Iraq to revalue dinar and introduce new notes in September 2012

[Goldiegirl]

here you go: http://en.wikipedia.org/wiki/French_Franc When they did a 100:1 RD in 1960 there were both old 1 franc coins and new 1 franc cons.

I thought you were selling your dinar and leaving. Humm must like us here.

[dvforumuser]

Please bring the facts in for Iraq!! No need for a History Class!!

That was for FreckledFuzz who claimed you can not have an RD where both old and new currencies include the same denomination. Clearly that is false and the 100;1 RD in France in 1960 is proof of that.

[Carrello]

Aaahhhhh hhhaaaaa! Iraq will not be printing their own currency, and the De La Re machines are not printing devices. I feel vindicated.

Thank you Dinar Dana!

Zig, thank you for your breakdown. Good thoughts from a thinking man. I will see if I can find anything on the article, but I am headed into a hot kitchen for the morning, up to my elbows in Marinara, grated Cheddar, and raising dough.

Speaking of rising dough......it's an omen I tell ya!

Edited February 25, 2012 by Carrello

[dvforumuser]

I thought you were selling your dinar and leaving. Humm must like us here.

Sure what's not to like? I am selling, few are buying however.

[zigmeister]

Oh goody the Saturday morning "lop" article. How can we get by a weekend without them! It seems pretty clear until you start reading it!

The Kurdish Globe

Views differ on financial and socioeconomic impacts

Despite fears of a negative economic impact, the Central Bank of Iraq will remove three zeros from Iraqi dinar notes and print new banknotes in 2013.

The new bank notes, probably they are referring to the lower denoms will be introduced as well as coin. Then in 2013 they will introduce the new currency with the three languages and why english is included is beyond me. I did not think overall they cared much for us english speaking people. And they figure everything will be complete by September 2013, a year in nutshell when they have collected all the old notes.

A grant according to this article is what they are going to use for the program. So a grant is going to fund the new currency. I would assume a grand would be in the 2013 budget. However my questions is if so, if they are releasing the smaller denoms in September of 2012 wouldn't that be part of the grant?

Some questions answered for me; "According to the agreements, the new bill will be printed by a European company Their delarue machines cannot print. They won't be printing the new currency.

"The process of removing zeros from the currency will contribute to dealing better with inflation, facilitate economic cooperation with international banks and reduce the differences in [standards of] living in society," Abtan explained. Mahma Khalil, another Member of the Iraqi Parliament and official spokesperson of the Economic Committee says an agreement has been reached about the mechanisms of introducing the new banknotes after a series of meetings and discussions with the CBI Governor Dr. Sinan Al Shibibi.

As much as I like Dr. Shabibi, in this article it appears he has plans to do this. But; The Security Commission says deleting the zeros will have a negative impact on financial trade in the stock market. Other opponents of the move argue it would pave the way for money laundering and want the government to reconsider its decision. The Security Commission does not. Right now as this article reads, I want the Security Commission to win out. However I do not know what their recommendations entail or if they have any.

The CBI apparently has consulted with Parliament and representatives to see if a law needs to be passed, according to this article they have done so because the Economic Committee on Feb 19 was introducing new legislation for the purpose and also address inflation in Iraq. I don't have time right now, got to head to the gym soon(ha ha), I will later. Or if someone wants to check on Feb 19 articles and see if any reflect the Economic Committee announcing this.

He added the exchange rate between the new banknotes and the old ones would be 1:1,000.

Because I am in a hurry, I did not finish what I was posting....

However, while I read this article to be a definite article pertaining to a re domination down to the 1:1,000 exchange rate I am not going to let it screw up my day. One reason primary is they seem to be determined to bring in the dinar we now hold. If they are going to lop, there really is no need to do that. The other is, they need to facilitate payment systems and control the banking transactions yesterday! And inflation is rising. Also in another article the other day an article came out that Iran was responsible for the 10,000 dinar counterfeiting. It was a professional job according to the article, and the reason they counterfeit the 10,000 dinar was based on a rumor Iraq was about to change it's currency. The idea on the whole was to bring Iraq down economically. Now where did they hear this rumor? From the Guru's or being a neighbor they know more than they should? The counterfeit currency is very detailed and exact. I know kind of weird thing to get my attention.

So people its another lop story, forget about it, I agree with Stryker keep your mind open and eyes ever watchful for what they are doing and not what they say they are going to do. We know they are bringing the dinar in, hopefully they are stashing or destroying some of it and not sending it out the door. This is going to go down however it will, it's Iraqs currency, they will do what they want to do.

