A simulation of the dinar exchange rate linked to the basket of currencies

[DWS112]

A simulation of the dinar exchange rate linked to the basket of currencies of Dr. Ahmed Abrehi Ali

 

Introduction:
The stabilization of the national currency by a basket of currencies, which is among the world's exchange-rate regimes, as well as strict or flexible bilateral linkage. Therefore It is proposed that the dinar be pegged to a basket of major currencies, international reserve currencies, dominant in foreign trade and capital markets, United States Dollars. But Iraq has been used to favoring bilateral ties in its monetary history and to this day. It is no secret to the followers of the argument of bilateral linkage and dollars in particular That the source of foreign currency to Iraq is the dollar first, and secondly the dollar is often in official international reserves and about 65 percent in Third, Iraq's foreign trade depends on the dollar's currency, even with neighboring and Asian countries, and the fourth most countries depend on the dollar to intervene in the market Exchange is called the intervention currency, and in Iraq also operates the window of the central bank in dollars and so we call the currency of the window.

 

However, it is necessary to interact with the currency basket proposal and to discover patterns of exchange rate movement under this system. For those interested and decision-makers to consider the performance of this system and how it differs from the bilateral link.

 

The exchange rate of the dinar linked to a basket of currencies of varying weights:

In this note, a review of the exchange rate of the Euro, Pound Sterling, Yen and Swiss currency against the Dollar since the beginning of 1999. Then we assumed The Iraqi dinar was pegged to a basket of currencies according to three alternatives to weights between the first of January 1999, the beginning of the euro, and the beginning of the 10th of 2017.

 

The weights are:

First: 65% of the dollar; 20% of the euro; and the rest of the currencies 5% each.
Second: 60% for the dollar; 20% for the euro; 10% for the sterling; and 5% for the Swiss and Japanese.
Third: 50% to the dollar; 25% to the euro; 10% to the pound; 5.7% to the Swiss and Japanese.

The exchange rate of the dinar was then calculated according to the linkage of these currencies. For simulations we assumed starting from the beginning of 2012, and points could be selected Start again and recalculate but this does not affect the pattern of movement up and down. It is important to state the results of the currency basket commitment and its weights in the exchange rate calculation, And within a period of time sufficient for the occurrence of cyclical changes and fluctuations in the relationship between the major currencies in the world. At the starting point on the first day of the first month For the year the dollar was 1200 dinars, ie at the moment of transition from the binary system to the basket. The exchange rates of other currencies change in dinars according to their exchange rates In dollars. The result is shown in the table at the end of this note, which shows how much the exchange rate will be in accordance with the currency basket and its stated weights. Below is pure experience with the assumption that the exchange rate of another primary is 1700 dinars per dollar

 

The proposal to adopt a currency basket instead of a bilateral link means that the exchange rate of the dollar will change in dinars according to the exchange rate of the basket currencies against the dollar. How many will be Change ranges, this is what you find in the table. When pricing the euro or the pound in dinars it depends on the exchange rates between those currencies and dollars, for example:

Dollars per euro are multiplied by dinars per dollar and so on. So that the dealer who turned the dinar into euros and then to the dollar recovers the amount of the dinar He used it to buy the euro when converting dollars into dinars at the same market moment. Note that the euro exchange rate with the dollar is cyclical, and generally the trend of the exchange rate of all currencies for reasons related to Productivity and therefore export prices and balance of payments accordingly. Therefore, adoption of the basket does not guarantee a specific direction for the exchange rate of the dollar, or any Other currency, in dinars. And when the basket is adopted, it does not require changing the exchange rate daily, but enough per week or monthly.  These accounts and data presentations for clarification, and knowledge of the quantitative scope of the issue under discussion. When you switch to a basket, you need to agree on currencies Weights and why. The weights assumed in this note are close to the first alternative to the components of Iraq's international reserves. Relative components can be considered For foreign trade or others to propose weights.

Table (1)
Summary of exchange rate simulation results (JDs) when linked to a currency basket
From the assumed time horizon until October 2017

 

Table (1) Summary of exchange rate simulation results (JDs) when linking a basket of currencies from the assumed start date until October 2017

 

Figure 1: Exchange rate movement between January 2005 and October 2017: Simulating the peg to the basket of currencies

 

PDF Read more

Note: this research id posted on the CBI website, item#2, by  Dr.. Ahmed Ibrahimi Ali

 

[KDuesing]

Here let me help you fix your simulation!

 

[jake21]

So right! We are not going to see this thing this year 

 

 

[jmartin1145]

32 minutes ago, jake21 said:

So right! We are not going to see this thing this year 

 

 

Why do you say that? Inquiring minds want to know.

[Sellous]

Maybe Adam can address what this article means as to the future of Dinar value instead of only  commenting on investing in his Gig. Since the bulk of the  articles have been nothing but discouraging lately; A little uplifting with some educated   insight /news would be a nice change

[Half Crazy Runner]

I don’t think I understand this  

Is this an opinion piece or something official from the CBI ..? 

