The Kuwaiti Dinar DID NOT REVALUE!!!

[Darin]

i remember everyone dumping them . i dont know who besides the saudi .. eygpt   banks .. the trading was shut down after a couple days  because the rates fell to about 70 cents .....then i heard they were selling on streets of iraq for under 10 cents ... who was there to buy them .. who knows ..  george soros ..lol

 

 i heard a  few people say they  were  one that bought some .. how much who knows ..  a million would still be 100 grand . who would be walking around  a war zone with a hundred grand .. buying dinars for 10 cents each / 

 

 i remember it all from the news in those days ... but  i do remember them shutting it down completely too the kuwaiti govt  shut down trade ..  

then they reinstated the rates after iraq was removed  .. and they printed up new dinars ,, and exchanged them

If I recall as well DontLOP, the only people who were eligible to trade for the new printed currency was Kuwaitis

So, for a foreigner to have made profits, he would of had to go through a Kuwaiti citizen.

 

I would argue that there was a changing in the balance from who was rich to who was poor. When the volatile market shifts and starts selling for pennies on the dollar for the dinars, the rich may have dumped their wealth while the poor (who may have been smart to do so) would have purchase and potentially hoarded by with any luck was able to have some nice new found wealth when exchanging for the new currency after the banks re-opened.

 

What may differ this situation to any other recognition of reinstatement of value is that the Central bank never really lost much money because it didn't have to honor any new liabilities (counterfeits printed by plates that were stolen)

If anything, they may have reduced their liabilities as legal tender that was once printed from those plates is now useless. But, that may balance out with what was stolen from any bank vaults from other legal tender cash. But, only if it given to any Iraqi with a good relationship with a Kuwaiti who was willing to do the trade for them.

Same. I've never seen anyone actually talk about this in detail - but I've always been curious not only as to how they did it, but why they thought they'd be able to at the time they bought the currency for such a discounted rate to begin with.

I'm only going off of a theory here.. The market rate which was why the KWD was so cheap was likely due to the invasion as the citizens may have felt their government was on a verge of a take-over which ultimately would mean their currency was worthless

.

Whether it be due to their understanding many of the currency from banks were hoarded stolen. Or that the printing plates were stolen, etc. They than likely thought a bunch of fake dinars would eventually emerge or that the acceptance of KWD would have plummeted to either near zero or only pennies on the dollar...

[dontlop]

the kwd  was like a hot potato .. no one wanted it .. In the first days of the invasion, the Kuwaiti dinar fell from $3.45 to about one-fifth its value before international currency exchanges suspended trading of the Kuwaiti currency
  everyone was selling if they could find a buyer ..  .. .... this was on every news channel every day  while this was going on .... it was world wide knowlege ... no one wanted to buy those kwd ... some people got stuck with them .. and were happy  when it was reinstated .thanks to 500 thousand  troops storming kuwait . and kicking asftskee and  not taking names .. look up highway of death ..  .. saddams republican guards were scared to come out of their hole in the desert .. when they sent in  ground forces .. the iraqis elite republican guard and iraqi troops  were running to the  reporters   troops anyone they could find to surrender ... they bombed the living crap out of them .. i was working 12 hour shifts at the time on a conveyer .. making bombs  .. just outside tampa florida ..  and north of st pete ... i watched the news all day every day at work ..we were  pumped ..we went to a bar every day after  and watched news on tv ..  drank our selves to sleep and did it again the next day .till it was over .

 their was  not alot of  computer activity  like their is today ,, people sitting around  loading the internet with  news artcles .. it was alot less than it is today ..

 

thats why its hard to find info on it ... today with google .everything is logged ... this post right here is logged on the internet .. //

[dontlop]

Bjt TERRIL JONES , Associated Press

Sep. 24, 1990 4:42 PM ET

NICOSIA, CYPRUS NICOSIA, Cyprus (AP) _ Iraq, underscoring its control over Kuwait, has declared Kuwait's currency invalid and set a deadline for all who hold it to exchange it for Iraqi money, the government said Monday.