Keep cheerful, and optimistic but know the other side could come to fruition.

Cheers, now to prepare for the gym

[bamagirl]

An RD with a subsequent RV makes alot of sense for a rebuilding nation if they are willing to take YEARS for people to trust and use the currency.....I don't believe Iraq is willing to spend years on this, they are ready NOW. They are ready to emerge now and be a world player, an RV is the only way I see that being accomplished. These are JMO and I don't have a link but I don't think you can compare Iraq with any other country that has RD'ed......Have a great day all and quit worrying so much!

[zaborniake]

You can put whatever spin on this article that makes you feel better but it all boils down to the stated exchange between old and new bills .....you can't really twist that around and its telling us there won't be an even exchange, old for new

Yep.

[Rdy_Stdy_GO]

Keep, your probably right....

Can they screw us that easily? Yes.

-------------------------------------

Timeline EXAMPLE:

The GOI and CBI set the time for the activation of the process as September 1, 2012 @ 00:00:01 a.m.

Through the previous "education" and "awareness" campaigns (quote from Saleh in another thread/post Here) it was made known that the old vs. new currency exchange rates will be 1000:1 (see reference in post #1) beginning Sept 1 @ midnight; a 25k note will become equal to 25 IQD. A 1000:1 exchange of old note vs new.

At 00:00:01 on Sept 1, the program exchange rate goes from 1169:1 IQD/USD to 1:1 on the world market. At this time all Iraqi bank account values are reduced electronically by 3 zeroes.

The next day, the People, with their new "education", begin to exchange notes @ 1000 old to 1 new their soon-to-be obsolete notes at an extreme pace to get rid of the old and acquire the new so they won't get stuck with it. Not just through day-to-day transactions, but lining up at the banks and money changers to get rid of the old notes (Do YOU remember how it was when the Saddam dinar exchange was started?) as fast as possible.

The old and new notes then coexist for a year until on Sept 1, 2013 they become obsolete and no longer accepted as a viable currency.

Over the next 2-3 years the exchange rate is incremented upwards to 1:2.89 IQD/USD (last appx rate before devaluation).

The GOI and CBI have now achieved their goal of bringing the Dinar back to being a prominent currency in the world market.

------------------------------------

Yes, it's that easy to screw everyone over.......

Again, I'm not a Lopster and God knows I need the RV, but I'm not blind or stupid, nor do I have my head in the sand either and everything I've seen of what they are doing over the last 7 years points to "bad news". I wouldn't trust them to do anything but what benefits themselves (the CBI) in the long run.

If they were going to straight RV @ 1:1 then release the new denoms and remove the old notes, then no one would need an "education". It would be very straight forward; 25=25 and 25k=25k. It would be like adding the $2 bill back into circulation. No impact. Who cares. An "education" would only be needed if you were going to coexist 2 currencies of different nominal (face) value but the same cash value and buying power (referenced by Saleh in the statement link above) so the people don't get confused or freak out when they're handed 1 dinar for every thousand.

If they did a straight RV, every goat herder in the country would own a house and a Beemer and what happens to costs of living in rich countries? Prices out roof; aka inflation. Why would the CBI allow it? They won't. Their not that ignorant.

People, not everything can be "smoke". Where there's smoke, there's fire. And Bankers are notorious CHEAPSKATES. It's in there nature.

For what it's worth...

JMHO

Dang "Fish...," Ya kinda smacked that nail right on the head. Plus one for keeping it real my friend... very sensical....

GO RV...

[Abarvets]

This is from a trader in erbil!!!!!! Not from cbi or parliament!!!! Not an official source guys.

This is from a trader 100% correct. Let us also not forget that the CBI just announced they could only charge a 10 dinar spread. Some places it was north of 100. It just cut his business so of course the trader is going to give a negative interview! For goodness sake they just got their profits cut. Think big picture here. Have a great day!

[HolySpirit]

They can't tell us what the rate will be. They would cause chaos at this point. I haven't read all of the posts in response to this article, and maybe someone has a logical response for this.

I do, and so should everyone else. The CBI has straight out said, probably a half dozen times, that the "initial" hard RV rate will be 1:1.

[dvforumuser]

I do, and so should everyone else. The CBI has straight out said, probably a half dozen times, that the "initial" hard RV rate will be 1:1.

I don't think you can produce any CBI document that says there will be an RV. They have said the new (post RD) dinars will be 1000:1 with the current dinars and that puts them at .86 dollars per dinar which is close to 1:1 but not exactly. They could also RV by just enough to put the current IQD at .001 so that it would go exactly 1:1 for the new dinars, but its not clear that they will do so or not.