[boosterbglee]

I think we need a sad emogi added to our choices! 

[jeepguy]

1 hour ago, DWS112 said:

n of the dinar exchange rate linked to the basket of currencies of Dr. Ahmed Abrehi Ali

 

it is  the study of  the dinar in the past  , how the  politicians , and bankers want nothing but great  stuff for the poor folks of Iraq  , but  they for get  the charts are written upside down against the baskets

 

57 minutes ago, KDuesing said:

Here let me help you fix your simulation!

 

this  line  needs to be  going  into  the  +  10 cents  too +  1 to 1  division of  dinar values   , it shows  it going  deeper  the wrong way 

 

[siberian_shaddow]

Hmmm a flat line, get the paddles out and shock the shite out of it and see if it moves

Edited January 4, 2018 by siberian_shaddow

[jeepguy]

insert   cheer -----  KEEP  THE POOR  FOLKS IN IRAQ POOR     keep  the  dollar strong   keep the  auctions going  and the need for the dollar high  < -------  if only  they looked at how this is working and just do it to the dinar !

[jeepguy]

1 minute ago, siberian_shaddow said:

Hmmm a flat line, get the paddles out and shock the shite out of it and see if it moves

hahahhahaa  that is funny  buddy 

[siberian_shaddow]

Hey Jeepguy how the hell you been longtime, I hope you and family had a great Christmas and New Years 

[jeepguy]

Just now, siberian_shaddow said:

Hey Jeepguy how the hell you been longtime, I hope you and family had a great Christmas and New Years 

doing well my friend ,  was a good Christmas and new year  ,  was a bit busy   with odd things  , but  waiting on the warm days  , get the cycles rolling again   2 wheels and 3

[siberian_shaddow]

1 minute ago, jeepguy said:

doing well my friend ,  was a good Christmas and new year  ,  was a bit busy   with odd things  , but  waiting on the warm days  , get the cycles rolling again   2 wheels and 3

Yes sir it's been a cold one last few weeks, well that will give you time to tune them up. I am with you on that can't wait for warmer  weather 

[endeavor1]

They are talking about pegging their dinar to the usd first, rather than other currencies, then they'll peg the exchange rate to the usd...a change is coming...but at the 1st of the month....which month?

[copper13]

Just a thought? I’ve heard of a possible global reset of currencies that may happen this week? Maybe this is all part of that??? I really have no clue.....🤨

[jeepguy]

4 minutes ago, copper13 said:

Just a thought? I’ve heard of a possible global reset of currencies that may happen this week? Maybe this is all part of that??? I really have no clue.....🤨

not sure of a global  reset , but  last week  was reported india  up their value of the rupie  ,  I can bet others will rise in value  , but  I do hope Iraq will also do the same , if not  I will keep giving  the  support  the  dollar  cheers  !

[fnbplanet]

56 minutes ago, Half Crazy Runner said:

I don’t think I understand this  

Is this an opinion piece or something official from the CBI ..? 

 

One thing for sure, it's not a translation.  I can almost understand it.

[DWS112]

1 hour ago, endeavor1 said:

They are talking about pegging their dinar to the usd first, rather than other currencies, then they'll peg the exchange rate to the usd

I agree endeavor1

IMO, this chart looks like -  pegging their dinar to the usd is a good idea with  value of 1.2 dinars per dollar (per this simulation)

 

[scouter73]

Jake21 idk if your a newbie but they keep on putting out smoke. It happens multiple times a yr for many years. If your not in it for the future. Sell now and get out of the game. When it happens it will happen.

[Donziman]

Wow this is getting really really tiring.For ten years i've been hearing about back

bank screens flashing(BGG) and planes coming in for a landing,trains coming into

the station(OKIE) even the MTN GT calling it a few times,only to see many friends

and believers pass away (swfg)  I'm afraid i will be with them way before any of these

thieves called GOI. ever get to a point where they will put the good of the people ahead

of their own greed. 

[Floridian]

1 hour ago, DWS112 said:

I agree endeavor1

IMO, this chart looks like -  pegging their dinar to the usd is a good idea with  value of 1.2 dinars per dollar (per this simulation)

 

 

 I don’t understand the simulation. Where do you see 1.2 dinar to the dollar? 

 

Isn't 1.2 dinars to the dollar what it shows on the alternate CBI site?

(.83 cents)

Edited January 5, 2018 by Floridian

[Laid Back]

No float.... Pegged to a basket of currencies 

 

Sorry KAP😩

 

Go new monetary policy 

Go fixed rate

Go former glory

[newbieDA]

[Half Crazy Runner]

1 hour ago, Floridian said:

Isn't 1.2 dinars to the dollar what it shows on the alternate CBI site?

(.83 cents)

 

Yes, that’s what was there a few months back. I haven’t heard any more about that for several months now, I don’t even know how to find that alternate page.  But if they do end up at .83, it would be fine by me!