Old article from radio free Europe

[cooked]

While I know this is two years old, I just stumbled across this. Anyone heard of Radio free Europe? What are your thoughts on this?

BAGHDAD -- A senior Iraqi Central Bank adviser says the government has adopted a two-pronged plan to restructure the national currency in order to facilitate large transactions and make government accounts more efficient, RFE/RL's Radio Free Iraq reports.

Mudhhir Muhammad Salih, a member of the bank's advisory panel, told RFE/RL on June 23 that in the short term, larger banknote denominations of the dinar would be issued to simplify major transactions.

He said that because so many Iraqis still dealt mainly in cash, it was cumbersome to carry bags full of money to pay for expensive items like cars. The inconvenience leads people making such purchases -- as well as many entrepreneurs -- to use dollars for those kinds of transactions instead of dinars, something the government wants to end.

He added that large denominations equivalent to around $100 would be issued to simplify major purchases, and new coins and lower denominations would be introduced for smaller transactions.

In the longer term, Saleh said a redenomination was needed wherein three zeros will be dropped so that the 25,000-dinar banknote -- currently the largest denomination -- becomes a 25-dinar note.

He said the change was inevitable, considering the economy is expecting high growth in the coming years with a planned increase in oil production to finance reconstruction projects.

Saleh said there were currently some 29 trillion dinars in circulation in Iraq, represented by some 6 trillion banknotes of various denominations, most of them quite small. He said this also caused complications for the Central Bank and government, as well as commercial accounting departments.

Saleh said the monetary-restructuring plan was drawn up with the help of foreign experts and financial institutions, including the International Monetary Fund, of which Iraq has been a member since 1945.

The plan will soon be presented to the cabinet, which is expected to subsequently send a bill to parliament.

Saleh noted that until 1980 the Iraqi dinar exchange rate was 1 dinar/$3.3 compared to $1/1,168 dinars now due to hyperinflation that occurred during the latter part of the late ousted leader Saddam Hussein's reign.

[Spy777]

Yeah, this is what I've felt was going to happen.  U know what they say, if it sounds to good to be true it probably is!

[staunch]

The fact that this is two years old and they still haven't done anything yet is what depresses me!

[zigmeister]

Depressed you should not be, you should be grateful they did not re denominate  the dinar.

[sambob]

Depressed you should not be, you should be grateful they did not re denominate  the dinar.

 

I agree.  And I think the longer they delay, the higher the chances that the dinar will see a significant value change...imo.  

[cooked]

Still hard to understand how they could do this. while a lop and rd would probably help them, they would pi$$ off a lot of other countries they owe money to. If they turn 30 trillion to 30 billion and then rv to 3.00 they still only have about 90 billion or so plus the 80 billion in reserves. they supposedly have a budget of 134 billion next year alone. where is all this money coming/going? They are worth far more than that when you factor in all the resources they have.