[Sector]

If anybody is actually listening to these lop gurus that is like listening to okie and the boys. The lop gurus / lopsters are here to promote propaganda which is anti RV.

This sit back and enjoy the RV ride.

dvforumuser What time dose your co-worker dinarck start today I can't wait for him to spend his weekend promoting a lop like you are doing. Do you guys get paided overtime?

"Propaganda is a form of communication that is aimed at influencing the attitude of a community toward some cause.

dvforumuser what is your cause?

http://www.umflint.e...rry/Money7a.htm

LAW OF ONE PRICE (LOP): starting point for understanding ex-rates in the LR.  Also called the "price equalization principle": for homogeneous, identical goods, the price of the commodity should be the same (equalize) throughout the world, especially when barriers to trade, transactions costs and transportation costs are low.  Says that foreign prices (Pf ), domestic prices (Pd) and ex-rates (e) are linked through the Law of One Price which says: Pd ($) = e * Pf (£) , where e = $ / £.   LOP says that similar products should sell for the same price in both countries, after converting the foreign price into dollars.

Example: Price of gold in U.S. = $260 (Pd) , Price of gold in Canada = C$400 (Pf) and e = $0.65 / C$.

LOP holds: $260 = ($.65/C$)  x  C$400, says that gold sells for the same price ($260/ounce) in both the U.S. and Canada, after converting the foreign price into $.  The price of gold should equalize around the world and sell for about the same price everywhere: $260/ounce.  What if somewhere in the world, P < $260/oz, what would happen?  What if somewhere in the world, P > $260, what would happen?  ARBITRAGE: Riskless profits from exploiting price discrepancies.

Example: What if gold was cheaper in Canada than in US?  In U.S., P=$260 and in Canada, P = $255? [Pd ($) > e * Pf (C$)] Two effects:

1) People would _________ gold in Canada, __________ gold in U.S.  Price in Canada would __________ and price in U.S. would _____________.

2) People would first buy __________ to buy Canadian gold, and would also sell _________ to buy Canadian dollars.  Can $ would ________, US $ would ________,

ex-rate ($/C$) would ___________.

Law of One Price would be restored, through an adjustment in gold prices here and in Canada, and through an adjustment in the ex-rate.

Law of One Price holds most strongly for: homogeneous, traded goods like commodities such as: gold, silver, wheat, steel, copper, oil, aluminum, cotton, etc. and financial assets like Treasury securities, bank CDs, etc. In fact, most of the currency trading is for financial transactions, not commodities.

Also Law of One Price assumes frictionless trading.  If we introduce frictions like tariffs, taxes, transportation costs, commissions, shipping, insurance, etc., the Law of One Price may not always hold.  Also, many goods and services may be non-tradeable items like haircuts and golf lessons.  Law of One Price is a starting point for ex-rates, illustrates one aspect of how international trade affects ex-rates.

Time for me to get back to getting more friends of mine to by dinars before the RV.

[FishmanTx]

Dang "Fish...," Ya kinda smacked that nail right on the head. Plus one for keeping it real my friend... very sensical....

GO RV...

Thx Rdy!

We all need an RV. Hell, I still have an ex-wife to pay for! But after all the info coming out and seeing the "nature" of people in the CBI and GOI by how they act and what they say, and not just toward the IQD but all their fiscal matters; their debt and other fiscal obligations to the IMF, Paris Club, and Kuwait. They've attempted to renegotiate and "crawfish" on every promise and every deal to get out of paying. I just can't see an RV anymore where they will shell out billions on exchanged currency. Ask any Troop who's dealt in the Iraqi marketplace. Their nature is all about "What's in it for me?" Maximize profit and minimize output. And we're talking about Bankers here. The point is moot.

Fish

Edited February 25, 2012 by FishmanTx

[dvforumuser]

If anybody is actually listening to these lop gurus that is like listening to okie and the boys. The lop gurus / lopsters are here to promote propaganda which is anti RV.

This sit back and enjoy the RV ride.

dvforumuser What time dose your co-worker dinarck start today I can't wait for him to spend his weekend promoting a lop like you are doing. Do you guys get paided overtime?

"Propaganda is a form of communication that is aimed at influencing the attitude of a community toward some cause.

dvforumuser what is your cause?

