Iraq to revalue dinar and introduce new notes in September 2012

[JayP]

Fact is..you dont RD gradually. Doesnt make sense.

This is actually not true, because many countries actually do gradually phase out the old notes, and introduce a new unit of currency, allowing the old and new notes to co-exist for a period of time, specifically for the reason that was mentioned in the article you quoted, marking prices for goods in both the old and new units of currency so the consumer will know what to pay based on what is being used at the time of purchase.

In fact countries, such as Romania, which Iraq has specifically pointed out as a country to look to as a successful example of what the CBI wants to do. I can give a long list of other nations as well, others which Iraq has used as examples also.

See the bottom of page 1 beginning with "Implementation of the new currency shall be made according to the following schedule:" and the top of page 2, and you will see where this is in fact how countries will implement this gradually over time:

https://www.isdadocs.org/speeches/memopdf/Redenomination-Memo-061405.pdf

There are occasions of a Rd where they will do it much faster though, such as with the case in 2003 when they wanted to get rid of the Saddam notes as soon as possible, and replace it with the current notes, but the exchange was 1:1 old for new (with the exception of the Swiss Dinar which was 150:1) but that situation was done for a a different reason than needing to reduce circulation.

[zul]

This is actually not true, because many countries actually do gradually phase out the old notes, and introduce a new unit of currency, allowing the old and new notes to co-exist for a period of time, specifically for the reason that was mentioned in the article you quoted, marking prices for goods in both the old and new units of currency so the consumer will know what to pay based on what is being used at the time of purchase.

In fact countries, such as Romania, which Iraq has specifically pointed out as a country to look to as a successful example of what the CBI wants to do. I can give a long list of other nations as well, others which Iraq has used as examples also.

See the bottom of page 1 beginning with "Implementation of the new currency shall be made according to the following schedule:" and the top of page 2, and you will see where this is in fact how countries will implement this gradually over time:

https://www.isdadocs.org/speeches/memopdf/Redenomination-Memo-061405.pdf

There are occasions of a Rd where they will do it much faster though, such as with the case in 2003 when they wanted to get rid of the Saddam notes as soon as possible, and replace it with the current notes, but the exchange was 1:1 old for new (with the exception of the Swiss Dinar which was 150:1) but that situation was done for a a different reason than needing to reduce circulation.

JayP

Agree...countries phase out old currencies gradually. We have seen many such cases. But introducing new bank notes gradually..? How is that..? How that will "ensure it will not result in shocks and would not have a negative impact on the market..... "

And how a neutral-value event, could result in shocks have a negative impact on the market..?

[JayP]

JayP

Agree...countries phase out old currencies gradually. We have seen many such cases. But introducing new bank notes gradually..? How is that..? How that will "ensure it will not result in shocks and would not have a negative impact on the market..... "

And how a neutral-value event, could result in shocks have a negative impact on the market..?

Oh, I see what you are saying.. yes, that is a good point. There are cases like this where they will gradually introduce the new notes though, such as Mexico for instance in 1993, when they initially released a set of new Peso in exchange for the old Peso, but then introduced additional new pesos by the time the 3 year exchange period was completed in 1996, where I believe they had 2 more denominations introduced in addition to the initial set released in 1993.

I hope this helps some.. Truth be told.. if it were me making the call, I would say it would not make sense or be worth the time making the change deleting zeros at all.. but then again, I am admittedly and obviously a bit biased in that opinion by my own personal agenda here :lol:

Edited February 28, 2012 by JayP

[zul]

Oh, I see what you are saying.. yes, that is a good point. There are cases like this where they will gradually introduce the new notes though, such as Mexico for instance in 1993, when they initially released a set of new Peso in exchange for the old Peso, but then introduced additional new pesos by the time the 3 year exchange period was completed in 1996, where I believe they had 2 more denominations introduced in addition to the initial set released in 1993.

I hope this helps some.. Truth be told.. if it were me making the call, I would say it would not make sense or be worth the time making the change deleting zeros at all.. but then again, I am admittedly and obviously a bit biased in that opinion by my own personal agenda here :lol:

we are still on diff side of the fence.......and we wait.

[randalln]

Saturday, 25 February 2012, 07:58 GMT

New banknotes to be introduced in September

A money trader in Erbil

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 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.

http://www.kurdishgl...6BBF1EDC3B7D027

that means no LOP

[dvforumuser]

that means no LOP

How so? Assuming you are referring to the other giant font you used (this doesn't help anything in my view) that was

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."

