A Partial Iraqi Dinar Redenomination History

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Below is a linked list of articles posted at www.iraq-businessnews.com:

• 17 May 2010 ~ Removing Three Zeros from Iraqi Dinar will Help the Economy

• 30 June 2010 ~ Knocking Zeros Off Currency a Long Process

• 15 July 2010 ~ Government Criticized on Value of the Iraqi Dinar

• 24 August 2010 ~ Zeros Will Not be Removed from Iraqi Currency

• 14 September 2010 ~ Central Bank Wants to Drop Zeros from Iraqi Dinar?

• 25 September 2010 ~ Redenomination an unlikely priority for the CBI

• 17 October 2010 ~ Alsumaria TV to Re-Run Dinar Re-Denomination Prog

• 20 October 2010 ~ Removing Zeros From Iraq’s Currency Requires ‘Consultation’

• 21 October 2010 ~ The Future for the Iraqi Dinar

• 26 October 2010 ~ Japanese Iraqi Dinar Scam

• 7 December 2010 ~ History’s lesson for the dinar

• 9 March 2011 ~ Iraq May Legislate on Currency Exchange

• 29 march 2011 ~ Iraqi Dinar Revaluation Enthusiasts are Unaware of Bernie Madoff’s Fame

• 30 March 2011 ~ IMF Suggests Stable Iraqi Dinar

• 14 April 2011 ~ Iraq Central Bank ‘To remove 3 Zeroes from Dinar”

• 27 June 2011 ~ Iraq Prepares to Redenominate its Currency

• 29 June 2011 ~ Reports of New Fake Dinars in Circulation

• 18 July 2011 ~ Iraq’s Central Bank Considers New Currency

• 17 August 2011 ~ Wisconsin Warns About Iraqi Dinar

• 31 August 2011 ~ New Iraqi Dinar to be Harder to Counterfeit

• 4 September 2011 ~ New Iraqi Dinar – “Corruption and Money Laundering”

• 6 September 2011 ~ Iraq: $58bn in Currency Reserves, Should Redenominate Soon

• 10 September 2011 ~ Video on Rumoured Revaluation of Iraqi Dinar

• 7 October 2011 ~ Colorado Pulls Plug on Dinar Promoter

• 1 November 2011 ~ Your Guide to the Iraqi Dinar

• 28 November 2011 ~ Iraqi Central Bank to Issue New Notes

• 4 December 2011 ~ Impact Iraq: Can the Country Save Itself from Global Economic Crises?

• 14 December 2011 ~ CBI Discusses Dropping Three Zeroes from Currency

• 19 December 2011 ~ Fake Dinar Gang Busted

• 3 January 2012 ~ Central Bank Defends Weak Iraqi Dinar

• 12 January 2011 ~ Iraqi Dinar Under Attack

• 24 January 2011 ~ Iraqi Dinar Increases in Value

• 21 February 2011 ~ Removing Zeros from Iraqi Dinar to Start in Sept

• 22 February 2011 ~ Al-Qaeda Believed to be Behind Iraqi Dinar Racket

• 27 March 2012 ~ More Details of New Iraqi Dinars

• 1 April 2012 ~ APRIL FOOL: Worldwide Celebrations as Iraqi Dinar Revalues 1:1000!

• 4 April 2012 ~ Central Bank Tightens Rules on Buying Dollars

• 11 April 2012 ~ Iraq Has Cash Reserves to Fight Dinar Depreciation

• 13 April 2012 ~ Iraq Halts Plans to Drop 3 Zeros from Dinar

These articles are posted under the Banking and Finance Section and reach back over the last two years. The articles were selected to focus on the Iraqi currency and the redenomination process in order to provide the biggest picture possible about the reality of investing in the Iraqi Dinar by actually buying and holding the cash.

Buying IQD on the internet and/or holding IQD in cash form, seems useless for a foreign investor especially since the CBI is about to recall all the existing banknotes and exchange them for the new banknotes (and the new banknotes probably won’t be available for trade-in or purchase via the internet once they are introduced into circulation).

It will be the new low denomination banknotes that will be subject to revaluation, and eventual recognition by the international community, not the existing high denomination banknotes that everyone is holding now (including all the Iraqi citizens).

When the then local IQD banknotes (with Saddam’s picture on them) were phased out and exchanged for the currently used banknotes and/or USD, it took about 90 days until the Saddam banknotes were declared void.