I merely would like people to be rational and realistic. We pretty much all agree that the CBI says they will RD, its just that some like me think they should be taken at their word while most on this site think that is all aimed at confusion and that a whole string of amazing events will take place to allow an event never before seen in the history of civilization.

http://www.umflint.e...rry/Money7a.htm

LAW OF ONE PRICE (LOP): starting point for understanding ex-rates in the LR.  Also called the "price equalization principle": for homogeneous, identical goods, the price of the commodity should be the same (equalize) throughout the world, especially when barriers to trade, transactions costs and transportation costs are low.  Says that foreign prices (Pf ), domestic prices (Pd) and ex-rates (e) are linked through the Law of One Price which says: Pd ($) = e * Pf (£) , where e = $ / £.   LOP says that similar products should sell for the same price in both countries, after converting the foreign price into dollars.

Yes, and your point would be?

[Carrello]

I do, and so should everyone else. The CBI has straight out said, probably a half dozen times, that the "initial" hard RV rate will be 1:1.

all righty then....

[HolySpirit]

I don't think you can produce any CBI document that says there will be an RV. They have said the new (post RD) dinars will be 1000:1 with the current dinars and that puts them at .86 dollars per dinar which is close to 1:1 but not exactly. They could also RV by just enough to put the current IQD at .001 so that it would go exactly 1:1 for the new dinars, but its not clear that they will do so or not.

Oh, it was very clear what both, but mainly what Mr. Selah, on behalf of Mr. Shabibi said.

[FishmanTx]

If anybody is actually listening to these lop gurus that is like listening to okie and the boys. The lop gurus / lopsters are here to promote propaganda which is anti RV.

This sit back and enjoy the RV ride.

dvforumuser What time dose your co-worker dinarck start today I can't wait for him to spend his weekend promoting a lop like you are doing. Do you guys get paided overtime?

"Propaganda is a form of communication that is aimed at influencing the attitude of a community toward some cause.

dvforumuser what is your cause?

http://www.umflint.e...rry/Money7a.htm

LAW OF ONE PRICE (LOP): starting point for understanding ex-rates in the LR.  Also called the "price equalization principle": for homogeneous, identical goods, the price of the commodity should be the same (equalize) throughout the world, especially when barriers to trade, transactions costs and transportation costs are low.  Says that foreign prices (Pf ), domestic prices (Pd) and ex-rates (e) are linked through the Law of One Price which says: Pd ($) = e * Pf (£) , where e = $ / £.   LOP says that similar products should sell for the same price in both countries, after converting the foreign price into dollars.

Example: Price of gold in U.S. = $260 (Pd) , Price of gold in Canada = C$400 (Pf) and e = $0.65 / C$.

LOP holds: $260 = ($.65/C$)  x  C$400, says that gold sells for the same price ($260/ounce) in both the U.S. and Canada, after converting the foreign price into $.  The price of gold should equalize around the world and sell for about the same price everywhere: $260/ounce.  What if somewhere in the world, P < $260/oz, what would happen?  What if somewhere in the world, P > $260, what would happen?  ARBITRAGE: Riskless profits from exploiting price discrepancies.

Example: What if gold was cheaper in Canada than in US?  In U.S., P=$260 and in Canada, P = $255? [Pd ($) > e * Pf (C$)] Two effects:

1) People would _________ gold in Canada, __________ gold in U.S.  Price in Canada would __________ and price in U.S. would _____________.

2) People would first buy __________ to buy Canadian gold, and would also sell _________ to buy Canadian dollars.  Can $ would ________, US $ would ________,

ex-rate ($/C$) would ___________.

Law of One Price would be restored, through an adjustment in gold prices here and in Canada, and through an adjustment in the ex-rate.

Law of One Price holds most strongly for: homogeneous, traded goods like commodities such as: gold, silver, wheat, steel, copper, oil, aluminum, cotton, etc. and financial assets like Treasury securities, bank CDs, etc. In fact, most of the currency trading is for financial transactions, not commodities.

Also Law of One Price assumes frictionless trading.  If we introduce frictions like tariffs, taxes, transportation costs, commissions, shipping, insurance, etc., the Law of One Price may not always hold.  Also, many goods and services may be non-tradeable items like haircuts and golf lessons.  Law of One Price is a starting point for ex-rates, illustrates one aspect of how international trade affects ex-rates.

Time for me to get back to getting more friends of mine to by dinars before the RV.

Not relevant. We're talking about currency, not gold prices. The IQD rate is NOT floating, it is a fixed program rate that is not governed by market trading nor any "law" other than what the CBI, who has complete authority AND control over the currency, dictates.

No other factor is relevant.