But that is exactly an RD, new notes replace old ones. It isn't a forced one time immediate exchange, but you get change in new dinars and salary in new dinars and bank withdrawals in new dinars to the old ones just fade away. But that gives everyone time to adjust and see that the old ones have the same value as 1000x fewer of the new ones, get used to the new pricing etc. Please explain how that means "no lop"? Edited February 28, 2012 by dvforumuser

[zul]

How so? Assuming you are referring to the other giant font you used (this doesn't help anything in my view) that was But that is exactly an RD, new notes replace old ones. It isn't a forced one time immediate exchange, but you get change in new dinars and salary in new dinars and bank withdrawals in new dinars to the old ones just fade away. But that gives everyone time to adjust and see that the old ones have the same value as 1000x fewer of the new ones, get used to the new pricing etc. Please explain how that means "no lop"?

doesn't say it is EXACTLY an RD.

Replacing old currencies with new, applies to RV as well....

[dvforumuser]

doesn't say it is EXACTLY an RD.

Replacing old currencies with new, applies to RV as well....

An RV does not have two currencies.

so look at the two lines that were quotes in red originally:

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.

and

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

Even if you try and apply just new notes (instead of a new currency with a new exchange rate, which Is what they are talking about I think), then a new 50 exchanges with the old 50 at 1:1000. 1000 IQD 50s to 1 new dinar 50. How is that not an RD?

[zul]

An RV does not have two currencies.

so look at the two lines that were quotes in red originally:

and

Even if you try and apply just new notes (instead of a new currency with a new exchange rate, which Is what they are talking about I think), then a new 50 exchanges with the old 50 at 1:1000. 1000 IQD 50s to 1 new dinar 50. How is that not an RD?

Old and New ARE NOT two diff currencies. They are the same currencies with diff denominations. And the larger denominations will eventually be phased out......for obvious reason.

The 1:1000 is the face value of the new notes.

If this is an RD....upon implemenation, all our IQD notes will RD instantly...hence the need for the new bill immediately.....not gradually "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

And again I'm asking, why would a neutral value event would send shocks and have negative impact on the market....after months and months of "educating" their people.

And tell me how do delete 3 zeros (LOP/RD) takes a year to complete.... . If you say removing old notes from circulation....that's is a RV process...

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.

[dvforumuser]

Old and New ARE NOT two diff currencies. They are the same currencies with diff denominations. And the larger denominations will eventually be phased out......for obvious reason.

They are clearly NOT different denominations as there is a 50 in both.

The 1:1000 is the face value of the new notes.

It specifically says the new and old notes EXCAHNGE at 1:1000.

If this is an RD....upon implementation, all our IQD notes will RD instantly...hence the need for the new bill immediately.....not gradually "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

I don't even know what "RD instantly" means. Our notes remain exactly as they are and are worth exactly what they are now. Current (old) IQD can be exchanged for new notes at 1000:1 and that exchange need not happen (can't happen) immediately but will take place over a year (or more since the new ones can still be turned in to the CBI for a longer term. Most articles have said ten years, one more recently said only two).

And again I'm asking, why would a neutral value event would send shocks and have negative impact on the market....after months and months of "educating" their people.

I don't know just what is the concern, but this is just someone's view, lets stick to the mechanics of it.

And tell me how do delete 3 zeros (LOP/RD) takes a year to complete.... . If you say removing old notes from circulation....that's is a RV process...

It takes a year as there is no hurry. Both old and new currencies exist side by side. Over a year the old ones fade away since only new ones are given out. Its an RV only if the exchange rate for the IQD goes way up, but we know the exchange rate for old to new dinars is 1000:1, so if the exchange rate for IQD (old) goes up 1000:1 in an RV to 1 USD, then a new dinar is 1000x that which would be 1000 USD, which is clearly silly. No way can there be an RV, if the new to old dinar exchange is 1:1000, there just isn't any "room" left. Edited February 28, 2012 by dvforumuser

[zul]

It takes a year as there is no hurry. Both old and new currencies exist side by side. Over a year the old ones fade away since only new ones are given out. Its an RV only if the exchange rate for the IQD goes way up, but we know the exchange rate for old to new dinars is 1000:1, so if the exchange rate for IQD (old) goes up 1000:1 in an RV to 1 USD, then a new dinar is 1000x that which would be 1000 USD, which is clearly silly. No way can there be an RV, if the new to old dinar exchange is 1:1000, there just isn't any room left.

