What does it mean reducing the value of the Iraqi dinar to you?

[yota691]

What does it mean reducing the value of the Iraqi dinar to you?

 

03-01-2016 | (Voice of Iraq) - Add Comment - By: Mohammad Reza Abbas - 02-01-2016 | (Voice of Iraq) | 

announcement of the decision to reduce the value of the local currency compared to foreign currencies in industrialized countries when it comes planned economic feels the need to boost economic development, or when they feel that the economy is weak and needs a booster injection. Reducing the value of local currency encourages exports and reduce the volume of imports and thus raise the economic growth (an increase in national production) and may increase inflation (price increase rate) in the country if they are too large exports. 

Inflation source may result from three sources: 

• increase in the price imported goods, especially in the prices of raw materials (inflation due to increased production costs). 

• increase the overall demand for goods and services due to the recovery of the export sector (inflation due to increased purchases of individuals). 

• Because of the low export prices, the employer becomes not care very much about the cost of production to become more productivity, and so on, and over time it may rise Osar its products. 

It remains to be high in an uncertain export volume even with the reduction in value of local currency the following for the reasons: 

• elasticity of demand for exports and imports, if export demand does not change, the decline in their prices in foreign markets will not lead to an increase in the production of exported goods and will not greatly affect the balance of payments. On the whole if the elasticity of demand for imports and exports of more than 1, the reduction in value of local currency improves the balance of payments. 

• state of the global economy, if the global economy is suffering from the recession, lower in local currency may not result in the desired purpose, but in the economic boom phase may lead to a rise in exports and could lead to increased inflation in the country. 

Inflation size as a result of reducing the value of local currency will depend on: 

• the production capacity size in the country. If the country uses half of its production capacity due to the economic recession, the increase in exports will not greatly affect the inflation rate. 

• the success or failure of the owners of production in the consumer cost of production load. For example, the product's decision to reduce its share of the profits will not lead to higher commodity prices, but the insistence of producers to raise their profits will leads to an increase in the inflation rate in the country. 

• If the trade unions decided not to demand higher wages, because the raw materials are not the only material used in production, but includes work as well, and in some cases the contribution of work in the creation of production outweigh the share of raw materials and so the demand of the workers lift their wages will lead to a rise in prices and the rate of inflation while Scott this layer may leads to stability in the rate of inflation. 

What is the effect of the decision the central bank to reduce the value of the Iraqi dinar against the US dollar? Before answering to this question, we should know the status of the Iraqi economy. Iraqi economy prevented entering 2016 suffers from a severe Akhvad in oil revenues, obligations to pay salaries and wages and social aid and pension and aid for the displaced, including no less than eight million citizens, and the agricultural sector and industry do not represent more than 15% of national production. In other words, Iraq needs funds to cover the operating budget and needs money to buy what it needs from the goods and services do not exist in the country, dependence on imports. 

Devaluation of the Iraqi dinar, the source will not benefit because there is no export to Iraq, a private industry. The measure could lead to a reduction in the value of imports because it would be higher prices within the country, which may cause an improvement in the balance of payments and an improvement in the gross domestic production figures. But all this depends on the elasticity of demand for imports, if the import is inelastic, the devaluation of the dinar will not lead to the desired goals and could lead to a general increase in prices, because most of the goods in the Iraqi market foreign-made. 

I do not think that the reduction in the value of the Iraqi dinar will achieve What aspiring him a member of the parliamentary finance committee Majida al-Tamimi, which came in her statement that the action of the Central Bank "is one of the alternatives for external borrowing, and produces state insurance employees' salaries and control the size of the spending, and thus reduce the fiscal deficit" because the reduction of teams is not enough obligations of the State towards employees, it will not be a substitute for external borrowing. The state can not finance them dues without external borrowing and that as long as oil prices in global markets have not improved. Ms. Tamimi political statement more than economical. It was Prime Minister for Economic Affairs, Mr. adviser permit the appearance of Mohammed Saleh more realistic to justify the decision to reduce the dinar when he said that "the decision to reduce the value of the dinar is part of the protectionist policies taken at the financial level, but must be accompanied by measures relating to the availability of active industry with the rise in the pace of production ornaments, a substitute for the importer and meets the need of the domestic market ". 

Conclusion: 

• The first beneficiary of the decision is the Iraqi source. 

• beneficiary will also be Iraqi product with all sorts of goods and services 

• As long as that national production in the first phase, the impact of the decision will not lead to the desired economic development . 

• the decision will encourage travel to Iraq and discourage travel abroad. 

• likely increase in the inflation rate in the country is striking. 

• the decision could lead to a cessation of foreign currency smuggling. 

• the decision could lead to a halt smuggling gold out of the country. 

• decision will increase the Financial government burdens when deserve Foreign upon debt, because the debt is not in the local currency, but Alajunbh currency. 

