, but it absolutely does help restore their confidence in their currency because it removed the effects of past hyperinflation. Think about it, every time an Iraqi looks at their currency they are reminded of Saddam printing trillions of dinar and screwing the entire country.

A big RV would DESTROY the confidence in their currency. NO Iraqi would want to hold onto a single dinar if the government one day just decided they're now worth a dollar each.

Think about it. Say you work for me, and I pay you in jelly beans. I pay you 11,700 jelly beans per day. Now, you don't trust the jelly beans. You don't trust that they're worth as much as I say they are, you're worried that one day your local grocer won't accept jelly beans, or that one day he'll tell you that your morning Starbucks isn't 1000 jelly beans anymore, it's 5,000 jellybeans. And you don't want that, so you go to the bank and exchange your jellybeans for USD, at 1170 to one, because you'd rather have 10 USD than 11,700 jellybeans.

Now think what would happen if, one day, I told you the jellybean (the one that you don't even trust to be worth 1/1170th of a USD) was now worth 1000 times as much as it used to be, so now I'm only going to pay you 11.7 jellybeans instead of 11,700.

You didn't trust the jellybean to be worth 1/1170th of a dollar, but you ARE going to trust to be worth the same as a dollar? NO WAY. you're going to get rid of every jellybean you get as soon as you get it. You might even refuse to be paid in jellybeans at all.

Exact same situation as the dinar. They don't trust it to be worth .00086, they're sure not going to trust that it will hold its value at .86 or 1 to 1. If there was a big RV Iraqis would be cashing in their dinar even quicker than Americans. Every Iraqi with any dinar at all would be cashing them in and hoarding the USD they get.

[Elixirbaby]

Saleh indicated that “the deletion of three zeros from the dinar Iraq would shorten the number of banknotes of four billion and paper, which is equal to 30 trillion dinars exist in the Iraqi market to one billion and 800 million paper only, “asserting that” the currency exchange will not affect the per capita income or wealth, or its contractual obligations. “

Can someone help me understand this line? I do understand the reducing money supply part. It's the 4 billion and paper to 1 billion 800 million paper only?

[Wheeler]

Saleh indicated that “the deletion of three zeros from the dinar Iraq would shorten the number of banknotes of four billion and paper, which is equal to 30 trillion dinars exist in the Iraqi market to one billion and 800 million paper only, “asserting that” the currency exchange will not affect the per capita income or wealth, or its contractual obligations. “

Can someone help me understand this line? I do understand the reducing money supply part. It's the 4 billion and paper to 1 billion 800 million paper only?

He's talking about the number of bills/notes in circulation. Every new 50 they print will replace 2x25,000 bills, every 100 will replace 4x25,000, and every 200 will replace 8x25,000 (or 20x10,000, or 40x5,000, etc). So the total number of bills in circulation will be reduced by a significant amount.

[keepmwlknfny]

Saleh indicated that “the deletion of three zeros from the dinar Iraq would shorten the number of banknotes of four billion and paper, which is equal to 30 trillion dinars exist in the Iraqi market to one billion and 800 million paper only, “asserting that” the currency exchange will not affect the per capita income or wealth, or its contractual obligations. “

Can someone help me understand this line? I do understand the reducing money supply part. It's the 4 billion and paper to 1 billion 800 million paper only?

Im pretty sure its talkin about the physical number of actual notes (not the value)....because not all of the current bills would end up being traded for another note. Still waiting on more info as to what the new denominations would be but it seems like maybe they could be planning to use more fils/coins....

[Elixirbaby]

He's talking about the number of bills/notes in circulation. Every new 50 they print will replace 2x25,000 bills, every 100 will replace 4x25,000, and every 200 will replace 8x25,000 (or 20x10,000, or 40x5,000, etc). So the total number of bills in circulation will be reduced by a significant amount.

Im pretty sure its talkin about the physical number of actual notes (not the value)....because not all of the current bills would end up being traded for another note. Still waiting on more info as to what the new denominations would be but it seems like maybe they could be planning to use more fils/coins....

Thanks. That helps.

Go Rv

[JWJW11]

Wheeler.......I couldnt disagree with your thought process more than I do....this whole entire intereptation of whats going on.....your so far off you should just sell me your dinar now

The US is gone buddy....Iraq is fighting to stand on their own with trillions of dollars flowiing into the country....time for you to start thinking outside the box....its easy to understand....what they want you to understand....its the unknown thats a *****

A lop isn't a magic fix all, but it absolutely does help restore their confidence in their currency because it removed the effects of past hyperinflation. Think about it, every time an Iraqi looks at their currency they are reminded of Saddam printing trillions of dinar and screwing the entire country.

A big RV would DESTROY the confidence in their currency. NO Iraqi would want to hold onto a single dinar if the government one day just decided they're now worth a dollar each.