1 dinar = 1000 USD?

Now i understand why you are saying a straight up RV is silly.

[DetroittoAZ]

1 dinar = 1000 USD?

Now i understand why you are saying a straight up RV is silly.

You on FIRE

[dvforumuser]

1 dinar = 1000 USD?

Now i understand why you are saying a straight up RV is silly.

I presume you think that is somehow an argument that it IS possible? If you think that, than spell it out. Old IQD 50 dinar notes and new 50 dinar notes having an exchange rate of 1000:1 means there can not be an RV past maybe 2:1 or 3:1. So if you are claiming a big RV is indicated by this article, then please explain how it can happen with a 1000:1 old to new exchange rate. Further an old 50 and a new 50 having different values clear means they are NOT the same currency.

[jasondb17]

If I have been reading correctly, any article that has came out about the conversion of 1000 old dinars to equal 1 dinar....has come from money traders or random sources. Shabibi has yet to state this or even imply this was happening. We know Shabibi has said, he would like the Dinar to equal the US dollar.

[JayP]

If I have been reading correctly, any article that has came out about the conversion of 1000 old dinars to equal 1 dinar....has come from money traders or random sources. Shabibi has yet to state this or even imply this was happening. We know Shabibi has said, he would like the Dinar to equal the US dollar.

This is not necessarily true, Saleh has stated this, as well as stated things such as explaining how 1000 dinars today would be 1 dinar after the deletion of the zeros. Here is an example of one of those quote where he states this:

And delete the zeros, said the central bank adviser: The category Iraqi monetary deleted, including three zeros, viz (1,000) "thousand dinars," becomes "one dinar" only

http://translate.google.com/translate?hl=en&prev=/search%3Fq%3Dnahrain%26hl%3Den%26client%3Dfirefox-a%26hs%3Dbh9%26rls%3Dorg.mozilla:en-US:official&rurl=translate.google.com&sl=ar&u=http://xendan.org/arabic/drejaA.aspx%3F%3Dhewal%26jmara%3D2897%26Jor%3D2

When a 1000 dinar becomes only 1 dinar, that works out specifically to 1000:1 old for new.

There are plenty of things to hope that that are reasonable, like hoping that the Gov't concerns of corruption, or counterfeiting in the process would make it not worth the efforts for this measure, or that the CBI numbers may really be off by 26 Trillion dinar, or other reasons to hope that they will not go this route, but I think that in my opinion, to be fair to ourselves and best be informed of the facts, I am not sure it does us any justice to say that when 1000 dinar becomes 1 new dinar, this is not 1000:1 old for new...

Edited February 28, 2012 by JayP

[keepmwlknfny]

Keep

So they are going to RD/LOP and exchange their old notes for new. IF that is the plan..why do this GRADUALLY.? Seriously...?

Fact is..you dont RD gradually. Doesnt make sense.

As for the exchange centers....i still find it weird, they are taking this part too lightly in educating their citizen, ~ they never mention anything about exchange centers... ( 80% of the population are not account holder...and probably have never step their foot in any banks. )

When they exchanged the old Saddam notes for the new IQD..they had 240 exchange centers. Not too sure if they have that many bank branches by now.....

Why do it gradually? So there isnt a mad rush to banks, so that you can give your citizens enough time to exchange bills of course without an uproar....Turkey gave its citizens a year to exchange....some countries have only given a couple months to exchange and others a year or so....

Its all up to the country itself to decide....

And according to the CPA, the exchanges were done at banks across the country plus a few post offices I believe....but there are plenty of banks around for them to go to

[USMCVET]

Is this and other articles suggesting, that perhaps the new denominations exchange rate, is or will be equal to the dollar? I think so. So if I believe that, if and when they remove or delete the zeros from the old currency exchange rate of 1000, we will have our 1 to 1 exchange rate. Have the new denominations already been valued to equal the dollar and this article is stating that the new vs old exchange rate (as of now) is 1 to 1000, making it very easy ( in the near future) to remove the zeros from the old exchange rate? It seems pretty simple, just kidding. I really appreciate and respect all of hard work and opinions of our Dinar Vet members- Thank You!

"I'm not a smart man, but I know what love is."

[2fast4u2c]

Got6....welcome to reality. I hope it RV's but not optimistic.

[GotSix]

I need to run outside real quick cause the moon MUST be blue!!! Hahahaha.....you, me, agreeing?? WTH is going on here?!?!?

