gregp Posted December 28, 2014 Report Share Posted December 28, 2014 Merrill Lynch indicated that a revaluation of the Iraqi dinar is unlikely to take place until after the country substantially increase oil production over the coming 5 to 7 years, adding that the planned redenomination of the currency is not a prelude to the dinar's revaluation. It said the Central Bank of Iraq's plan to drop three zeros from the dinar reflects successful macroeconomic stabilization and will not alter the value of the currency or of that of Iraqi assets, but aims to make daily accounting and cash transactions easier. It noted that the redenimination will increase confidence in the local currency, will send a strong signal that the economy has normalized, and could effectively decrease the dollarization rate in the economy. Merrill Lynch said that Iraq has managed over the past few years to improve its macro fundamentals in line with the requirements for successful currency redenomination, as authorities reduced inflation to low single digits, rendered fiscal policy more credible, and secured Paris Club Debt relief, which reduced external debt from 348% of GDP in 2005 to about 50% of GDP currently. It added that oil revenues have allowed Iraq to build up foreign currency savings, as the country's foreign reserve stood at $55bn at end June 2011 and represented 150% of total external debt. Merrill Lynch considered that a large currency revaluation would cripple fiscal revenues, unless oil production increases massively. It said the large dependence on oil for government revenues, the elevated fiscal breakeven price of $100 per oil barrel, and the need for large domestic spending on reconstruction and infrastructure make revaluation an unlikely scenario in the short term. It ruled out substantial appreciation pressures on the currency over the near term; and added that the dinar may appreciate 3% to 5% at best annually from 2012 onwards if reserves continue to rise and inflationary pressure emerge. 3 2 Link to comment Share on other sites More sharing options...
captl1 Posted December 28, 2014 Report Share Posted December 28, 2014 Old news. 5 1 Link to comment Share on other sites More sharing options...
gregp Posted December 28, 2014 Author Report Share Posted December 28, 2014 I thought so. Thanks Captl1. It clearly says 2012. America Contractor is a little behind. 2 Link to comment Share on other sites More sharing options...
captl1 Posted December 28, 2014 Report Share Posted December 28, 2014 He's on Iraqi time. 1 Link to comment Share on other sites More sharing options...
Texstorm Posted December 28, 2014 Report Share Posted December 28, 2014 Well I'm bullish on the IQD ! 2 Link to comment Share on other sites More sharing options...
new york kevin Posted December 28, 2014 Report Share Posted December 28, 2014 Phew. Thanks Cap. I was a little concerned there for a bit. But looking at this article it makes a difference between a revaluation and a redenomination in paragraph 1. Merrill Lynch indicated that a revaluation of the Iraqidinar is unlikely to take place until after the countrysubstantially increase oil production over the coming 5 to7 years, adding that the planned redenomination of thecurrency is not a prelude to the dinar's revaluation. Itsaid the Central Bank of Iraq's plan to drop three zerosfrom the dinar reflects successful macroeconomicstabilization and will not alter the value of the currencyor of that of Iraqi assets, but aims to make dailyaccounting and cash transactions easier. It noted that theredenimination will increase confidence in the localcurrency, will send a strong signal that the economy hasnormalized, and could effectively decrease thedollarization rate in the economy. If I am reading this correctly, the IQD may redenominate first which is not a prelude to the country's revaluation of the IQD, with their defining a revaluation as a 3 zero lop. Also that the revaluation of the IQD will not alter the value of said redenominated IQD or Iraq's assets at the time of the "revaluation" . Now, if this is correct, and what I have learned about a redenomination is correct then, they will/could peg the IQD redenom at $3. plus and go up from there? Eh, I could live with that and I pray they redenominate in Jan 2015 right after they pass the approved 2015 budget. 4 Link to comment Share on other sites More sharing options...
DinarThug Posted December 28, 2014 Report Share Posted December 28, 2014 (edited) That Clueless Wannabe Guru American-Contractor Wouldn't Know The Difference Between Merrill Lynch And Meryl Streep ! Edited December 28, 2014 by DinarThug 5 Link to comment Share on other sites More sharing options...
v-star 650 Posted December 28, 2014 Report Share Posted December 28, 2014 it some point , the dinar , will do something ---- either , go too above 1 penny , go too 1 to 1 or in the range of 1.13 or which it is suppose too be , OR, it will just creep up , at a value that will eventually just make our money back , with a small loss ! but the friends we have made during this ride --------- P R I C E L E S S wow meryl streep has great boob friction ----- how does she stay in place 1 Link to comment Share on other sites More sharing options...
robo5288 Posted December 28, 2014 Report Share Posted December 28, 2014 Why was this posted now? Just asking? Link to comment Share on other sites More sharing options...
TexasGranny Posted December 28, 2014 Report Share Posted December 28, 2014 Since this is really old news, I am closing this topic. 3 Link to comment Share on other sites More sharing options...
Recommended Posts