Think about it. Say you work for me, and I pay you in jelly beans. I pay you 11,700 jelly beans per day. Now, you don't trust the jelly beans. You don't trust that they're worth as much as I say they are, you're worried that one day your local grocer won't accept jelly beans, or that one day he'll tell you that your morning Starbucks isn't 1000 jelly beans anymore, it's 5,000 jellybeans. And you don't want that, so you go to the bank and exchange your jellybeans for USD, at 1170 to one, because you'd rather have 10 USD than 11,700 jellybeans.

Now think what would happen if, one day, I told you the jellybean (the one that you don't even trust to be worth 1/1170th of a USD) was now worth 1000 times as much as it used to be, so now I'm only going to pay you 11.7 jellybeans instead of 11,700.

You didn't trust the jellybean to be worth 1/1170th of a dollar, but you ARE going to trust to be worth the same as a dollar? NO WAY. you're going to get rid of every jellybean you get as soon as you get it. You might even refuse to be paid in jellybeans at all.

Exact same situation as the dinar. They don't trust it to be worth .00086, they're sure not going to trust that it will hold its value at .86 or 1 to 1. If there was a big RV Iraqis would be cashing in their dinar even quicker than Americans. Every Iraqi with any dinar at all would be cashing them in and hoarding the USD they get.

[Wheeler]

Im pretty sure its talkin about the physical number of actual notes (not the value)....because not all of the current bills would end up being traded for another note. Still waiting on more info as to what the new denominations would be but it seems like maybe they could be planning to use more fils/coins....

"Saleh added that "the three categories consist of 200 dinars, which is equal to 200 thousand dinars at the present time and a 100 dinars, which is equal to 100 thousand dinars, and the category of 50 dinars, which is equal to 50 thousand dinars, in addition to the coin of the category of the dinar and Dinarin as well as half and quarter dinars and 100 fils and dirham "

Looks like coins will be 1 dinar, half dinar (500 fils), 1/4 dinar (250 fils), and 100 fils (roughly equal to our dime). A dirham is 1/100th of a dinar, so 10 fils, equivalent to our penny.

Only one I'm not sure on is what a dinarin is. Could be 1/20th of a dinar (50 fils), equivalent to a nickel. If its 50 fils it would make their coin denoms essentially identical to the ones we have here, they'd have their dollar, half dollar, quarter, dime, nickel, penny. Could also be 2 dinar or 5 dinar or something though.

Edited January 15, 2012 by Wheeler

[Wheeler]

Wheeler.......I couldnt disagree with your thought process more than I do....this whole entire intereptation of whats going on.....your so far off you should just sell me your dinar now

The US is gone buddy....Iraq is fighting to stand on their own with trillions of dollars flowiing into the country....time for you to start thinking outside the box....its easy to understand....what they want you to understand....its the unknown thats a *****

What's pretty easy to understand is that Iraq isn't a very stable place. Bombings, government infighting, Maliki acting like a tyrant, the potential for civil war, the potential for the Kurds to break off and form their own country (and start their own currency), the potential for invasion from Iran, etc, etc, etc.

If there was a big RV any Iraqi with half a brain would exchange all his dinar for some other commodity, whether it's USD or silver or renminbi or whatever. They'd rather have fifty cents than a 500 dinar bill right now, you think that they wouldn't also prefer 50 dollars, or 500 dollars, to that same 500 dinar bill? They'd be cashing out just as quick as you would.

[JWJW11]

What's pretty easy to understand is that Iraq isn't a very stable place. Bombings, government infighting, Maliki acting like a tyrant, the potential for civil war, the potential for the Kurds to break off and form their own country (and start their own currency), the potential for invasion from Iran, etc, etc, etc.

If there was a big RV any Iraqi with half a brain would exchange all his dinar for some other commodity, whether it's USD or silver or renminbi or whatever. They'd rather have fifty cents than a 500 dinar bill right now, you think that they wouldn't also prefer 50 dollars, or 500 dollars, to that same 500 dinar bill? They'd be cashing out just as quick as you would.

Spoken like a true Westerner......we could say the same about pretty much every country in the world....if you think you will EVER see Iraq in a democratic state...think again...they will always have their issues....outside the religious culture....look who they are learning from....you kno everytime you negative nellys refer to any type of an RV..."huge or big" are always in there....most here arent expecting a crazy RV but an RV period is what we look for....they must use the Dinar at some point and they must dedollarize at some point....and they MUST get their banking system going.....that much we do know....

After considering many things in this....i choose to view this in a manor that promotes growth for me one way or another....Ive learned alot and think there is a much bigger plan than we can even really consider....due to the extrodinary change that this will bring....as they say "woulda shouda couda"

[waveone]

"Saleh added that "the three categories consist of 200 dinars, which is equal to 200 thousand dinars at the present time and a 100 dinars, which is equal to 100 thousand dinars, and the category of 50 dinars, which is equal to 50 thousand dinars, in addition to the coin of the category of the dinar and Dinarin as well as half and quarter dinars and 100 fils and dirham "

Looks like coins will be 1 dinar, half dinar (500 fils), 1/4 dinar (250 fils), and 100 fils (roughly equal to our dime). A dirham is 1/100th of a dinar, so 10 fils, equivalent to our penny.

