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Thanks DT...What is the floating of the National Currency and its impact on the lives of the citizens?????? Not 'Jack Shiite' as far as prosperity is concern...There hasn't been anything stated on the conditions of Article 8 and the CBI agreeing to the conditions...This's the 'only' thing, from what I've gathered, that could possibly be holding back the prosperity that the RV/RI of the dinar would bring to the citizens of Iraq...The citizens of Iraq are desperate for a national currency that has the ability and purchasing power to restore the 'Hope' in a sovereign nation that provides a healthy economy and the ability to build a future...The Iraqi citizens are the ones that are suffering the most from their 'national currency'....the dinar, not being determined and 'reinstated at its 'true market' ''value''...The dinar is universally known to be undervalue since it's sanctions 27 years ago...There's no need to jump straight back up to 3.36 dinars to 1 US buck...but starting out close to 1 to 1 could boost more economies than Iraq's...

4 hours ago, KDuesing said:

The only reason the dinar didnt move today Jan 1st. is because Maliki's man Alec is still the head of the CBI, isis is gone now and there is no excuses left.

....this could very well could be the head of the snake that needs to be cut off...

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  • yota691 changed the title to Float currency

Float currency

   
 

 
 

Author: Mohamed Sherif Abu Maysam

09/1/2018 12:00 am

The talk about the flotation of the Iraqi dinar may be too early for a set of economic, financial and political standards that prevent  
flotation. 
As the method of floating in the management of monetary policy, necessarily need to market elements are formed in accordance with regular relations and based on real sectors contribute a large part of the gross domestic product in a legal atmosphere that establishes an economy led by a private sector free of the dependency of the state with adequate performance and flexibility of the 
 productive apparatus 
This is not true of the current economic landscape, as well as the ability of the Iraqi economy as a "rent-dependent economy" that relies on 85 percent of the budget revenues on oil. It maintains a safe cash reserve in the central bank's coffers through monetary exchanges between the central treasury and the central bank.
Which makes this reserve in spite of the daily auction sales of the dollar within the limits able to control the price of the dinar on the basis of the reserve equation with the amount of  
cash out. 
Floating is a tool for managing monetary policy in a market economy. The exchange rate is left to the market mechanism determined by the forces of supply and demand in the money market. Central banks' policies differ from the floating of their currencies according to the economic data determined by the levels of GDP, balance of payments and trade balance. 
Usually depends on the so-called "floating float" policy in countries whose economies suffer from crises, whose exports are less than their imports, leaving the exchange rate to be determined according to supply and demand with the intervention of the central bank whenever the need to modify this price against the rest of the currencies, The most important of which is the gap between supply and demand and developments in price markets
 Parallel drainage. 
The developed capitalist states rely economically on the so-called "free float" method as producing countries with higher rates of exports than their import rates. Their budget revenues consist of total tax collection, service fees and customs. The exchange rate is left to change freely according to market forces, supply and demand, In this case, the intervention of central banks is limited to influencing the pace of exchange rate change, not limiting it 
 . 
However, the Iraqi situation is completely different here from the two models above, because the Iraqi economy is exceptionally prosperous and still suffers from structural imbalances. The real sectors and the sectors that support them do not contribute more than 8% of the GDP. 
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  • 2 weeks later...

The continued decline of the dollar and its impact on our daily lives

22-01-2018 10:06 AM    
Readers
image.php?token=f4e187ac66915f878baadd9c79cd9696&size=
 

Baghdad News -

 

 

Economists and financial analysts expect the US dollar to continue to fall despite all the indicators that are supposed to support its price up for various reasons, while other major currencies continue to rise against the dollar, affecting the daily lives of billions of people around the world.

 
While the dollar ended in 2017 with a 10 percent decline in its first annual decline in five years, almost half of that annual rate was lost in the first month of 2018, and the dollar's strength index fell to about 90 points. 

While market estimates that the US Federal Reserve will continue to tighten its monetary policy - interest rate hikes, announced improvement in the US economy and other positive signs - the outlook is that the dollar will continue to fall for a while.

 

Internal and external factors


An important US internal factor is that President Trump's tax reform plan has not led to higher inflation in the way that the Fed is pushing for a rapid and sustained increase in interest rates. 

US equities, which have seen a near-frenzy rally, are under pressure to correct, making them less attractive to investors. 

US Treasury bonds, which saw an increase in yields at the beginning of the new year, did not boost investors' appetite, but on the contrary, they were heavily sold. 

One of the most important external factors of the fall of the dollar is that central banks in the major economies have started plans to tighten their monetary policy and reduce or stop buying bonds (in the so-called monetary easing). 

Thus the ECB has cut its bond purchases by half (from 60 to 30 billion euros) and other central banks are expected to do so.

This leads to the transfer of capital from the United States to Europe and Asia in pursuit of better returns on investments.

 

Benefits and disadvantages


The continuing depreciation of the dollar may be beneficial to the US economy, contrary to what some may conclude, not only to improve US exports by making them more competitive. 

US foreign debt owed to the rest of the world is denominated in dollars, and therefore with its low exchange rate, America is less likely to serve that debt. 

In contrast, people outside the United States are affected by the fall in the dollar to varying degrees depending on how their national currencies are pegged to the dollar. 

Countries whose currency exchange rates freely move freely in the market can afford their citizens to buy everything that is denominated in dollars at a better price. 

Countries whose currencies are pegged to the dollar suffer from high costs of dealing with other economies, for example in euros or sterling.

Countries exporting raw materials benefit from the inverse proportion between the dollar and the resident currencies. For example, if the dollar exchange rate falls, the price of oil, the price of gold and so on will rise. 

As for expatriates who transfer their money from countries whose currencies are pegged to the dollar, the value of those transfers against other currencies decreases with the fall of the dollar and vice versa.

 

http://www.baghdadnews.info/index.php?page=article&id=30932

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In the first 2 articles above, they give good reasons why the Iraqi Dinar cannot float.

In the 3rd article, they say the dollar has fallen and therefore any currency pegged to the dollar also will fall.

 

So what are they saying?

Are they preparing the people that the Dinar will be pegged to a "basket of currencies"?

If they don't float, and they don't peg to the dollar, what else is left?

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59 minutes ago, Floridian said:

 

I think they have a basket of currencies which include the MidEast countries.

 

Is there a basket of currencies that include the dollar?  I don't know.  Does anyone know?

 

No, there isn't a basket of currencies that includes the USD.  There is the U.S. Dollar Index or USDX.  The USDX is an index or measure of the value of the USD vs. a "basket" of foreign currencies. 


The mere fact that they are discussing a non-float is great news.  Something has to give pretty "soon."

Edited by drj
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