• may improve the balance of payments if the import of goods and services size fell. 

• the decision will not negate the need for Iraq to additional loans to pay its financial obligations. 

• the decision will hurt the chip retired and living outside Iraq 

• the decision will hurt the planned sale of his estates and leave outside the country. 

• the decision will hurt the profits of the foreign investor in Iraq. 

• the decision could lead to a decline in living standards for the Iraqi people (because of inflation).

 

[jeepguy]

??????????        I am still in  --- economic evaluation ---    on  this type of  , lower values  and  inflation against ,   market rise in tradable goods !    the only  thing I see from  any value of a currency going down that is ,  tourism  is  up  and  dollars are spent  on  things  aligned with that  industry .   it  would  I suppose be true  of   say ,   goods  that  are  , eatables , and perishables ,  as in sugar , dates ,   and what ever else  they can grow and  get to market in the  world .  BUT   with  the idea  , that  a lower value  will do good , it also  has  a  drop in  the local markets ,  those same  goods  I just mentioned ,   that go out side of  Iraq boarders ,   but  go too market in the  local region or Iraq ,  these  items   are the same price  as before  but  now  the dinar  can  buy  a whole  lot  less ,   that  stupid  coke  they keep referring  too     the cola  was ,  let  say     was  100  dinars  for 12  ounce  or  10 liters ,  is still  100 dinars  but  is now  8  ounces  and or   6 liters ...  {  the  goofy term  inflation ,   I   inflate   my tires   because they are  going flat ,   but to me  inflation   in currency  ,  seems  like  a stall in  markets ,  and  the  unemployment  numbers  ,  cause  inflation       would  kind of  think  it would cause oppression ,  the  average Iraq  who  has no work  really  now  has no work  and  dam sure  no money !   }    where is  them   oil  dinars  at  I wonder

[Laid Back]

- the decision will hurt the chip retired and living outside Iraq

• the decision will hurt the planned sale of his estates and leave outside the country.

• the decision will hurt the profits of the foreign investor in Iraq.

• the decision could lead to a decline in living standards for the Iraqi people (because of inflation).

They promised more purchasing power to the people, reducing the value of the Iraqi dinar is doing the opposite.

I remember the IMF statement. " Iraq will be part of the world economy in the first half of 2016 "

We patiently wait.!

[SnowGlobe7]

Thanks guys...quite interesting huh?

[davis411]

you lost me at hello

[SnowGlobe7]

[SocalDinar]

Nice! Thanks SG7

[SnowGlobe7]

Nice! Thanks SG7

 

Happy New Year My Friend!!!

[SocalDinar]

You are one classy cat!  Happy new years back to you. Lets make 2016 the best ever!

[djgabrielie1]

What does it mean reducing the value of the Iraqi dinar to you?

 

It means a LOSS of value. Losing money on this investment of the Iraqi Dinar.

 

It means a LOSS of value. Losing money on the investment of the Vietnamese Dong.

 

Same as Gold/Silver Investment. If the price decreases, you have lost money.

 

If you can read something positive into this your more than welcome to try. But if you invested in any of the above you "Have lost money."

 

So you can wait until the value increases again or you can sell and take your loss.

 

Your choice.

[chinadawg]

I'm sticking with meeting IMF requirements to get to the 2 % spread, they tried at 1182 did not make the cut.now at 1190 they are there..per IMF requirements to go internationally trade, which would allow them to float and unpeg from the usd..................i see no other reason for it...time will tell.

Edited January 3, 2016 by chinadawg

[Badrabbit]

If I may intercede something that My Dad said to Me 3 or 4 Decades ago (his wisdom has mellowed Me out a bit;), you have NOT lost anything unless you sell, you still have the same amount of the things you purchased and there is no monies trading hands until you sell.

 

Value? if you are thinking well I have lost Value  - maybe as of this moment - but I for one do not plan on loosing Value so I will wait as long as it takes (I do so hope it is not much longer!). (this also goes for the Stock Market)

 

God Bless each and Everyone that wants to be Blessed!

[SocalDinar]

Market rate is at 1224 today

[SnowGlobe7]

the value of your asset had decreased.....what the future value is is unknown at this time

[SocalDinar]

If I may intercede something that My Dad said to Me 3 or 4 Decades ago (his wisdom has mellowed Me out a bit;), you have NOT lost anything unless you sell, you still have the same amount of the things you purchased and there is no monies trading hands until you sell.

 

Value? if you are thinking well I have lost Value  - maybe as of this moment - but I for one do not plan on loosing Value so I will wait as long as it takes (I do so hope it is not much longer!). (this also goes for the Stock Market)

 

God Bless each and Everyone that wants to be Blessed!