That was because of the war and the Coalition Provisional Authority (the US and the British) introducing both the USD and the currently used IQD banknotes (made in England) into the Iraqi economy. Everybody was in a hurry so that the economy didn’t collapse completely.

This next time around the CBI is going to allow both kinds of banknotes (the newer lower denomination bills and the existing larger denomination bills) to co-exist for a (reportedly) 1 - 2 year period until the CBI is satisfied that the redenomination has been successful.

Redenomination success would mean that the majority of the existing large denomination IQD banknotes are exchanged out of circulation and the Iraqi citizens become confident enough in the value of their own new low denomination currency that the use of USD banknotes is phased out as well.

The Saddam banknotes could not be spent outside of the borders of Iraq.

Instead, there was an international version of the IQD that was made in Switzerland and recognized and exchanged for other currencies by the international community.

Similarly, the existing IQD banknotes cannot be spent outside of the borders of Iraq.

Instead of an international version of the IQD made in Switzerland, the Iraqis currently use the USD, made in the US, and recognized and exchanged for other currencies by most of the international community.

In order for the new low denomination IQD banknotes to replace the USD as the default Iraqi international currency, the new low denomination IQD banknotes will have to recognized and be exchangeable by the international community so that they can be used for the purchase and importation of goods and services outside of Iraq.

UN Sanctions under Chapter 7 will probably have to be resolved and the Iraqi HCL will have to be in place (and effective) before the international community will unilaterally recognize the new lower denomination Iraqi banknotes (yet to be issued) as the legitimate international (and exchangeable) currency of Iraq.

That being the case, when the redenomination process starts, all three types of currency (the existing high denomination IQD, the new low denomination IQD and the USD) will at first all be recognized, exchanged and used inside the borders of Iraq and only the USD will (still) be spendable outside of Iraq. The existing large denomination banknotes will be exchanged at the current CBI rate of $1:1166 (or whatever the exchange rate is by the time redenomination starts) and the new lower denomination banknotes will be exchanged at the new rate of $1:1.166.

That way an existing IQD10000 banknote and a new IQD10 banknote will both be able to be exchanged for US$8.57 and the economy will absorb the two different rates and the 3 different currencies (including the USD) smoothly and without a lot of strife.

Iraqi merchants will just have to decide whether to advertise their goods and services at the existing currency rate or the new currency rate. Either way, IQD10000 or IQD10 or US$8.57 will all spend equally.

When the rest of the international community finally recognizes and accepts the new lower denomination IQD banknotes as legitimate payment for goods and services outside of Iraq, then they will be exchangeable for the USD and all the rest of the accepted international currencies outside of Iraq. At that time, the CBI and the GOI will undoubtedly institute laws and policies that will severely limit the use of the USD inside Iraq in order to cut down on black market activities and also to help install confidence in the new currency on the part of the Iraqi citizens.

When all of this redenomination has successfully taken place, the Iraqi currency as a whole (including the new lower denomination IQD banknotes, electronic Warka accounts and stock prices on the ISX) will (finally) be in a position to incorporate a significant revaluation to match the growing Iraqi economy.

A redenomination followed by a revaluation could take the exchange rate from $1:1.166 to $1:1 or even more; but while the rest of the world wouldn’t mind a revaluation to $2:1 or even $3:1, the CBI and the GOI are going to want to keep that exchange rate as low as possible in order to be competitive exporting Iraqi oil, natural gas, gold, silver, dates, copra, etc……

The GOI will also want to encourage tourism and outside investment into its infrastructure, so it will serve the Iraqi economy best to be the new international “bargain” by keeping the exchange rate of its currency as low as possible.

Read the articles listed above to see the reasoning behind the statements above.

[Dinar Buddy]

Link: http://www.iraq-businessnews.com/

Be careful of the Iraq-businessnews as it is developed and managed by a company in the US... This is created or copied news about Iraq... It is not 100% accurate.

Do our homework is getting harder as the dinar pumper are morphing into consultants, multiple Guru avatars, pretend banks and currency auctions/traders.

Edited April 17, 2012 by Dinar Buddy

[FreckledFuzz]

Sorry but when the site you pulled all these referenced articles from pulled that April Fool's stunt- all credibility of the material - IMO- went straight down the drain.

All of these articles are all just opinion pieces anyway...based upon available facts and historical references.

Anything to do with money - the past can never be indicative of the future

Thanks for the post though