Only one I'm not sure on is what a dinarin is. Could be 1/20th of a dinar (50 fils), equivalent to a nickel. If its 50 fils it would make their coin denoms essentially identical to the ones we have here, they'd have their dollar, half dollar, quarter, dime, nickel, penny. Could also be 2 dinar or 5 dinar or something though.

After reading this article several times so as not to misinterpret the intent- if that is possible, there seems to be little question that Darth- Saleh is discussing some form of a LOP. Perhaps an RD/RV scenario which amounts to a zero-neutral RV if I understand it correctly. Although there are conflicting statements in other articles which clearly describe adding value to the dinar as well, conventional wisdom would indicate that some form of LOP is the likely scenario. In which case, we speculative investors have funded the Iraqi's and US operation with an additional 25% of our income- at the minimum. THat would be disconcerting at least....

While I am not a LOPster by virtue of the FACT that this issue is not solely an Iraqi decision contingent upon what Iraq via Shabbibi, Mailki et al decide, despite what people, especially LOPster are conditioned to believe . Alhtough there is stated & historical evidence to support that position. Regardless the World does not work according to Nationalistic whim- not any more. Nations are corporations or more speicfically money making entities built around fiat currency and other ponzi schemes. Period. Thisis not tin foil hat theory which has no documented basis either. There is also documented and historical proof to substantiate this premmise as well.

My only question to the LOP proponents is: Why are you or anyone else for that matter still waisting your time in this investment? Why not sell your dinar and get into a more profitable venture. Like right now?

For some admittedly fairly bright individuals, the velocity of money alone makes this venture a truly pound -foolish move? Given our own economy , having held this currency for such long periods is a losing proposition.

I would be curious to know the answer to this sans the hyper stupid LOL, Ha Ha Ha and other foolish retorts that seem to follow direct questions........

Edited January 15, 2012 by waveone

[Duckhead]

***///

meaning that it will still be honoured as legal tender to a point and after that it'll no longer be honoured, 'cause they've given you enough time(10 years) to cash it out and make the switch to a viable/acceptable form of their currency....

I think this is very similar to what was done with the $100,000 and the $10,000 bill in the US. The goverment used the bills internally for a time to handle large internal transactions and still maintained the face value. Now I understand that there are many more 25k notes than the above mentioned, but the CBI will/is destroy/destroying as many as possible. I know there are some that will disagree and that's fine, but to me this eliminates the lop possibility if this 10 year translationis accurate. If they are simply going to say the 25k is a new 25, then why would they possibly keep using the 3 zero notes internally for 10 years? Why not require the government do what the citizens will have to do in a lop scenario?

[JWJW11]

Very nicely put....

After reading this article several times so as not to misinterpret the intent- if that is possible, there seems to be little question that Darth- Saleh is discussing some form of a LOP. Perhaps an RD/RV scenario which amounts to a zero-neutral RV if I understand it correctly. Although there are conflicting statements in other articles which clearly describe adding value to the dinar as well, conventional wisdom would indicate that some form of LOP is the likely scenario. In which case, we speculative investors have funded the Iraqi's and US operation with an additional 25% of our income- at the minimum. THat would be disconcerting at least....

While I am not a LOPster by virtue of the FACT that this issue is not solely an Iraqi decision contingent upon what Iraq via Shabbibi, Mailki et al decide, despite what people, especially LOPster are conditioned to believe . Alhtough there is stated & historical evidence to support that position. Regardless the World does not work according to Nationalistic whim- not any more. Nations are corporations or more speicfically money making entities built around fiat currency and other ponzi schemes. Period. Thisis not tin foil hat theory which has no documented basis either. There is also documented and historical proof to substantiate this premmise as well.

My only question to the LOP proponents is: Why are you or anyone else for that matter still waisting your time in this investment? Why not sell your dinar and get into a more profitable venture. Like right now?

For some admittedly fairly bright individuals, the velocity of money alone makes this venture a truly pound -foolish move? Given our own economy , having held this currency for such long periods is a losing proposition.

I would be curious to know the answer to this sans the hyper stupid LOL, Ha Ha Ha and other foolish retorts that seem to follow direct questions........

[waveone]

double post-deleted

Edited January 15, 2012 by waveone

[Carrello]

nm

Edited January 15, 2012 by Carrello

[JWJW11]

Hi, I hope you brought a helmet.

Lol this thread just became the largest thread in DV history

[waveone]

Hi, I hope you brought a helmet.

Don't need one. It is a relevant question that I ask, and in turn even ask myself on a regular basis.

Any turrette style stupid retort will only prove that particular individual is threatened and is not entirely forthcoming. Or else, they are so taken with their own sense of self importance, that they possess no true objectivity in the first place. Beside that I live in the real world. Internet tough guys/geniuses don't exist.

Believe me, after being shot at, or having stared down the business end of a weapon, everything else is down hill.....

Edited January 15, 2012 by waveone