 

Iraq will reimburse those who possess Kuwaiti dinars with Iraqi dinars on a 1-for-1 basis, the government said. Those who hold Kuwaiti dinars have until Oct. 6 to exchange it for Iraqi currency, said the announcement, carried by state Iraqi News Agency.

 

After that date, Kuwaiti dinars will be considered worthless, the Baghdad government said.

 

Iraq has methodically dismantled Kuwaiti institutions following its Aug. 2 invasion and annexation of Kuwait. Iraqi authorities have officially disbanded Kuwait's government, military and national airline, and call Kuwait Iraq's 19th province.

 

The currency measure was taken ''to facilitate transactions throughout Iraq and ending duality in the monetary dealing,'' the government said.

 

Before Iraqi President Saddam Hussein ordered his army into Kuwait, one Iraqi dinar was worth $3.22 and one Kuwaiti dinar traded at $3.45 at official rates.

 

But the Kuwaiti currency was convertible on international markets while the Iraq dinar was not. The Iraqi currency remains inconvertible.

 

The decision was also expected to eliminate the black market for the Kuwaiti dinar. Although the Iraqi dinar's official value remains the same, its value to buy goods or foreign currency on the black market was about one-tenth the official rate. Iraq punishes currency smugglers with death.

 

In the first days of the invasion, the Kuwaiti dinar fell from $3.45 to about one-fifth its value before international currency exchanges suspended trading of the Kuwaiti currency.

 

''No banks will accept to quote or trade either Iraqi or Kuwaiti dinars,'' a Banque Francaise du Commerce Exterieur official said Monday. That would be forbidden under the freeze on Kuwaiti and Iraqi assets adopted by France and the other European Community countries, the Paris-based official said in an interview.

 

He said even if there were no economic embargo, no one would trade the Kuwaiti dinar because there is no longer any central bank to guarantee its value. Anyone with Kuwaiti dinars outside the country would effectively be holding useless paper, the banker said.

 

There are exceptions in extremely limited circumstances. Kuwaitis stranded in London can go to the National Bank of Kuwait or United Bank of Kuwait and get British pounds for their dinars if they have dinar accounts there and can prove that they are in desperate need of funds, according to a financial source in Bahrain.

 

The Banque Misr, or Bank of Egypt, in Cairo has not been instructed to stop accepting the Kuwaiti dinar, an official of the bank's foreign exchange department said. The currency was quoted in Monday's fixtures as usual, though at $2.86.

 

When the crisis erupted, the Egyptian-Saudi Finance Bank allowed Kuwaitis to exchange 500 dinars at the old rate for two days. Any other funds had to be exchanged at the reduced rate.

 

The practice appeared part of the exile aid program run by the Kuwaiti government, itself in exile in Saudi Arabia, the financial source in Bahrain said.

 

Certain local banks may have been given a guarantee by Kuwaiti embassies allowing them to exchange dinars to needy Kuwaiti citizens, the source said.

 

But it would be impossible for the Kuwaiti government-in-exile to honor all dinars, because Iraq could then try to convert the huge stocks of Kuwaiti cash its soldiers plundered during the invasion, the source noted.

 

The fall of Kuwait made instant paupers out of tens of thousands of people with assets in Kuwait or Kuwaiti currency.

 

H. Zahreddin, a wealthy Lebanese businessman doing business in Kuwait, flew home to Lebanon the day before Iraq overran Kuwait to throw a lavish wedding party for his daughter at a plush Beirut hotel.

 

''I went to bed a millionaire and woke up in debt,'' Zahreddin said later. ''The hotel refused to accept my Kuwaiti dinar check to settle the bill.

 

 

http://www.apnewsarchive.com/1990/Kuwait-s-Currency-Declared-Invalid-by-Iraq-With-AM-Gulf-Rdp-Bjt/id-978b923d961916791ee3c34fce20be34

 

 

i guess as long as the ";official rate"  doesnt change it didnt rv . except for the iraqi swiss dinar .. that doesnt .. it doesnt need an official exchange rate

looks like it fell to around 70 cents during the first days on the international exchange ... about one fifth  of its 3.45 original value ..

 according to the associated press

Edited April 15, 2013 by dontlop