That's what happens when I run low on "Red Bull & Vodkas" :lol:

Got6....welcome to reality. I hope it RV's but not optimistic.

"Welcome to reality" I've always been there...how about you

[zul]

I presume you think that is somehow an argument that it IS possible? If you think that, than spell it out. Old IQD 50 dinar notes and new 50 dinar notes having an exchange rate of 1000:1 means there can not be an RV past maybe 2:1 or 3:1. So if you are claiming a big RV is indicated by this article, then please explain how it can happen with a 1000:1 old to new exchange rate. Further an old 50 and a new 50 having different values clear means they are NOT the same currency.

First of all.....the new currency will have 3 languages (as per their constitution). Which also means, the new 50 dinar note (3 languages) will replace the old dinar note (2 languages).

I have read news stating that the new 50 dinar will have the value of USD 43........but i have not seen any news that says the old 50 dinar will carry a diff value...... What i have seen, people making a lot of assumptions.

[zul]

Why do it gradually? So there isnt a mad rush to banks, so that you can give your citizens enough time to exchange bills of course without an uproar....Turkey gave its citizens a year to exchange....some countries have only given a couple months to exchange and others a year or so....

Its all up to the country itself to decide....

And according to the CPA, the exchanges were done at banks across the country plus a few post offices I believe....but there are plenty of banks around for them to go to

Keep, I dont see the mad rush. The old and the new will co-exist for at least a year. So there is really no incentives for the people to rush to the bank to exchange (IF they were to RD/LOP).

I mean, why would they..?

So what does GRADUAL really means.? Do they gradually delete the zeros.....or do they gradually release the small denom.

Bear in mind, once implemented, all their 25k becomes 25 dinar, 10k becomes 10 dinar, 5k becomes 5 dinar, 1k becomes 1 dinar........same goes to their 500 dinar, 250 dinar and 50 dinar notes. That's the whole entire fleet.... Surely they cant be replacing these currency GRADUALLY.

[keepmwlknfny]

Keep, I dont see the mad rush. The old and the new will co-exist for at least a year. So there is really no incentives for the people to rush to the bank to exchange (IF they were to RD/LOP).

I mean, why would they..?

So what does GRADUAL really means.? Do they gradually delete the zeros.....or do they gradually release the small denom.

Bear in mind, once implemented, all their 25k becomes 25 dinar, 10k becomes 10 dinar, 5k becomes 5 dinar, 1k becomes 1 dinar........same goes to their 500 dinar, 250 dinar and 50 dinar notes. That's the whole entire fleet.... Surely they cant be replacing these currency GRADUALLY.

Your right, there is no mad rush if they are giving them at least a year.....you asked why would they replace it gradually if they were gonna lop....simply to give people more then enough time to exchange, and give the CBI plenty of time to get the trillions back that they printed....

But think about if they only gave them a couple weeks....what kind of havoc that could create....so you spread the time out to make the transition as smooth as possible....

As the bigger bills are being turned in, the smallers are coming out....both is done gradually at the same time....they arent just gonna be handing out lower denoms....your gonna have to trade big to get the smaller ones....so as the big bills are being returned, the smaller denoms are being handed out in exchange...

[Texas1]

I am curious how much dinar is being sold on a daily basis by the dealers. I live in the 4th largest city in Texas and know of about 400 million dinar being held by individuals and groups. Multiply that by other holders in my city and state, followed by 49 other states and the numbers start to become staggering......this would not include any politicians with internal knowledge or large hedgefunds.....

[cashman54]

thats interesting Texas1, is 400 million per individual or 400 collectively?

probably a lot more people are holding Iraq Dinar than those who held Kuwaiti Dinar. Oh well as long as that does not effect us losing value in cashing out, I hope we all get rich!

[DetroittoAZ]

Keep, I dont see the mad rush. The old and the new will co-exist for at least a year. So there is really no incentives for the people to rush to the bank to exchange (IF they were to RD/LOP).

I mean, why would they..?

So what does GRADUAL really means.? Do they gradually delete the zeros.....or do they gradually release the small denom.

Bear in mind, once implemented, all their 25k becomes 25 dinar, 10k becomes 10 dinar, 5k becomes 5 dinar, 1k becomes 1 dinar........same goes to their 500 dinar, 250 dinar and 50 dinar notes. That's the whole entire fleet.... Surely they cant be replacing these currency GRADUALLY.