Smart man

[ChuckFinley]

I am all in on this investment. What this means to me is that they are reaching the end of the pulling in of the 3 zero notes. How long have they been having auctions to pull in the dinar. I would like to know how many of these notes are not 25k notes, that would tell me a lot. My guess the 25 k were the first to be traded in. If the are now 1k or 10k that tell us something, not a lot of 25k notes out there. This is just all smoke. Your dinar is going to be worthless and you need to trade them in now, while you can at least get something for them. Then the CBI drops the value down and they start saying, see the value is dropping you need to sell now. I am not buying it. It is just a plan to get as much dinar in as possible into the CBI. That way the CBI will only be on the hook for as little dinar as possible with the RV. Hang in there my friends, you are smarter than buying the smoke screen.

[millionaire in training]

I agree with Chuck.       Iraq is not playing this by ear.  There is a plan involved.  The fact that we don't know the details of what's actually going on doesn't mean that it's a bad thing.  It just means we're fed up with this process .   Sit tight folks crazy stuff is about to start happening right before our eyes.

I'm sticking with meeting IMF requirements to get to the 2 % spread, they tried at 1182 did not make the cut.now at 1190 they are there..per IMF requirements to go internationally trade, which would allow them to float and unpeg from the usd..................i see no other reason for it...time will tell.

Good Point CD

"Whatever you do don't sell your dinars"

 

             hold on tight

Edited January 3, 2016 by millionaire in training

[uncirculd]

What does it mean reducing the value of the Iraqi dinar to you?

 

It means a LOSS of value. Losing money on this investment of the Iraqi Dinar.

 

It means a LOSS of value. Losing money on the investment of the Vietnamese Dong.

 

Same as Gold/Silver Investment. If the price decreases, you have lost money.

 

If you can read something positive into this your more than welcome to try. But if you invested in any of the above you "Have lost money."

 

So you can wait until the value increases again or you can sell and take your loss.

 

Your choice.

 

I believe once they have pulled in the notes that it will be just a re-denom for them (more purchase power) and rv for us.  Right now they have finally begun the countdown.  That's just my opinion.   This birthing of a democracy with strong resistance is finally taking some sort of shape, and we are all alive to witness it.  Don't sell your dinars yet.  As for dong, well uh, wallpaper.

[Boozer]

This is a GOOD move, they have to draw in as much IDQ as they can before they rase the value.... If your up set and want out then go for it, BUT you better hold on.. Good things will come to those that wait...If your a Bank and you can get IQD for 2 cent. or pay out 50 cent.  whitch would you do ?  it ant rocket science ....you buy low and sell high....

[ChuckFinley]

I agree with Chuck.       Iraq is not playing this by ear.  There is a plan involved.  The fact that we don't know the details of what's actually going on doesn't mean that it's a bad thing.  It just means we're fed up with this process .   Sit tight folks crazy stuff is about to start happening right before our eyes.

Good Point CD

"Whatever you do don't sell your dinars"

 

             hold on tight

I agree with you here, this is not made up as they go along. Not knowing the process is a killer, but if we did everyone would be buying dinar. The hardest part about this deal is the waiting.

[sandfly]

THANKS

[new york kevin]

I thought we weren't suppose to speak about Goldie Girl anymore,with her being banded an all.

[aaanth]

What does it mean reducing the value of the Iraqi dinar to you?

 

It means a LOSS of value. Losing money on this investment of the Iraqi Dinar.

 

It means a LOSS of value. Losing money on the investment of the Vietnamese Dong.

 

Same as Gold/Silver Investment. If the price decreases, you have lost money.

 

If you can read something positive into this your more than welcome to try. But if you invested in any of the above you "Have lost money."

 

So you can wait until the value increases again or you can sell and take your loss.

 

Your choice.

 

 

 

well, so far, NOTHING HAS HAPPENED...  so no losses have occurred, only a bunch of opinions:

 

 

Currency Code Sell Buy

US dollar USD 1182.000 1180.000

Euro EUR 1291.453 1290.807

British pound GBP 1750.542 1749.667

Canadian dollar CAD 851.340 850.914

Swiss franc CHF 1193.337 1192.740

Swedish krona SEK 141.516 141.445

Norwegian krone NOK 134.303 134.236

Danish krone DKK 173.060 172.973

Japanese yen JPY 9.809 9.804 Special

Drawing Rights SDR 1639.269 1638.449

 

Indicative rates - 03.01.2016

Edited January 4, 2016 by aaanth

[jcfrag]

I thought we weren't suppose to speak about Goldie Girl anymore,with her being banded an all.

LMAO   How in the world did she get herself banned anyway? She was always pretty helpful as I recall.... 

Edited January 4, 2016 by jcfrag

[new york kevin]

LMAO   How in the world did she get herself banned anyway? She was always pretty helpful as I recall.... 

She went against the DV rules in some way was all I was told. No details per se were given.