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MRI Bankers Guide, with link article to the Kurdish Globe 3-5-12


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Morning....not sure if this was posted and don't have the time to see if it has been.

This is from the MRI Banker's Guide website, dates March 5, with link to the full article from the Kurdish Globe

http://www.mriguide.com/updates2011.htm

Iraq: An article in "Kurdish Globe" informs that the Central Bank of Iraq plans to issue revalued notes of 50; 100 and 200 "new" dinars; which will be equal to 50,000; 100,000 and 200,000 of the old dinars. If true, this seems to indicate that the current 5,000; 10,000 and 25,000 dinars will continue to be used. As for the small denominations, the plans call for 1 and 2 "new" dinar coins, to gradually replace the current 1000 dinars notes. (Courtesy Kurdish Globe) ...................................05MAR12

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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.

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So relative to the 1:1,000 comment, I read that as saying/indicating, for example, a 10,000 note will be exchanged for (100) 100 dinar notes. So to help with the understanding relative to purchasing products, a lamp that used to cost 23,999 dinar will now cost 23.99 dinar. How much more simple can you get.

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