Edited February 25, 2012 by FishmanTx

[ISAAC88]

The Kurdish Globe

Views differ on financial and socioeconomic impacts

Despite fears of a negative economic impact, the Central Bank of Iraq will remove three zeros from Iraqi dinar notes.

The Central Bank of Iraq has agreed with the Economic Committee of the Iraqi Parliament to introduce the new banknotes in September 2012, which will be used in parallel with the current banknotes for a year. The CBI will completely withdraw the old banknotes by September 2013.

Abdul-Hussein Abtan, Economic Committee Member of Parliament in Baghdad stated in a press conference that there is an initial agreement between Parliament and the central bank to start the process of removing three zeros in September, and it will take a year to complete. The new banknotes will be printed in Arabic, English and Kurdish.

The CBI will introduce three new banknotes: 50 dinars, 100 dinars and 200 dinars. For smaller transactions, the CBI will also issue 1-dinar and 2-dinar coins which Iraq currently does not use.

MP Abtan says "The grant agreement is to ensure that during the one year process, the old banknotes are traded in the market and replaced by the new one."

The CBI expects this move to positively impact the country's economy; however, some parties say the negative consequences will be more serious.

The Security Commission says deleting the zeros will have a negative impact on financial trade in the stock market. Other opponents of the move argue it would pave the way for money laundering and want the government to reconsider its decision.

Supporters of the idea believe the introduction of the new banknotes will help reduce inflation, strengthen the Iraqi dinar in the international market, facilitate trade with international banks and other financial institutions, as well as reduce the social gap between classes.

"The process of removing zeros from the currency will contribute to dealing better with inflation, facilitate economic cooperation with international banks and reduce the differences in [standards of] living in society," Abtan explained. Mahma Khalil, another Member of the Iraqi Parliament and official spokesperson of the Economic Committee says an agreement has been reached about the mechanisms of introducing the new banknotes after a series of meetings and discussions with the CBI Governor Dr. Sinan Al Shibibi.

"According to the agreements, the new bill will be printed by a European company and introduced to the market gradually and in a well-planned schedule to ensure it will not result in shocks and would not have a negative impact on the market," explained MP Khalil. He added the exchange rate between the new banknotes and the old ones would be 1:1,000.

The objective behind this move is to appreciate the value of the Iraqi dinar against the U.S. dollar, which would in turn increase the balance of the Iraqi dinar and there would be sufficient reserves of that currency," explained MP Khalil. "Additionally, the economy of Iraq would grow and oil sales would also increase." Khalil added that Iraq has a reserve of $60 billion in the CBI.

The CBI previously stated it would consult with Parliament and representatives to see whether there would be a need for a law to be passed for this shift. The Economic Committee announced on 19 February it was introducing new legislation for the purpose and would also address the inflation issue in the country.

The introduction of new banknotes and withdrawing the current ones from the market is generally expected to reduce and control the number of dinars in circulation and would also help facilitate payment systems and control the banking transactions in the country.

Can anyone verify this and please tell me that a old 25k note will not only be worth 25 new denom coins?

[alan_coaks_3]

Someone find me a country or currency that has dropped a certin amount of 000 that wasn't a RD if so post it here so we can all see it with link.

lately all i these articals that talk about dropped 000 just seems more like an RD to me

[Hamels]

seems to be there will be no a 5-10-20 dinar???......wouldn't they need them in the marketplace, along with the 1 and 2 coins???........if you buy something for 3 dinar and give a 50, they are going to give you 47 dinar in change in 1 and 2 dinar coins??.......thats alot of coin to be carrying around

Edited February 25, 2012 by Hamels

[Az Joe]

I smell smoke. This is a LOP I don't care how you twist it.So much for getting rich. F Iraq!

[Sowhat]

I don't see a link to verify but if true I hope the coins have 25 oz of gold in them, otherwise...

[Hamels]

from earlier articles, wasn't their new currency suppose to mirror the US, up to the $100 bill?????.....

[yota691]

this is already posted Saturday, 25 February 2012, 07:58 GMT

New banknotes to be introduced in September

Read more: http://dinarvets.com/forums/index.php?/topic/106999-new-banknotes-to-be-introduced-in-september/#ixzz1nQ5MNGvH

[Uncle Barkie]

This is more than a little confusing. The opening paragraph states that they will release the new lower denoms in September 2012 ,and they will be used in "parallel" with the current notes for 1 year. If they are, in fact, used in "parallel" then they are at 1:1( by my understanding of the word parallel) not 1:1000 as stated at the end of the article. Maybe I'm just missing something here I guess.

Uncle Barkie